So switching from nurse to business owner often causes a huge headache! As nurses we are trained for our job role, how to change wound dressings, take bloods or cannulate. Nobody trains you in accounts, KPI analytics, VAT qualifying and non VAT qualifying procedures. Starting a business without any business knowledge is a little like walking through fire and praying you don’t get burnt!
However, one huge factor you need to understand is your profit margin’s. Without understanding your numbers, you cannot run a successful business (well you may but it’s a lot easier when you do know them!)
Something I am consistently asked during mentor calls is; how do I choose my prices? My competitor charges X, but my friend charges Y, so what shall I charge?
Let’s simplify how to choose prices to ensure adequate profit margins! So the price you charge isn’t what you pocket, seems simple right? But it’s quite surprising how many practitioners don’t know what they actually take from each procedure!
So things to factor in when working out your prices & profit margins (with some rough figures thrown in- PLEASE work out your own figures as these aren’t universal to every business);
Room rental or clinic rent- how much do you pay per day or per week? This needs to come off of your treatment price when working out profit. For example; room rental at £100 P/W, treating on average 10 patients P/W = £10 deduction from each patients procedure for room rental. (It costs you £10 per person room rental).
Product cost- cost of each product used such as toxin, fillers or skin boosters. On average 1ml of filler is £60.
Consumables- Numbing cream 30g (£14 per tube, average 10 patients- £1.40 per patient). Sterile gauze swabs (on average £0.18p per pack at 1 per patient), clinisept prep & post (£25 per both- worst case treats 20 patients (£1.25 per patient). Gloves, £5 per box, treats 50 patients £153 cost for the year, £0.30p cost per patient.
Insurance for the year, including medical, premises and public liability. For all potentially £1000 per year. If you treat 10 patients a week, for roughly 50 weeks of the year = £2 per patient costs).
Clinic bills such as water or electricity (if your bills aren’t included in rental) £150 per month, £1800 for the year. Cost per patient £3.60)
Digital consent forms, booking systems and cloud storage. £30 per month, £360 per year. Again based on 500 patients a year- £0.72p cost per patient)
External marketing if you outsource, £450 a month. £5,400 a year. (£10.80 cost per patient @ 500 patients a year.)
Employment costs when you do consider expanding - for another injector or clinic receptionist. This needs to be factored in for every treatment if that member of staff was to perform it rather than yourself.
Sharps and waste removal- £600 per year. (This averages at £1.20 per patient)
Tax @ 20- 25% (will vary on procedure prices)
This list definitely doesn’t cover everything and the numbers won’t be accurate for every person, but you can definitely get the idea! So if we work out a true costing for a 1ml lip filler procedure. Based on the 10 patients per week, at 50 weeks of the year (some A/L).
£10 room rental + £60 product + £3.13 consumables + £2 insurance + + £3.60 electricity + £0.72p clinic software + £10.80 marketing + £1.20 waste removal = £91.45
So your total cost for your 1ml lip filler is £91.45 not including any tax you will pay on money received NOT JUST PROFT. This is where practitioners go wrong- they charge £100. Thinking their product cost is £60, so they’re making £40 a procedure. When in fact once they pay tax @ 20% (£20) they are now in a loss.
The total procedure cost is £111.45 and they are charging £100 equalling a total loss of £11.45.
So when considering a treatment cost you need to factor in all of the above numbers and any other costings to your business. It would be profitable to instead charge £250 for your 1ml lip enhancement with costings of £91.45 + £50 tax = a profit of £108.55 per patient.
For all of those who have reached out unsure on treatment prices, product costings or how to make your business profitable I hope this helps! I know it’s long winded to work this out but it is so beneficial to know! Happy profit hunting!
Grace x
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