KPI stands for Key Performance Indicator, or a metric you can track to measure the health of your business. There are dozens of KPIs you can track, but here are 5 we suggest you start with…
You wear 2 distinct hats as a nutrition provider and business owner. As a nutrition professional, you work in your business to help clients achieve their health goals. On the flip side, you run your business, or work on your business, including everything from marketing to sales and managing finances.
Both of these roles are essential to continue growing your private practice.
We speak to a lot of providers, and one recurring theme we hear is that many nutrition professionals don’t have formal training about how to work on their businesses. This can lead to a lot of frustration of not knowing how to get started and what to monitor while setting up your business.
That’s where we come in!
We want to help you achieve your business goals by helping you establish your business (check out our private practice checklist) and measure your success in a numbers-driven manner.
When working with your clients, you can measure the metrics that matter to improve their health. We also suggest consistently measuring the metrics of your business to ensure your business stays healthy too!
The metrics you measure are known as Key Performance Indicators, or KPIs for short.
If you’ve never heard this term, you’re not alone.
KPIs are specific metrics used to measure how well your business is doing.
Even if you don’t formally have a spreadsheet titled “KPIs,” you may already track some KPIs without realizing it. Do you track your practice revenue? Month over month growth? Then you’re tracking 2 KPIs already!
There are many reasons to take a numbers-driven approach in your business. Analyzing your practice from an data-focused perspective helps you:
- Stay on top of your business growth
- Measure your success
- Direct SMART business goals
- Use your time effectively
- Allocate your budget appropriately
- Understand where to seek continuing education, training, or help
- Promote business predictability
- And more!
Now, you may be thinking that this sounds like a great idea, but how do you get started? Below are 5 KPIs we suggest you track starting today (it’s never too late to start), why you should measure these specific KPIs, and how to track them.
Here are 5 KPIs to Track In Your Nutrition Business:
1. New Leads Per Month
How many new people are inquiring about your services each month?
Leads include those who inquire about your services. They can be people who:
- Reach out to learn more about what you can offer
- Sign up for your email list
- Download a freebie from your website
- Add their name to your list at a community event
- And more
There are dozens of ways to gain new leads for your business.
Growing the number of new leads you acquire feeds the top of your “funnel.” A marketing and sales funnel is a common term used to describe the process that a prospective consumer moves through from first learning about you to inquiring about your services, through becoming a paying client.
As your number of new leads per month increases, you will also likely expand your clientele.
Once you start tracking the number of new leads you have per month, you can build upon this even more. You can track where these new leads come from. Recording the source of your leads is a great way to notice where you should expand your marketing efforts.
For example, if most of your leads come from Instagram, you should spend more time explaining your services on that platform. If most come from email marketing, maybe it’s time to create a better lead magnet to attract more email sign ups. Make sense?
Tracking your number of new monthly leads is a key component in discerning your conversion rate (see below).
2. Conversion Rate
How many leads turn into paying clients?
This is the percentage of prospects who inquire about your services that turn into paying clients. The industry average is about 20-33%, or 1 in 5 to 1 in 3 leads that turn into paying clients. Your conversion rate is one of the most important metrics to track in your business.
Why? This may help you determine where to allocate your marketing budget or even continuing education credits.
Think about this: If you offer a free initial consultation, how many prospective clients who get on the phone with you turn into paying clients? If your conversion rate from these conversations is low, you may need to devote more time and effort into learning how to connect on these phone calls and “sell” your services. Don’t think that you need to become a salesperson. Instead, maybe you need to learn how to better articulate your client’s pain point. Why do they need to work with you to live a better life?
According to marketing expert Sheri Otto, creating a marketing system (your funnel) is a great way to improve your conversion rate. Your marketing system can include a freebie you provide to build your email list and compelling email content that provides value to prospective clients. She recently told us that a good marketing system does a lot of the pre-selling for you, shortening your initial conversation and increasing your conversion rate.
3. Cost Per New Lead
How much does it cost you to gain a new lead?
Regardless of your marketing budget, it’s important to know how much it costs for every new lead you gain so you can ensure you’re working towards a good return on your investment.
If you’re just starting out in private practice, your marketing budget may be small, so you may want to consider your time investment as your “cost.” This is important as well because, as they say, “time is money!” Doing a time audit may clarify how you spend your time.
Whether you’re accounting for your financial or time investment, how much money and time do you spend to gain every new lead?
Some costs to consider include:
- Social media ads
- Printing flyers and distributing them
- Hosting an event
- Email marketing platform (such as paid plans on MailChimp or ConvertKit)
After you determine your cost per new lead, compare this value to your service prices. This is how you can see if your return on investment (ROI) is worth it. If you didn’t specifically allocate your marketing budget before starting your practice, you may discover that raising your prices is necessary to create a profitable business model. This is another factor to consider when determining how much to charge for your services.
4. Monthly Revenue vs. Monthly Expenses
How much money is coming in versus going out?
In addition to your cost per lead, it’s important to track other business expenses, and compare these expenditures to your revenue. After accounting for taxes, this difference is your profit. Keeping track of this number will alert you to when your practice is profitable (it takes some time, so don’t worry if you’re not turning a profit the first few of months).
This is important so that you monitor the financial health of your business. Transparency in the numbers will help you predict your future income, appropriately pay tax estimates, and set realistic financial goals for your business.
You can easily track your monthly revenue by processing your payments through Healthie. We make it easy to export this report as well so you can examine your monthly, quarterly, and annual revenue in a simple spreadsheet.
As per monthly expenses, here are some business expenses to track:
- Practice management platform, like Healthie
- Office space rent or mortgage
- Promotional items, like business cards or flyers
- Social media scheduling tools, like Tailwind for Pinterest or Buffer
- Liability insurance
- Professional association fees, like the Academy of Nutrition and Dietetics
5. Average Length of Treatment
For how long do you work with each of your clients?
There are a number of reasons why your average length of treatment is a valuable KPI to track. You can:
- Better design your client packages to fit the amount of time you need to properly treat your clients.
- More accurately predict the number of new clients you need per month to reach your income goals.
- Design an automated educational course in your specialty to help grow your passive income.
- Closely estimate when your practice is nearing capacity, or when it’s time to expand your business with another nutrition provider.
We covered a lot of information here, but these 5 KPIs to track in your nutrition business are just the tip of the iceberg! Continuously monitoring and re-evaluating your business metrics will ensure you run a healthy practice. When reviewing your KPIs, remember: every business starts somewhere!
If you’re looking to grow your business with confidence, be sure to download our Getting Started In Private Practice guide and click below to learn more about Healthie.