Before you put 20 percent off on the menu, here is the maths most clinic owners never see, and five ways to make noise this month without giving your margin away.
Here is the short answer. A Black Friday discount costs you far more than the percentage on the sign. On a treatment with a healthy margin, 20 percent off can mean you need around 40 percent more bookings just to make the same profit you would have made at full price. So before you run a special this month, work out what each discount actually costs you, and only put an offer on the treatments that can carry it.
I am not going to tell you never to run an offer. That is your call, and there are smart ways to do it. But I see the same thing every year. A clinic runs a big Black Friday special, the diary fills up, everyone feels great, and then January and February arrive with a full book of treatments that were already paid for, at a discount, with a full wage bill still to pay. I don't want that for you.
Everyone else is doing it. Your inbox is full of sales. Clients are asking whether you are running anything. And there is a quiet worry underneath it: if you don't, they will go to the clinic down the road that is.
On top of that, a sale feels productive. It brings in cash, it fills gaps, and it gives you something to post about. In a month when you are already tired and the end of the year is racing at you, that feels like the responsible thing to do.
Sometimes it is. Most of the time, it is a decision made on nerves rather than numbers.
Here is the maths, and it is simpler than it looks.
Worked example, illustrative only. A treatment sells for $220 including GST. Take the GST off, because it was never yours, and you have $200. The products used and the therapist's time, including super, cost $70 to deliver. That leaves $130 of gross profit on every booking, a 65 percent gross margin.
Now take 20 percent off. The client pays $176, which is $160 once the GST comes off. Your costs don't change. The products still cost the same and your therapist still gets paid for the hour. So your gross profit drops from $130 to $90.
The sign says 20 percent off. Your profit on that booking just fell by 31 percent.
To make the same $130 you would have made at full price, you now need about 1.4 bookings for every one you had before. That is roughly 44 percent more bookings, more rooms, more therapist hours and more of your energy, to end up exactly where you started.
At 30 percent off, you need almost double the bookings. At 40 percent off, you need more than two and a half times as many. That is the part nobody puts on the Black Friday graphic.
If you want the quick version, the extra bookings you need is your discount divided by your margin minus your discount. Twenty percent off a 65 percent margin is 20 divided by 45, which is 44 percent more bookings.
Your best clients take the deal too. The people who book first on a Black Friday special are very often your loyal regulars, the ones who would have booked at full price anyway. You haven't won a new client. You have just given a discount to someone who was already happy to pay.
Prepaid packs land in your quietest months. When a sale is sold as a pack or a voucher, the money arrives in November and the work arrives in January and February. You are delivering treatments, buying consumables and paying wages, for money that came in weeks ago and has very likely already been spent. I wrote about this pattern in the EOFY discount hangover, and it is the same story at the end of the year.
You teach clients to wait. Run a big sale every November and clients learn that November is when you book. The rest of the year gets harder to fill at full price, and your pricing loses its strength. That is a slow leak, and it is a hard one to fix later.
Every treatment on your menu has a different margin. Some are strong. Some are thin. A flat "20 percent off everything" treats them all the same, and on your thinner treatments it can wipe out the profit completely. The money still comes in, so you never notice. It just comes in with nothing left attached to it.
So before you decide anything, put your most popular treatments through the free Profit by Service calculator. Once you can see the gross margin on each one, you know which treatments can carry an offer and which ones can't. That one step changes the whole conversation. You get to decide with clarity instead of hoping it works out. And clarity creates confidence, especially when everyone around you is shouting about sales.
You can still make noise in the market this month without giving your margin away. Here are five options I work through with clinic owners.
Discounts can work. There is an art to a good offer, and it starts with the numbers. Make it a calculated one, not a reflex.
Done that way, an offer can bring in new clients and fill quiet weeks. Done on a hunch, it just makes you busier for less.
This is the bit I really want you to hear. Your clinic doesn't need a bigger sale. It needs pricing you believe in and the numbers to back it up. Chase the margin, then the revenue. A full diary in January feels great right up until you open the bank account.
The summer season can be the most profitable stretch of your year. You get to decide whether it is.
If you want to see what your own treatments can carry, run them through the free Profit by Service calculator. And if you would rather work through your end-of-year plan with someone, book a free Profit Strategy Call.
Only if you know the gross margin on the treatments you plan to discount. On a treatment with a 65 percent margin, 20 percent off means you need about 44 percent more bookings to make the same profit. If your diary is already busy heading into summer, a blanket discount usually just gives profit away to clients who would have booked anyway.
Take the GST off the price, subtract the products used and the therapist's time including super, and you have the gross profit per booking. Do the same at the discounted price. The gap between the two is what the discount costs you on every booking. The extra bookings you need to break even is your discount divided by your margin minus your discount.
Add value rather than taking money off: an add-on treatment, a mask or a product sample. You can also build packages priced on your numbers, sell gift vouchers at full price, use retail bundles, and reward existing clients with early access or a bonus when they rebook.
Be careful with them. The money arrives in November but the treatments get delivered in January and February, when you still have consumables and wages to pay. If you sell packs, price every session on your numbers and set redemption dates that suit your diary.
The ones with the thinnest margin. Labour-heavy treatments, where a therapist is hands-on for most of the hour, usually have the least room to carry a discount. Run your menu through a profit-by-service calculator first, and leave the thin ones out of any offer.
Margin before markdown is a big part of what I do with owners as an aesthetic clinic business coach and a business coach for beauty and skin clinics. If you haven't costed your menu yet, start with how to price a beauty treatment and what a good margin per treatment looks like.
This article is general information for clinic and practice owners. The figures in the worked examples are illustrative, not industry statistics. It is not tax, legal or financial advice. Your own numbers, structure and obligations are a conversation for your accountant.
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