Consumables, time, margin, GST, break-even. One treatment costed end to end, so you can do the rest of the menu this week.
Here is the short answer. The price of a beauty treatment is its direct cost, meaning the products used plus the therapist's time including super, divided by one minus the gross margin you want. Then add GST. Everything else, from what the competitor charges to what feels right, comes after that arithmetic, not before it.
Most treatment menus in Australia and New Zealand were not built that way. They were built by looking at the clinic down the road, taking a guess, and never revisiting it while wages went up every July. This is the walkthrough for doing it properly, one treatment at a time. It takes about twenty minutes per treatment the first time and five minutes every year after.
Not from the supplier invoice. From the room. Open the products you use in the treatment and work out how much of each goes on one client, then cost that amount from what you paid for the container. Include the small things: gloves, cotton, wipes, needling cartridges, LED goggles you replace, the product you send home in a sample pot.
Owners guess this number low almost every time. Measuring it once is the single most useful hour you will spend on pricing.
Worked example, illustrative only. A 60 minute advanced facial uses cleanser, enzyme, a peel solution, serum, mask, moisturiser and SPF, plus disposables. Measured and costed, that comes to $14 per treatment.
Door to door, not just hands-on time. Room set-up, consultation, the treatment, the rebook conversation, and turnaround before the next client. Then multiply by a loaded hourly rate for whoever delivers it: their wage plus super. If that is you, use what it would cost to replace you, because your time is not free and a price that pretends it is will break the day you hire.
Worked example, continued. The facial takes 70 minutes door to door. The therapist's loaded rate, wage plus super, is $42 an hour. Labour cost is 70 divided by 60, times $42, which is $49.
Direct cost of the treatment is $14 plus $49, which is $63.
Gross margin is what is left of the ex-GST price after direct cost, as a percentage of that price. For a beauty or skin treatment, the range I work to is 65 to 80 percent. Advanced and machine treatments at the top, labour-heavy treatments at the bottom. What's a good profit margin for a beauty or skin clinic explains the range and why it shifts by treatment.
The formula is simple. Price before GST equals direct cost divided by one minus the target margin.
Worked example, continued. Target margin 72 percent. Price before GST is $63 divided by 0.28, which is $225. Add GST at 10 percent and the menu price is $247.50, which you would round to $249 or $250.
Now compare that with what the clinic in the example was charging. At $195 on the menu, the ex-GST price was $177, the gross profit was $114, and the margin was 64 percent. The clinic was giving away $48 of gross profit on every advanced facial and calling it a healthy treatment.
Price is not a feeling. It is direct cost divided by one minus the margin.
A treatment can have a lovely margin and the clinic can still lose money if there are not enough of them to cover the rent. So before the price goes on the menu, check the clinic's weekly break-even: total overheads, plus your wage, divided by the average gross profit per treatment. That tells you how many treatments a week the clinic must deliver to pay for itself.
Worked example, illustrative only. Overheads of $6,000 a week, including an owner's wage. Average gross profit per treatment across the menu of $110. Break-even is 55 treatments a week. If the diary carries 70, the clinic is fine. If it carries 50, either the margin per treatment has to rise or the diary has to fill, and pricing correctly is the fastest of the two. Weekly break-even is one of the five clinic numbers and it is worth knowing by heart.
The costed price is the floor. It is the lowest number that lets the treatment carry its share of the clinic and pay you. The final price sits at or above it, and where it sits is a decision about who you are, not about what the competitor charges.
Two clinics can deliver the same 60 minute facial. One is a walk-in with a quick consult and a rebook card. The other has a proper skin consultation, a treatment plan, a home care conversation and a follow-up message a week later. Same consumables, similar time, very different experience, and the client knows it. The second clinic has earned the right to a higher price, and pricing it at the first clinic's number is a choice to give that away.
So once the maths is done, ask the positioning question. What does a client actually get when they book with you, and what is that worth to the person you built the clinic for? Set the price there. If you need to lift prices to get there, here is how to do it and what to say to clients.
Round to a number that looks intentional. Build packages from costed treatments so a bundle never dips below the margin you set. Then put a note in the diary for the first week of July every year, because in Australia that is when award wages and super move and your prices should move with them.
Take your most booked treatment, measure the consumables in the room, time it door to door, and put it through the free profit-by-service calculator. It runs the formula for you and shows the gap between your menu price and your costed price. If there is a gap, the free Profit Strategy Call is where we work out what to move first and how to say it to clients.
Measure the consumables used in the room, cost the therapist's time including super and turnaround, add the two together, then divide by one minus your target gross margin. That gives you the ex-GST price. Add GST for the menu. Check it against your weekly break-even and against what the treatment is worth to the client, then round to a sensible number.
For most beauty and skin treatments, 65 to 80 percent after consumables and labour. Advanced and machine-based treatments sit at the top of that range, labour-heavy treatments at the bottom. Injectables run lower because of product and prescriber costs and should be judged on dollars per hour as well as percentage.
No. Their price tells you nothing about their costs, their wages or whether they are profitable. Cost your treatment properly, set the margin, and treat that as the floor. Then price to your own positioning: the consultation, the treatment plan, the results and the experience your client gets. That is what the client is paying for, and it is yours, not the market's.
At what it would cost to hire someone to do them. Award rate for the role, plus what the market really pays, plus super. If your time is left out, the margin is fake, the price is too low, and the first time you hire a therapist to replace you the numbers will fall over.
Pricing is one of the three levers we pull first in one-on-one business coaching for clinic owners across Australia and New Zealand. Related reading: what's a good profit margin for a beauty or skin clinic, the EOFY discount hangover, and busy clinic but no profit.
By clinic type: business coach for beauty and skin clinics, cosmetic clinic business coach, and wellness and spa clinic business coach.
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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