Private Duty Leadership Summit: Day 1 – Monday
This year’s PDHCA Summit introduced a new program, the pre-conference intensive, which focused on Operational Tools and Results. Everyone came prepared to learn, and there was great information for start-ups all the way to multi-million dollar agencies. Ginny Kenyon, of Kenyon Consulting, started out the intensive with an impactful statement for all agencies offering private pay services, “One service line in private duty will not cut it.” She encouraged the audience to think outside the box on ways to include creative ways to engage new, potential business. Here are some examples given:
- Mommy and baby programs
- Day of sugary support
- Cruise companions
- Home modification
- Holiday helpers
She pointed out that business is anything your customers are willing to pay for and that you can provide confidently. She also recommended that you heed caution when considering new services. In other words, give careful thought before launching. Make sure you follow state rules.
A big focus in the pre-conference intensive was the Operations Dashboard. Knowing where you are in terms of data will be the only way agencies can remain profitable and successful during growth. Agencies have to know what costs are: productivity of staff, cost of leads, cost of referrals, conversion ratios, average hours per new client, per active client, loss ratio, etc.—bottom line, you have to look at gross profit and net. A good operational dashboard will help you figure that out. According to Ginny, “Salespeople should be making 25 to 30 sales calls per week.” Additionally, she advises that agency owners should make sure salespeople know their “speak” when marketing to referral sources.
Next up was Patricia Drea, focusing on benchmarking. She recommended that small agencies (those with revenue under $500k) track key indicators such as:
- Lead tracking
- Lead conversion
- Monthly profit & loss
For agencies with $1M and above, Patricia noted that a referral analysis should be added. It is also at this point that she recommends following up with customer service surveys to make sure the quality of service is still there and allowing for measurement of change.
Once an agency moves into the $3M and up revenue category, a comparative performance between people on staff should be added. Scorecards and process improvement are necessary for improving performance, and Patricia was quoted as saying, “Make sure to continue to use benchmarking after implementing process improvements so you don’t slide backwards.”
Some of the numbers that agencies should pay attention to when benchmarking are the average number of hours per care recipient. This value lets you know if you are recruiting fast enough. Also, pay attention to profit margin. Patricia stated, “Industry standards say that the average profit is 15 to 20%.”
A big takeaway for the groups was this simple, but powerful statement, “You won’t make up profit margin with volume.
Patricia also recommended that office staff salaries and benefits should be 12 to 16% of total gross revenue.
A great take-away from the entire pre-conference intensive for all agencies is, “Private duty agencies need to become data-driven organizations.”
Scott Spangler wrapped up the morning session with a quote about the positive effects of having a functional operational dashboard, “The dashboard is a great tool to catch greatness.”
Continue to follow PDHCA Conference updates at #PDHCASummit on Twitter and watch important video of conference speakers on the PDHCA YouTube Channel!