We’ve been talking a lot lately about the tumultuous relationship between local business owners and the summertime months. Yes, everyone loves the summer, but with your customers being nearly impossible to reach or being away on vacation it can leave your seats and your wallet, well… pretty empty.
Do you know exactly how much missed appointments and empty gaps in your schedule have been robbing your wallet? It might be more than you ever could have imagined. Well, today we’re going to clear the air and shine a light on open appointments so you can identify exactly how much money empty gaps in your schedule are costing you per month.
We’ve created this nifty ROI Calculator to help make things a little more clear. Here’s how it works:
Step 1: Average Hourly Employee Wage x Average Time Per Appointment
Now, the first step to seeing how much empty schedule gaps are costing you is to take your average hourly employee wage and multiply that by your average time per appointment. Let’s say your average hourly wage comes out to $18. Additionally, let’s say your average time per appointment is an hour.
Alright, so right now we’re at $18 — remember that number.
Why take this into account? The reason why your employees’ average wage and average appointment time is important is because when there are missed appointments or slow times that appointments aren’t being booked, even if customers aren’t there you’re still paying your employee as if they were. Empty gaps and missed appointments force you to pay your staff for essentially idle time. This is an important loss that’s important to highlight when really trying to distinguish how much empty gaps in your schedule are costing you.
Step 2: Average Hourly Employee Wage and Time Per Appointment x # of Open Appointments Per Month
The next thing you’re going to do is take the number you received from the first step ($18) and multiply that by the average number of open appointments you see per month. So, for this number you want to think about all the cancelled appointments or slow times that could (should) have been filled with a scheduled appointment. Let’s say for the month of July your business had 5 cancellations and 10 open gaps that could have been filled with a booked appointment. That brings the number of missed appointments to 15. Now, multiple the $18 we came to in the first step and by the 15 open appointments we just calculated.
$18 x 15 = $270
Why take this into account? In the first step we established how much you're losing per appointment on idle employee time. Now we’re taking that per appointment rate and multiplying it by the total number of missed appointments for the month. So, in this scenario you're paying employees $270 a month for essentially idle time.
Step 3: Average Cost of Service x # of Open Appointments per Month
Okay, so at this point we’ve figured out how much money is being lost for idle employee time. Now, we’re going to calculate how much money you’re missing out on per service cost. So, figure out the average cost of your services. Let’s say it’s about $60. Next take that average service cost and multiply it by the average number of missed or cancelled appointments per month we’ve already established earlier.
$60 x 15 = $900
Why take this into account? This step really highlights all the missed opportunity for the month. If on average customers spend $60 on your services and during the month of July there were 15 opportunities to book that weren’t, it means that’s about $900 your business could have gained but missed out on.
Final Step: Total Employee Revenue Fees + Total Service Cost Loss
The final step for figuring out how much empty gaps and missed appointments are costing your business is to add that total number of employee revenue fees to the number of service cost loss. In our scenario that would be…
$270 + $900 = $1170
That means in fictional scenario this business would have lost about $1170 dollars during the month of July to missed booking opportunities. Not ideal…
Sometimes small business owners miss out on more revenue than they could have ever realized. The first step to fixing this is by identifying the reality of it. Curious how much money your business could be potentially losing on a monthly basis? Play around with our free ROI Calculator and find out today!