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Revenue Per Hour: Why Knowing this Critical Number Matters

Sponsored by Aesthetics Practice Accelerator (APX) If I asked you what your revenue per hour is per room or per provider, would you be able to tell me? If you can’t answer this off the top of your head or even by looking at your financials, don’t worry.

Sponsored by Aesthetics Practice Accelerator (APX)

If I asked you what your revenue per hour is per room or per provider, would you be able to tell me?

If you can’t answer this off the top of your head or even by looking at your financials, don’t worry. You are not alone. Industry benchmarking data shows a surgical practice should generate approximately $3000 per hour; a medical spa between $600-$1000 per hour; and an aesthetician room between $250 to $350 per hour.

If you are not quite there, it usually means a few things:

1. Prices are too low
2. The provider is taking too long in the room per treatment/surgery
3. You may not be offering the right mix of services

Now, more than ever, in this COVID era of seeing and treating a reduced capacity of patients per day, it is imperative to maximize the time you spend on procedures and services that generate the highest revenue potential.

Numbers You Must Know

In order to determine your revenue per hour, you need to look at your service category mix over a period of time – three months, six months or 12 months. Then, you need to know:

• What are you charging per service?
• What is the cost of labor?
• What is the cost of goods that is associated with that service?
• How long does it take the provider to perform that service?

The Aesthetics Practice Accelerator (APX) business intelligence growth platform includes the five core components proven to help you grow your business.

Why Revenue Per Hour Matters

Knowing this number is critical to making informed decisions on the types of services you provide and your price per service. Once you determine your revenue per hour, you can then decide which services you want to eliminate or reduce, and which ones you want to do more of instead. This information gives you the opportunity to course correct and fix things that are out of alignment.

Knowing your revenue per hour gives you a very clear picture of many things, including:

• Insight into your pricing and whether you are aligned with your market
• Ability to determine your marketing spend to lower your customer acquisition cost and raise your ROI
• Data on productivity per hour
• Financial perspective on gross profit by knowing your revenue less the costs of goods and labor. If it is not 50% or greater, you are losing money.

At the end of the day, we all want to provide great results in a safe manner and have a profitable business. So, knowing what percentage of your annual revenue is being generated from each category of service is fundamental. It gives you a snapshot of your full financial picture so you can make changes that will immediately have an impact on your business.

Aesthetics Practice Accelerator (APX), our newly launched business intelligence growth platform, includes a comprehensive financial foundations course designed to help you learn how to extract critical data from your EMR/Practice Management Software and then plug it in to one of the seven financial optimization calculators included so you can make the best, most informed decisions to increase profitability.

About the Author

practice management, marketing, business, revenue, practice, profitsTerri Ross

Terri Ross is a world-renowned practice management consultant and international speaker who has helped hundreds of medical aesthetic practices launch, grow and scale to upwards of $1M in revenue growth a year and beyond. Terri was an executive for Fortune 500 Medical Device Companies managing sales team ranking in the Top 10%. In addition, Terri was a managing partner for a medical spa in Beverly Hills, which she scaled to $3+M. In response to real-world challenges facing aesthetic practices, Terri launched APX by Terri Ross in 2021 – an integrative training and growth platform that provides solutions for the medical aesthetics industry in the areas of sales, finance and operations.

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