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Measuring Profitability

Like most healthcare providers, you probably went into medicine to help people.

But now that you’re starting your own practice, you can’t keep helping people if you can’t keep the lights on.

Because they don’t rely on insurance-reimbursements, non-invasive aesthetic procedures are a great way to create a profitable practice that continues to help people.

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But without a focus on measuring your impact, saving costs and increasing your revenue per patient, you could still end up right where you started – tired, frustrated and working more hours just to make ends meet.

How and What You Should Be Measuring

In order to run a successful and profitable aesthetic medicine practice, you need to be able to track different parts of your practice to ensure you’re on track to meet your targets.

Just like you can’t buy a new car and not perform routine maintenance on it like replacing the oil and windshield washer fluid, you can’t let your practice run without checking in on its systems regularly to make sure everything is working like it should. 

Here is how you can set yourself up to track for success!

Tracking Your Team

You should have regular meetings with your staff to set clear, measurable goals and to ensure everyone is acting with your core values a the center of what they do each day. 

Establish a consistent meeting every week with your team. It’s vitally important that you stick to your agreed upon meeting time every week. Even if they are just short meetings to keep on track. If you start to drop off on your regular meetings, your team is much more likely to lose focus and to go off track bit by bit.

After a few weeks of this, you are so far away from your goals that it’s going to take more work to get back on track than if you had just kept the meetings going and helped your team maintain their direction. 

The good news is that as your practice grows, your team meetings don’t need to!

Once you have your plan in place and a meeting template, everyone will know what to expect and how to come prepared with their updates.

Make sure you are reviewing the practice’s core values, yearly and quarterly goals and where you’re at on that day at each and every meeting.

Reviewing these consistently and regularly will help motivate your team and keep everyone moving in the same direction.

Tracking Your Marketing

Wouldn’t it be great if your practice could thrive and grow just by serving the same patients every year?

Unfortunately, it can’t. In fact, no business can. You need to have new patients coming through your doors on a regular basis.

This is why it’s important to track the effectiveness of your marketing efforts.

Marketing can easily turn into a black hole of spending since many tactics can be very hard to quantify a ROI (return on investment).

That’s why it’s so important to track as much as you can to ensure your efforts are bringing in more money than you are spending on marketing. 

Here are some suggestions for numbers you might want to include in your marketing tracking:

  • Monthly marketing spend – a total glance at how much you’re spending as well as broken down per campaign and medium (online, magazine ads, etc)
  • Cost to acquire a patient – take your total monthly marketing spend and divide it by the number of new patients you acquired through your marketing efforts (you should be asking each patient how they heard about you and tracking with their records)
  • ROI (Return On Investment) marketing spend – calculating the profit from each new patient that was acquired through your marketing campaign. Note: this is not the revenue. You want to track the difference between what the patient paid and what it costs you to perform the procedure, aka the profit. Only this will help you know if you made money on the marketing campaign or if you spent more than it brought in.

Tracking Your Patients

It can be hard to get patient data, using your EMR (electronic medical records – like Patient Now or Aesthetic Record) is the best place to look. 

From there, keep it simple. Pick your top 3-5 patients who spent the most in the practice each month. Then also keep an ongoing list of the top 25 patients who’ve spent the most money since becoming your patients. 

Knowing who these patients are can help you identify patients who might make good referrers for your practice or give you ideas for mapping the patient journey for new patients based on procedures or requests from these “rising stars”.

It will help you create a repeatable roadmap for communication and selling additional treatments for each new patient. Repeatable and scalable – saving you time and helping you further increase your practice profits.

Tracking Your Financials

This can sound like the most boring part – but don’t let your eyes glaze over at the mention of financials!

You need to linke the money coming in and out to the performance of the practice. This isn’t just important to keep you in the black, staying on top of this and being in the loop as the practice owner can also help you from being an unknowing victim of practice embezzlement!

You don’t need to be a financial expert, but you do need the basics.

Here’s what you should have in place:

  • Income statement – this compares your revenues and expenses and shows you if you are going to make money.
  • Cash flow statement – this shows you how much money you have in the bank.
  • Balance sheet – this is a comparison of what you own and what you owe. It’s more important if you own a lot of equipment or you own the building your practice is in.

From here, you can also set up reports to help you track overall revenue, as well as broken down by treatment, and your operating and marketing expenses.

Once you’ve determined the exact numbers you want to track, you can create a financial dashboard using Excel or in Google Spreadsheets. You can use the dashboard to keep everyone on your team in the loop about how the practice is doing!

Is Business All Greek To You?

We can help you make sense of it.

Learn everything you need to know to start and run a profitable practice with the Business of Medicine On-Demand Course!

You can get access immediately!

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