5 Key Factors in Unlocking the Power of Your Data
Big data has become somewhat of a buzzword in the business world, and veterinary medicine is no exception. Harnessing information about your clients can help you transform your business in a number of ways, such as improving service levels, developing newer and better program options and optimizing how your clinic is run.
In much the same way as lab work allows you to assess a patient’s overall wellbeing, data enables you to take a good, hard look at your practice to gain valuable insight into its overall health. And just as a patient’s test results may reveal a potential problem, data analysis can do the same for your business, allowing you to more proactively reduce risk.
The good news is, even if your practice is solo in nature, you can still leverage data just like your larger competitors. It’s really just about knowing which numbers to look at and how to apply the results. The AVMA’s Veterinary Economic Advisory Council recently outlined the most critical metrics upon which to focus your time and energy, as follows.
5 Key Performance Indicators (KPIs) to Monitor
- Practice revenue
- Number of transactions or invoices
- Average client transaction amount
- % of revenue that goes toward cost of goods
- % of revenue that goes toward labor (professional and para-professional)
Begin by tracking these metrics on a month to month basis. You don’t need anything too fancy to do so – just a simple Excel spreadsheet should suffice. You may also wish to compare your results to national averages to see how your practice is measuring up and identify areas where improvements could be made.
If you don’t have time to handle this task, it’s an ideal duty for a practice manager. In fact, many practice owners ask their PMs to compile and deliver monthly reports to monitor the financial health of the practice. Each month, sit down and take a look at what’s trending (and in which direction). When you discover positive trends, reward your team accordingly. If trends are moving in the wrong direction, it may be time to make some changes, or invest in some additional training or coaching.
Larger practices shouldn’t be the only ones that are leveraging data to optimize their business performance. Your data is just as valuable. Use it as a compass to help guide and direct you on which paths you should follow and which twists and turns you need to make along the way. Monitoring it, measuring it and managing it will help direct your veterinary practice toward a successful and profitable future.