Key Metrics to Track for Private Practice Success
Taking the time to review the progress and growth of your private practice is a great opportunity to step into your entrepreneurial mindset - especially if you are looking to grow and scale your practice in the year ahead. As a private practitioner, you will need to review some important information to make confident decisions about your business objectives.
Analyzing your revenue, reviewing your client experience and managing your overhead costs are all important aspects of running a business. In this article, I’m sharing 4 key metrics to track in your private practice. If you find yourself searching for the following data, now is a great time to start tracking these statistics and incorporating a review into your annual, quarterly or monthly planning.
Revenue
Revenue is at the top of the list. Revenue is the income from client transactions, and depending on your practice, this may look like payment for sessions or purchases of a course, workshop, e-book, etc. Regardless of what your clients purchase from you, your revenue can provide some important insights into the health of your business.
In reviewing your revenue over the last 12 months, consider if there are any apparent trends. Did you see more clients on average during a particular month or season? Did your revenue decrease after adjusting your rates? Did your increased marketing efforts actually result in higher web traffic and increased revenue? All of these considerations will help you to understand where your efforts paid off, or where you might need to head back to the drawing board.
An important note here is that your focus with this metric does not necessarily have to be increasing revenue. It is important to set goals that suit your life and your practice, and in some instances, your revenue may not have increased over the year but maybe your mental wellness has never felt better!
Client Retention & Loyalty
The next key metric that you should be tracking in your practice is client retention and loyalty. While on the surface it may seem as though you simply need to track whether or not your clients continued working with you, there are some other important factors to consider.
Are the clients you are currently working with the right fit for your therapeutic style? Do their values align with the values of your practice? Most importantly, do they respect your boundaries and policies?
Think about some of your favourite clients to work with - how did they find you? Perhaps through word of mouth or through your Psychology Today profile. Then consider how you can find similar clients and focus your efforts on doing just that.
Alternatively, think about any clients you may have that cause difficulty in your work with them (from a business perspective rather than actual therapeutic practice). Reflect on what attracted you to them in their search for a service provider. This may be a good time to review your website content or social media presence to ensure that you are attracting only your ideal clients.
If you are experiencing a larger than normal amount of turnover, aim to pinpoint why that might be. Are clients feeling discouraged because they are unable to book a timely appointment with you? Perhaps they feel that they aren’t a priority when their emails go unanswered for days. Look at how you can improve your client experience. This may look like using tools and software to handle some of the administrative processes or even hiring an assistant to deal with client services.
Finally, don’t be afraid to follow up with clients after they have completed their time with you and ask for their feedback through a survey. This can be done anonymously if the client prefers and it will give you some great insight on how your clients view your practice.
With client services in mind, it is also important to analyze the level of productivity in your private practice. Wearing the hat of both a practitioner and entrepreneur means that you need to be conscious of how you spend your time. Filling all of the roles in running your small business can be time-consuming and not every task you do is likely to be productive.
If you haven’t done so already, try tracking how you spend your time each day for a week or two. Determine how much time is spent in session with clients, reconciling your bookkeeping, answering emails, creating social media content or writing blogs. The time you are spending both in your business and on your business should be geared towards supporting your goals and objectives.
It’s important to avoid getting caught up in tasks that aren’t moving the needle for you in your business. If your goal for the year was to launch a course, spending time pitching yourself for podcast or conference appearances may not be the best use of time if your course material is still incomplete.
Overhead Costs
Overhead costs are not dependent on how much your practice grows or earns so it is important to track them on a regular basis and work them into your annual budget. With monthly tracking, you can see where spending occurs in your practice and make decisions related to cash flow more accurately.
As a private practitioner, some of the overhead costs you may need to consider are office rentals, professional fees, software subscriptions and more. Any expense required to effectively run your practice is an overhead cost but you can also look for less expensive alternatives such as an office space with a lower monthly rent… or transitioning to online counselling and working out of your home.
As you review your overhead costs, you may find that some of the expenses you incur on a monthly or annual basis help to increase productivity or result in a more successful client experience… not all overhead costs are ‘bad’ but the key is to make smart decisions about your finances in order to reach your unique goals for your private practice.
Do you perform an annual review of your business? If you are looking for guidance on ‘the business’ of private practice, please consider applying to work with one of our BYPP Coaches to get you clear on the next steps.
