The Most Important Measures for a Successful Practice
So now you’ve started a practice and you’re beginning to get clients. How do you spend the little amount of time you have on the business side of things effectively? Building a successful private practice, or any business for that matter, requires a focus on certain key metrics.
For best, easily measurable results, especially at the beginning, spend your limited time laser focused on these 3 core areas.Let’s call them the 3 Rs (Reach, Retention, Revenue):
What channels do you use to reach and bring in clients? Online? Seminars? Ads? You need to be able to measure each source and have a single metric to see how each channel is performing. Weed out, or reduce spending on failing channels, and double down on channels that are working.
Some online channels are Psychology Today, Good Therapy, and other similar ad networks. Consider Facebook, and Pinterest and learn about how to effectively use them, then measure if they are actually effective for you. Offline channels can be a particular event such as a local college or school program you’ve chosen to be the primary participant in. Get creative, test and measure.
If your clients are leaving after just a couple of sessions, or you have high no show rates, it will destroy your practice. Track this, and find simple measurable ways to improve it. Maybe you need a better on-boarding process for new clients. Experiment with a welcome letter to new clients and use this as a chance to give them a good first impression of you and your practice before they even step in the door or see you physically. Make things easy for them with an easy way for them to see their appointments, get confirmations, etc. Have a way to measure how your customers perceive you and the practice. That goes beyond just how effective you are, it includes how they perceive your physical space, and even your front office staff.
A periodic survey can help here. Set it up once, and have a set number of sessions after which a client gets it. Or use an online service like Survey Monkey. You can also use the retention rate report available in TheraNest.
It’s an obvious one. Keep your eyes on your invoice aging and work hard to keep it low. You can survive anything if you have steady cash flow. Your invoice aging goes a long way in determining that.
What ways can you improve your cash flow and get that cash in fast? Maybe you should consider accepting credit cards if you currently don’t. Maybe certain referral channels tend to send clients that don’t pay. We specifically let you track this in TheraNest.
Reduce your efforts in this channel, or refer their clients to places where they can get help without worrying about cost. Keep an eye on profitability and keep measuring overhead costs. If you can, charge for no shows and late cancellations. Be kind though, give second chances. The goal is to help clients have improved outcomes by showing up, so this is to weed out repeat offenders.
Find a metric to measure these 3 things and watch them like a hawk. Try to give each one a single number on a scale, and have a target. Everything else will fall into place. Not easy, but manageable.
All the best on a great journey as you build your successful private practice.