This article summarizes the KPIs, or "Key Performance Indicators" for recovery residences.
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💡 The Importance of KPIs (Key Performance Indicators)
Learn about the Key Performance Indicators, or KPIs, for recovery housing
What are KPIs?
Key Performance Indicators (KPIs) are measurable values that help organizations track progress toward specific objectives. In a recovery home setting, KPIs provide clear metrics to assess how well the facility is functioning in key areas like recovery support, community stability, business profitability, guest outcomes, and operational efficiency. These indicators can range from tangible elements like rent collections rates to more subjective elements like the strength of the recovery community in the home.
Why do KPIs matter?
KPIs are crucial in a recovery home because they provide data-driven insights that help improve the quality of recovery housing and operational efficiency. Tracking KPIs enables you to identify areas that are performing well and those that may need improvement.
By continuously measuring KPIs, recovery homes can:
- Ensure guests are supported
- House Mentors are equipped
- Support revenue and profit goals
- Make data-informed decisions to enhance effectiveness
- Demonstrate accountability to stakeholders like referral sources and certification agencies
📈 VSL' Model for Tracking Success
VSL's model for KPIs combine mission and business goals
What really makes a good recovery home?
A good recovery home balances mission (doing good) and business (doing well). At its core, recovery housing is designed to support guests and House Mentors (the mission), and meet financial goals for the operator (the business).
- The mission provides guests and House Mentors with the support they need and creates a thriving recovery community
- The business ensures the operator and their homes remain financially stable in order to continue this important work
The mission lens and KPIs - doing good
Mission KPIs ensure that the home remains true to its mission of fostering a supportive community where guests can recover and thrive. Some examples include:
- Guest Experience: Frequent check-ins at the home and asking questions will help verify that guests are experiencing a positive and recovery-focused home environment.
- Support Structure: Ask guests and House Mentors: do you feel supported? What can we improve to provide you with what you need at this point in your recovery?
- Recovery Environment: Assess the home’s cleanliness, safety, and community participation to maintain a stable and supportive recovery setting.
The business lens and KPIs - doing well
Business KPIs ensure that the recovery home operates efficiently, remains financially viable, and can continue to serve guests in the long term. Business KPIs include:
- Occupancy: Percentage of beds filled; higher occupancy ensures stable revenue.
- Revenue: Total income from rent, fees, and other sources; helps maintain financial stability.
- Net Income: The difference between revenue and expenses; positive net income allows for reinvestment and long-term sustainability of the operator and their home(s).
A recovery home thrives when both the mission (doing good) and the business (doing well) are balanced. Strong guest support and a healthy environment (mission) lead to higher occupancy and better collections (business), creating a sustainable, impactful recovery home.
Leading v. lagging indicators
In the context of recovery home KPIs, leading indicators are predictive measures that provide insight into future performance, while lagging indicators reflect outcomes based on past performance.
On the business side, occupancy is a leading indicator that shows the home’s ability to attract and retain residents, which directly influences future revenue. Profitability, on the other hand, is a lagging indicator, representing the financial outcomes of past occu
pancy and expense management.
On the mission side, standards (such as enforcing community rules and guest engagement) serve as a leading indicator, as they shape the environment and support structure that can predict positive guest outcomes. Recovery success is a lagging indicator, showing the result of consistent standards and support over time, reflected in guest recovery maintenance and long-term stability.
The elements which define recovery home KPIs
| Elements: | Mission lens Doing good |
Business Lens Doing well |
| Recovery Home Leadership Both House Mentor(s) and Operator understand their role, are capable of undertaking it, have been trained, and receive ongoing support. Operations Domain |
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| Community & Guest Support Guests understand the purpose of recovery housing and are supported by the House Mentor and peers in their recovery, creating a thriving recovery community where standards are kept and recovery is celebrated. Operations Domain |
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| Referral Network There is a well-established referral network measured by the quantity and quality of referral sources and the strength of relationships. Outreach Domain |
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| Community Outreach Engagement Frequent and effective engagement with referral sources, including telephone, email, and in-person outreach activities. Outreach Domain |
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| Rent Payment Culture Guests understand the importance of paying rent; more than 95% of charges are paid; more than 80% of payments are made on time. Administrative Domain |
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| Financial Stewardship Bills are consistently paid on time, and expenses are monitored to ensure responsible and sustainable use of financial resources. Administrative Domain |
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| Administrative & Accounting Effective guest record-keeping and accurate bookkeeping, timely filings, compliance with legal and regulatory standards. Administrative Domain |
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| Facility Management The proper upkeep, maintenance, and safety of the recovery home’s physical environment ensure that it remains conducive to guest recovery and operational efficiency. Facilities Domain |
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📊 Reviewing Your Home's Financials
Learn how to assess your recovery home's business KPIs
What is an "income statement"?
The income statement, also known as the profit and loss statement, is a crucial financial document that provides a summary of your revenues, expenses, and profits over a specific period. Here’s a brief description:
Income statement sections:
- Revenues: The total income generated from sales of goods or services: rent, intake fees, and all other revenues earned by the home.
- Expenses: The costs incurred in the process of earning revenue: utilities, lease expense, drug screens, etc.
- Net Income: The profit or loss after all revenues and expenses have been accounted for. It is calculated as Revenues - Expenses.
The income statement helps operators understand the financial performance of the home, identify trends, and make informed decisions to improve profitability.
Viewing your income statements
Each home will have a separate income statement, which can be viewed in the Reports area of Buildium. This allows operators to:
- Assess Individual Performance: Review the financial performance of each home separately.
- Identify Specific Trends: Spot issues or opportunities within individual homes.
Additionally, operators can view a Consolidated Income Statement for all their homes. This comprehensive report shows overall performance across all of the homes in the report. This is also the report used when filing your taxes.
How to view income statements in Buildium
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Access your Buildium account using your login credentials
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Go to the Reports section within Buildium
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Choose the Type of Income Statement (click links below)
- Select the desired report criteria
- Select the desired home (when viewing a consolidated statement, select your business entity as a rental owner instead of a specific home)
- Select the desired date range
- Choose the interval (monthly, quarterly, or yearly)
- Select "Cash" as the accounting basis (recommended - this will display funds collected, and will omit funds that are owed to you but not yet collected from you)
- Run the report
- View or download the report as needed
Interpreting your income statement
Understanding an income statement is essential for assessing the financial health of your recovery home. Here's a quick guide to interpreting key components:
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Revenue: The total amount displayed reflects all recorded revenue in Buildium during the selected time period. This will be broken out in terms of rent, intake fees, laundry income, or other income items.
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Expenses: Your expenses will display all checks and bills entered into the system, separated out by each line item--e.g. electric expense, maintenance, drug screens, lease.
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Net Income: Calculated as Revenue - Expenses; represents the final profit or loss after accounting for all revenues and expenses. Positive net income indicates profitability, while a negative net income indicates a loss.
Tips for Interpretation:
- Compare Periods: Analyze changes in revenues, expenses, and profits over different periods (monthly, quarterly, yearly).
- Identify Trends: Look for consistent increases or decreases in key areas.
- Drill Down for Details: If something looks incorrect or if there is a significant change when comparing periods, click into each of the revenue or expense items for additional detail.
- Analyze Ratios: Use financial ratios like profit margin (Net Income / Revenue) to evaluate efficiency and profitability.
- Benchmarking: Compare your income statement to other operators to gauge performance. Reach out to your Support Manager for up-to-date information on VSL-wide averages for collections, utility use, etc.
Regularly reviewing and interpreting your income statement helps you make informed financial decisions, identify potential issues, and plan for future growth of your recovery home.