But let’s stick to the tried-and-true money dollars here.
Now, the revenue you bring in every day/week/month is obviously important. I mean, without that you’ve got exactly diddly squat.
But there’s more to the financial picture to be sure. It’s vital that you know your industry benchmarks and track your Key Performance Indicators (KPIs). But which ones? And how often? You can most definitely drive yourself crazy if you choose the wrong ones. And if you track them too often you’re gonna drive yourself batshit crazy.
Here are the KPIs I follow on the regular:
Veterinary benchmark: $530,000 annually per DVM
Track: daily, weekly, monthly, annually
Duh. I check this number a lot. Like, all the time. It’s worth checking this one more often than my other KPIs. When I do, I can tell whether there are days that we are typically busier that will need more staff coverage. Or maybe there are procedures or appointment types that are more lucrative than others.
Checking weekly lets me know if we can pay the upcoming bills. And checking monthly helps me determine any seasonal trends in total business. Since I’m the only DVM in the practice (for now), I also track annually to provide the clinic’s overall revenue.
Veterinary benchmark: 23% of revenue
Track: weekly, or at least bi-weekly
Check this once every 2 weeks, at least. Monitoring this even more often is a GREAT way to catch overtime, which can kill you as a business. It’s also a good way to figure out if you’re overpaying any of your team members (this happened to me recently and I’m still recovering financially). Demographics play a huge part here; I’m certainly paying more in Southern California than practices in most other parts of the country.
3. Cost of Goods Sold (COGS)
Veterinary benchmark: 18-23% of revenue
This one measures how much your stuff costs you. It’s typically your second-largest expense after payroll, and we check it monthly. All of the things you use to provide goods and services to clients go in this category. For us, that’s prescription medication, laboratory costs, food, treats, surgical supplies, injectable drugs, and all that jazz. This one often tells the tale of whether you’re profitable–if you’re taking in $50,000 every month but spending $25,000 on providing services, you got yourself a problem bucko.
4. New Clients
Veterinary benchmark: 24 per month per DVM
You gotta keep ‘em coming in! Fun fact: your business will die if you can’t keep new clients in the pipeline. I don’t care how solid your client base is, you will lose people. They move, pets pass away, stuff happens. So don’t get too comfortable and take your foot off the gas!
5. Active Clients
Veterinary benchmark: 1,800 per DVM
This number basically shows you how large your practice is. It’s a kissin’ cousin to the new client benchmark, and a great way to check the overall strength of your client base. If you want to get really down to it, track how many have actually come in for exams over the past 12 months. An “active client” can technically be one who has been in during the last 3 years. But honestly, if a client hasn’t visited you in more than a year that’s not a great client, is it??
So there you have it, the five Key Performance Indicators I track regularly. Got any others you like to monitor? Drop me a line and let me know!