How to Calculate How Much Your Business is Losing from Missed Appointments

emptyswingsMissed appointments are big business. In Queensland, the government has estimated that missed outpatient appointments cost the taxpayer nearly $4 million every month. A recent study by the Federation of Small Businesses estimates that the cost to small and medium businesses in the UK is a total of 60 million minutes each and every day of the working week: that’s billions in unrecoverable losses.

In response, more businesses are turning to SMS appointment reminders as a way of reducing this cost and increasing opportunity. How much could missed appointments be costing your business?

The time cost of changing an appointment

The thing is that whatever business you’re in, missed appointments are going to cost money. Unless you sit down and think about that cost, you probably don’t realise just how much you are losing. The way to calculate how much your missed appointments are costing your business is to start at a point of establishing what each single appointment is worth on average.

For example, let’s say that a hairdresser’s average appointment is worth $75 and that the hairdresser’s shop has five stylists.

If each stylist has 10 appointments in a day, then the hairdresser’s will expect 50 heads of hair to be dressed. But typically 10% of appointments are broken. That’s only one appointment per stylist, and when it’s explained like that it doesn’t sound too bad. But when you consider that this is:

5 stylists x 1 appointment per day missed = 5 appointments per day

Still doesn’t sound too bad, but now let’s see how much that costs in cash terms:

5 appointments x $75 = $375 per day

or

$375 x 6 working days per week = $2,250 per week

or

$375 x 24 working days per month = $9,000 per month

or

$9,000 x 12 months in a year = $108,000 per year

That’s $108,000 of revenue each and every year. And that’s not counting the cost of trying to reschedule those missed appointments, the cost of paying people to sit around and do nothing, or the headache of someone showing up late and throwing out the whole day’s schedule.

Now it’s over to you

timexpieceHave you ever sat down and figured out the real cost of missed appointments to your business?

Count the number of appointments missed in your business over the next two weeks.

Add up the revenue made from kept appointments over the same period, and divide this revenue by the number of appointments kept. That will give you an average per appointment number.

Now multiply the missed appointments by the average revenue per appointment kept, and you’ll get what those missed appointments have cost you. Then simply divide by 2 (weeks) and multiply by 52 (weeks in the year), and you’ll get a figure that is the annual revenue cost to you of all the missed appointments you’re likely to get over the next year.

Go on, work it out now. And that’s just the lost revenue. Your bottom line is going to be hit by all those little add-ons we mentioned above: the time cost to chase up and remind people about appointments, for example. How many hours per week do your staff sit on phones trying to get hold of people to remind them of their appointment times?

Here’s a clue as to the extra time cost: working with directSMS, BrizBrain and Spine saved 22 man hours per week in appointment reminder costs alone. That is money that goes straight to the bottom line.

Contact directSMS today and find out how much you could add to your bottom line with an SMS appointment reminder system.