Did you know that you can increase your prices by 10%, have your sales drop by 22%, and still generate the same amount of income?
Let’s see how…
Imagine your aesthetic clinic generates £500,000 in sales, and the gross profit on those sales is £175,000.
What this means is that for every £1 generated in sales, 65p goes on cost of goods, leaving 35p in profit (before tax)
With me so far?
Okay – Now let’s say you increase your prices by just 10%…
So, assuming for the moment you don’t lose any patients, instead of generating £500,000 in sales, the clinic is now generating £550,000 in sales.
And that extra £50K is pure extra profit
The total profit has increased from £175,000 to £225,000 – that’s an increase of 28.57% for no extra work.
Still with me?
Here’s the REAL upshot of all of this…
Let’s assume you LOSE some patients because of the price increase.
How many can you lose before the clinic actually starts losing money?
Working out the maths shows you can lose 22.2% of your sales and still generate the same amount of income.
However, ask any of my clients who have implemented a price increase in their clinic, and they’ll tell you they didn’t actually lose any patients at all.
So, in this example, a price increase of just 10% resulted in a 28.57% hike in profits.
Or another way of looking at it is to say you can afford to lose 22% of your sales and generate the same income. That’s the difference between finishing work on Thursday and working through till Friday afternoon.
I think that’s a good deal, don’t you?
So, just do it, as they say.
Put your prices up!