The profitability statistics produced by Business Health are based on responses to their HealthCheck program. This is a web-based diagnostic tool designed to allow practice principals to gauge the health of their businesses.
To determine the practice profit, Business Health included a notional salary of $100,000 per annum for principals in their expense calculations. This enabled them to standardise the results across the sector.
Using this as a basis, Business Health were then able to quantify, in monetary terms, the relative value of each practice development initiative outlined in the tables. For example, they were able to calculate the average profit per principal in those practices that effectively segment their client base compared to those who do not.
For those tables where the total percentage did not add up to 100 per cent, alternative answer options were available to respondents. For instance, while some respondents said they had a succession plan in place, it was not defined as an effective plan — that is, it was not at a stage where it could work successfully, and to the benefit of the principal.
The HealthCheck program examines 32 different practice management issues. However, the numerical results of this analysis demonstrated that the eight measures discussed here had the greatest impact on practice profitability.
