E769 | How To Calculate Average Visit Rate Correctly

How to Accurately Calculate Your Average Visit Rate and Why It Matters

As a clinic owner, understanding your business metrics is critical for success. One of the most important—and often misunderstood—metrics is your average visit rate. This number plays a key role in determining revenue, staff compensation, and the overall health of your practice. Let’s break down what it is, why it matters, and how to calculate it accurately.

What Is Your Average Visit Rate?

Your average visit rate is the amount of revenue your clinic generates per session. On the surface, it seems simple: divide the total revenue by the number of visits in a given time period. However, the reality is more complex, especially if your clinic offers packages, discounts, or family and friend rates.

Why Accuracy Matters

An inaccurate average visit rate can lead to poor business decisions:

• Overcompensation or Undercompensation: If your numbers are skewed, you could end up paying staff too much or too little, either hurting your profitability or risking employee dissatisfaction.
• Misguided Growth Plans: Faulty data could lead you to invest in the wrong areas or underestimate the resources needed to scale your clinic.

Accurate data enables informed decisions, allowing your business to remain profitable while offering fair compensation to your team.

Common Pitfalls in Calculating Average Visit Rate

Here are two common mistakes:

1. Counting Package Revenue Incorrectly: If you account for the full revenue of a package in one month but spread the sessions over multiple months, your average visit rate will appear artificially high.
2. Ignoring Discounts and Special Rates: Family, friends, or promotional discounts often aren’t factored in, skewing the numbers.

How to Calculate It Correctly

To get a true picture of your average visit rate:

1. Gather Data for at Least Two Months: One month might have too much variance to be reliable.
2. Calculate Revenue Per Session: Look at what each patient actually paid for every session during that time period. Include all discounts, packages, or special rates.
3. Divide Total Revenue by Total Sessions: Add up the revenue from all sessions and divide it by the number of sessions fulfilled during that time.

This method may take some manual effort, but the insights you gain are worth it.

How This Impacts Your Business

Once you have an accurate average visit rate, you can build compensation models that are both fair to employees and sustainable for your clinic. You’ll also have a clearer understanding of your clinic’s financial health, enabling better decisions around growth, reinvestment, and profitability.

Take Action

If you haven’t reviewed your average visit rate recently, now’s the time. Spend an hour or two analyzing the past two months. This simple exercise can save your clinic from costly mistakes and set you up for long-term success.

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Podcast Transcript

 Danny: Hey, real quick, if you were serious about starting or growing your cash based practice, I want to formally invite you to go to Facebook and join our PT entrepreneurs Facebook group. This is a group of over 6, 000 providers all over the country, and it's a pretty amazing place to start to get involved in the conversation.

Hope to see you there soon. Hey, are you a physical therapist looking to leverage your skill set in a way that helps you create time and financial freedom for yourself and your family? If so, you're in the right spot. My name is Danny Matta and over the last 15 years I've done pretty much everything you can in the profession.

I've been a staff PT I've been an active duty military officer physical therapist. I've started my own cash practice. I've sold that cash practice And today my company physical therapy business helped over a thousand clinicians start growing scale their own cash practices So if this sounds like something you want to do listen up because i'm here to help you

Hey, what's going on? Dr. Danny here the pt entrepreneur podcast And look today we're going to get super tactical. So some of you are like Danny, I need more tactics. I need more details. I'm going to give them to you today. And this has to do with what I think is probably the most important business metric for you to keep an eye on.

And that's your average visit rate. And essentially your average visit rate is the average amount you get per session that you have at your clinic. And the calculation of this, Can be a bit skewed sometimes and I want to make sure you're doing this right because We build compensation models around your average visit rates Like that's how we like to look at these to make sure that we are Not over or under compensating, based on the revenue that the clinic So when you look at your average visit rate it gets muddied sometimes when you have packages.

So what people will do sometimes is they'll say, okay, I made 20, 000 this month. I had a hundred visits. So if I take 20, 000 and divide it by a hundred, my average visit rate is 200. That might be true, but it might not be. So if you're selling packages and you're accounting for the revenue brought in each month divided by the number of visits seen that can actually be inaccurate.

And the other thing could be this, you could say, okay, I didn't sell any packages this month. I generated 10, 000 in revenue, but I had a hundred visits. That means my average visit rate is a hundred dollars a visit, which is probably not accurate either. So the way you have to do this, if you want to get really granular about what your average visit rate is, you actually have to manually go in and calculate it based on what each person was paying per session fulfilled and include any Friends family member discount any first responder discount you may have any comp sessions you might have so you'll have to go in and actually look at each one So let's say you had a hundred visits You have to go and look at each of those hundred and what you might see is okay This person was on a package and it was two hundred dollars a session.

So that's a 200 this person was on a package there was 180 a session. So that's one 80. And then this person was a comp to visit. If it was like a coach that we have a great relationship with. So that's a zero and you have to add all of these in the zero, the, all the differences, and at the end you divide that by the number of sessions that you actually had, right?

So that same hundred, but I prefer people do this for two months. mainly because you want to see where you're at. And, a one month can have a bit of variance to usually is going to be pretty accurate. And that's what your average visit rate is because you have to assume if you're bringing somebody else on that they're going to have comp visits, they're going to have discounted friends and family visits.

They're not always going to have just like the highest revenue per visit session that you might have. They're going to have a variance, right? So for you, you have to look at this more granularly because here's why it's very important. That number in particular, if you're building compensation models on that, what you don't want is to have a really elevated number because.

Maybe you had a bunch of packages you sold and as you're looking at your average visit rate, it's skewed up. But then you build a compensation model based on a skewed average visit rate and then now you're overpaying somebody or maybe on the other side you're underpaying somebody. And we want to be in the right spot.

We want to be able to have a compensation model that allows the business to pay somebody like a fair amount But at the same time leaves the business in a place where it can have profit, that it has stability and it can reinvest in the business to be able to grow, right? That is the key is to be in the right spot to have the right compensation so that it's, that is fair and it's appropriate.

And it allows the business to be in a healthy spot. It allows you to pay your staff really well. And you're not basing that off of skewed data, right? Cause the data that the importance of data is that is accurate. You can make terrible decisions based on the wrong data. right? You can make great decisions based on accurate data.

So sometimes you have to do a little bit of manual work, a little bit of tedious work like this is to really make sure you get the accurate numbers. So if you haven't done this in a while, I highly recommend look at the last two months, go through each individual visit, add it up, divided by the total amount, over those those, that one or two months that you're looking at, and that'll give you your true average visit rate for your clinic.

Hey, Peach entrepreneurs. We have big, exciting news. A new program that we just came out with. It is our PT Biz part time to full time five day challenge. Over the course of five days, we get you crystal clear on exactly how much money you need to replace by getting you ultra clear on how much you're actually spending.

We get you crystal clear on the number of people you're going to see and the average visit rate you're going to need to have in order to replace your income to be able to go full time. We go through three different strategies you can take to go from part time to full time. And you can pick the one that's the best for you based on your current situation.

Then we share with you the sales and marketing systems that we use within our mastermind that you need to have as well. If you want to go full time in your own practice. And then finally, we help you create a one page business plan. That's right. Not these 15 day business plans. You want to take the small business association, a one day business plan.

It's going to help you get very clear on exactly what you need to do. and when you're going to do it to take action. If you're interested in signing up for this challenge, it's totally free. Head to physicaltherapybiz. com forward slash challenge. Get signed up there. Please enjoy. We put a lot of energy into this.

It's totally free. It's something I think is going to help you tremendously as long as you're willing to do the work. If you're doing the work, you're getting the information put down and getting yourself ready to take action in a very organized way. You will have success, which is what we want. So head to physicaltherapybiz.

com forward slash challenge. Forward slash challenge and get signed up today.