What are KPIs and Why Do They Matter?
You did it. You opened your own wellness business, and you have been successful thus far. But how do you measure that success? How do you know how successful you’ve been?
Great questions! Tracking metrics for your wellness business can help you measure success and see what the future of your business could look like.
What are KPIs in the Healthcare Business?
Key performance indicators, or KPIs, are data trends that can be tracked to evaluate the health of your business on a regular basis. For example, a standard healthcare business KPI would measure the quality of healthcare provided by your business and the overall success of your business.
5 Important Healthcare Business KPIs:
Tracking business revenue is any business owner’s top priority. Tracking revenue consistently allows healthcare business owners to ensure their income is maintained. Revenue as a KPI metric is used for seeing trends. If your business is struggling with retaining consistent revenue in the middle of each month, it may be time for a new marketing strategy.
As a healthcare business coach, I can ensure your goals align with the data from your KPIs. This allows you to focus on other aspects of the business while I work on the big picture and strategy.
If you ask any healthcare business owner if they keep track of their spending, chances are they will say yes. But are they really tracking every expense down to the penny? Probably not. Using KPIs for data on your expenses can be an eye-opening experience for many. While you may think you’ve been tracking your expenses consistently, KPIs will show the trends behind your spending.
If you need someone to gather this information or have received it and aren’t sure what to do next, reach out to me today. Expenses can get messy, and a good budget isn’t all that goes into expenses and planning. I will help you work smarter, not harder, and ensure you maximize every dollar.
If you aren’t sure what overhead is or you don’t know if you are tracking it, I suggest starting to do so right away. Overhead costs are typically associated with the costs of your business that do not relate to profits. This can include paying your employees, leasing office space, travel expenses, and more.
Tracking overhead as a KPI will provide crucial data on how much cash flow you have going out. If you are spending money as fast as you are making it, you could run into a sticky situation sooner than you think. I can help you look at your overhead costs and cut or reduce spending to ensure your exit strategy can be executed.
Gross Profit Margin
Gross profit margin is the percentage of each dollar earned after subtracting the direct expenses of your wellness business. While numbers aren’t everyone’s cup of tea, knowing how your income stacks up to your output is crucial for ongoing success.
As inflation continues to rise, following this KPI for your business can keep you ahead of the game and allow you to increase and adjust pricing as needed. Your gross profit margin is essentially your wellness business’ financial health score.
Net Profit Margin
We’ve all gotten our paycheck only to see the line items that were deducted before it made its way to us. That final number is your net profit margin. Net profit margin accounts for overhead and the cost of services and goods. So, stay on top of KPI trends and educate yourself the best you can. If you hire me, I will assist you in the big picture and the day-to-day operations that will pay off long term.
Not too terrible, right? Use KPIs and the trending data they offer to build out your company in the way that best fits you. While these are my favorite and most important KPI indicators, any wellness business owner should decide what matters to them most.
-Dr. Jennifer Bonde