Wages up 4.75 per cent, payday super, consumables creeping for years. If your price list has not moved, your margin quietly paid for all of it. Here is how to check, and exactly what to say to clients.
Here is a question I have been asking clinic owners for the past two months, and the answer is almost always the same. Your award wages went up 4.75 per cent on 1 July. Payday super started the same day. Your consumables have been creeping up for three years. So, when did your prices last move?
Silence. Sometimes a nervous laugh. Usually something like "I know, I know, I've been meaning to look at it."
Let me say the uncomfortable part out loud. If your costs went up and your prices did not, you did not hold your prices.
You didn't hold your prices. You gave yourself a pay cut. You just did it quietly, and nobody thanked you for it.
Think about the past year in your clinic. Your landlord reviewed the rent. Your suppliers repriced their products, some of them twice. Your team got their award increase on 1 July, as they should. Your insurer certainly did not forget you.
Every single one of them passed their rising costs along the chain. The chain ends at your price list. If your price list did not move, all of those increases landed in one place, your margin. That is not loyalty to your clients. That is a subsidy, and you are the one paying it.
And payday super made it sneakier. It did not raise your costs, but super now leaves your account with every pay run instead of sitting there until the end of the quarter. Same money, much faster exit. Plenty of clinics that were quietly living on that timing gap are now feeling a squeeze they cannot quite explain. If your bank balance feels tighter this quarter even though bookings are fine, this is probably part of why.
Not "what does the clinic down the road charge". Not "what feels fair". This one:
What is actually left after you deliver your busiest treatment?
Take what you charge, subtract the consumables and the wages for the time it takes to deliver, and look at what remains. That is your gross margin on that treatment, and it is the number that decides whether a full diary makes you money or just makes you tired.
Here is a simple example. Say a treatment is priced at $200 and costs you $120 to deliver, so $80 is left to cover the rent, the software, the insurance and you. When wages and products creep up, they eat into that $80 directly. The price stayed still, but what the treatment pays you shrank. Do that across the whole menu for a year or two and you have a busy clinic that somehow never has anything left over. I wrote about that trap in fully booked but no profit.
If you cannot say the number for your top three treatments, that is the first job, and I have built a free tool that does it for you. The Profit by Service calculator takes about ten minutes with your price list in front of you, and it shows you exactly which treatments are carrying the clinic and which ones are being carried.
Before you reprint the whole menu, know your options, because "put everything up 10 per cent" is rarely the smartest first move.
You can adjust the price. You can adjust the mix, doing more of the treatments that make you money and fewer of the ones that do not. You can adjust the time, because a treatment that takes 60 minutes but could be beautifully delivered in 50 just changed its economics without the client paying a cent more. And you can adjust the cost to deliver, which is usually consumables and how the room is used.
Most clinics only ever pull the first lever, usually years too late and in a panic. The owners who stay profitable pull the right lever for the right treatment. Sometimes that is a price rise on two treatments and a quiet retirement of one that loses money every time it is booked.
This is the fear that keeps price lists frozen, so let me tell you what I actually see.
When a clinic raises a fairly priced treatment and communicates it well, almost nothing happens. A handful of people notice. Almost nobody leaves. Your best clients are with you for you, your hands, your results and the way your place makes them feel. They are not auditing your price list against the clinic down the road.
You know what does empty a bank account? Holding your prices for three years while every cost around you climbs. The maths on that is brutal and silent.
The real fear is usually not the number anyway. It is the conversation. So here it is, handled.
For your booking reminders and website, one line is enough:
"From 1 October, some of our treatment prices are changing. Your therapist can talk you through anything on the day."
If a client asks at the front desk, your team says this, warmly and without apologising:
"Our costs went up this year, like they did for everyone, and we've adjusted some prices so we can keep looking after you the way we do. Would you like me to book your next appointment in?"
No essay, no justification tour, no discount offered to soften it. Clients take their cue from your team's tone. If your team treats it as normal business, so will your clients.
One. Run your top three treatments through the Profit by Service calculator. You cannot make a single good pricing decision without knowing what each treatment actually leaves you.
Two. Find your floor. Anything sitting under about 50 per cent gross margin gets repriced or rethought. There is one on almost every menu, usually something everyone loves and nobody has checked.
Three. Move one price. Not the whole list. One treatment, communicated with the lines above. Watch what happens, which in my experience is usually nothing, and let that result give you the confidence to review the rest.
And once your prices actually pay you, make sure the money lands where it should. That is a whole topic of its own, and I have written about it in how much should a clinic owner pay themselves.
Once a year at minimum, and always after a cost event like the 1 July award increase. A price review does not have to mean a price rise. It means checking that every treatment still pays you after what it costs to deliver.
Start with the treatments furthest under water, usually the ones with the thinnest margin and the fullest diary. A staggered approach lets you test the response and keeps the change feeling unremarkable to clients.
No. Announce it simply, once, ahead of time, and give your front desk one warm sentence to use. Over-explaining signals guilt, and you have nothing to feel guilty about. Every other business your clients use has done the same thing this year.
A small number might, and that is a trade you can measure. Losing one price-sensitive client while every remaining treatment earns properly usually leaves you ahead. And if cancellations and no-shows are the leak you are more worried about, take a deposit.
Gross margin per treatment is the first of the five numbers that decide whether your clinic pays you. That is the work I do as a business coach for beauty and skin clinics and a cosmetic clinic business coach across Australia and New Zealand.
Thirty minutes on your real numbers. We will look at your prices, your margins and what to fix first, whether we ever work together or not.
Free, 30 minutes, no prep needed.