How to Price Services

I often get asked during consultations on how to price services. The answer is difficult to answer because there are so many factors to consider. What is paramount though is that you price your services just underneath what the competition is pricing theirs. Yes, undercut them. I have found in my business career that when you undercut the competition, you will get busy very fast.  So how do you determine what you should be charging?

It is very important you charge reasonable rates first and foremost. Prices for a particular service throughout the country will vary, but usually they will be within a similar range. To figure out the price of a service, you need to determine the following 3 things:

  1. How much disposable income is there in your region?
  2. What is the estimated size of your target market?
  3. What is the competition charging?

The most important question to answer is what your competition is charging. The socioeconomic status of your region is important but there are always people who have disposable income in any given area. As I have stated before, my men’s health clinic is very profitable and it is located in one of the poorest counties in the country! People have money to spend, therefore you need to guesstimate how large your target market is.

During the business planning phase of your business and once you have chosen your niched practice skill, you need to figure out what the competition is charging. This is the most critical element in determining the price of your services. You do this by calling them and acting like you’re a potential patient. Pick the receptionists brain. They will usually tell you everything you want to know about their prices.

Once you call all the competition in your area, you need to call other places within the region or even other states. This will give you a good ballpark figure on what other practices are charging. After you collect about 8 different prices, you need to average them out. You will be amazed at how expensive some places are and how reasonable others are. What do you do at this point? Price it cheaper than the closest one to you.

When I started my medical cannabis clinic, I called all the clinics in the region and undercut everyone by $25-$50. When I did this, word got out quick and I stole the market within 6 months. Other clinics despised me but so what. What are they going to do? Within 1 year, every clinic brought their prices down further but I still underpriced them.

Remember, some money is better than no money! As long as you are making a profit, who cares.

I did the same thing with my men’s health clinic. I undercut the regional competition. By charging reasonable prices I was able to tap into the middle-class market. This expanded my business considerably but my target market was still higher socioeconomic men.

When you are trying to figure out what the price of your services will be, just undercut what the competition is doing. As long as what you are doing is still profitable and worth your time, it is worthwhile to pursue. By charging cheaper prices, your patient volume will be higher, thus it will offset the cheaper prices. A high volume, cheap service will do well. On the other hand, a high priced, low volume clinic does well too. Therefore, you need to determine what you want.

I believe that a high volume and low-cost practice is more profitable in the long run, but it requires much more work because you are seeing more patients. If you don’t want to work hard, then be a high priced and low volume clinic. You can still make a lot of money but not as much as the low priced and high volume one. So my recommendation is to be the cheaper place is town!

25 Responses

    1. Yes, cannabis evaluations only. When you start a niche practice, stick to that one service only. I will be releasing a course on how to start a medical cannabis clinic after I release my book.

      1. So, you have medical cannabis clinic and men’s health clinic. Are they at separate locations or the same location but different companies/ websites etc?

        1. Every business I own operates under separate companies, websites, offices, etc… I just opened a stem cell center in an adjacent office to my men’s health clinic, that has been the only somewhat “exception.” Otherwise, everything is separate. When you do this, it gives the sense that the office specializes in that particular service. When you offer all types of services at one location, it makes it a one stop shop and unprofessional appearing to many patients.

          In addition, when you operate under separate LLC’s and tax IDs, it provides you multiple layers of protection in terms of liability and is beneficial from a tax perspective.

  1. I’ve read several of your posts. It seems you consider yourself a successful example of how other NPs should practice. I wonder if you would share your journey to becoming an NP? Did you ever consider medical school and if not why? Did you apply to medical school ever? If not why? Because you didn’t want to spend that many years earning the right to practice independently. It’s the easy way out.
    Also wondering would you be willing to share your ballpark yearly take home income from all your endeavors? I’m sure all of your followers would like to know! Several of your posts seem highly profit driven. No one faults you for wanting to make a living but the phrases you use such as “undercut” and “almost like cheating” and “business is business” all lend a certain sentiment that your character is not something that means much to you. People should not go into “practicing medicine” if their number one goal is be rich. I’m sorry you chose the wrong career path. Medicine is a privilege and practicing independently without a physician’s oversight is dangerous. You have not received enough training or seen enough pathology to safely practice independently. I am an emergency room physician. I make great income but I will never be paid enough for my ability to save a life through critical procedures like intubating, placing chest tubes and central lines and reducing fractures or for the heavy responsibility that is placed on me to tell family members that their loved one has died. I work closely with some amazing NPs and PAs very intelligent hard workers who come to me often throughout our shifts with questions regarding clinical cases. Why because I am there to guide them and they know that I have liability for their decisions. The fact that you practice independently leaves me to wonder where do you turn when you don’t know what to do with a patient? I know the answer it’s rhetorical. NPs send everything with even the slightest amount of risk to emergency departments. Because they don’t have the clinical skills or knowledge to care for the sickest highest risk patients. You’d rather profit of people who have anxiety or chronic pain by handing out medical marijuana and giving out Viagra and testosterone than take care of sick patients who actually need the most help for the best price. Patients such as those with brittle diabetes or end stage kidney, heart, or liver disease need affordable health care why didn’t you choose that as a “niche”.

    1. 1. Considered it. I did not have the resources to pursue it. My undergrad degree was in biology. I had all the pre-reqs and a 3.6 GPA, but I lacked the financial ability to apply to schools, travel for interviews, etc… I grew up VERY poor. It had nothing to do with not wanting to put the time into it. I was financially strapped, had family obligations, etc…
      2. I make a healthy 6 figure income. I do not need to divulge exact amounts.
      3. I understand my scope of practice and what I am capable of doing. If I have a difficult or complicated case, I refer out to specialists. If it is a borderline case, I have physician friends I can bounce ideas off of, which is rare anymore, maybe once a year.
      4. I am a business man and a NP. I care for my patients deeply and I love helping people. I also enjoy business. I enjoy my niches and I hardly just “hand out” meds and medical cannabis cards. I practice reasonably and I do not operate “pill mill” type practices. Far from it.

        1. Each state has different requirements. But the most common conditions are chronic pain, cancer, insomnia, anxiety, and PTSD.

      1. Mic drop!!!

        Spot-on Justin. I am wondering if Brandy is a physician or PA…

        These responses, mostly from physicians (my opinion), are truly condescending and insecure. I have followed your site since 2020. Was working a Covid Crisis APRN job for Matrix Medical at a Smithfield pig packing plant: Making $105/hour with $80 per day stipend, and car rental and hotel covered. (Bonuses were given after every 13-week commitment—this was put in savings to pay off debt that was accrued during my furloughed job with LifeLine Community Health: JOKE doing Medicare visits. A trained monkey can do these. My value as a provider was zero. Clients paid for the LifeLine services, but saw no value in my offerings. They went to their provider for these visits. Unfortunately, when patients had to pay an out-of-pocket charge for my visit, it was ugly. Of course, once the crisis went away, they took our pay down to $80/hour. This pay is still great for Nebraska—so sad. But the so-called crisis was still present for a year and a half. This was wonderful for me to catch-up on CEU’s, study your site, buy courses, and do my homework.

        Side Note: During my RN years (graduate school), I started a home IV business. I feel I was working more hours than the money I was bringing in. In the end, not worth my time or money.

        A bit about myself:

        I have been a BSN since May of 1996. Worked: Pediatric Med/Surg, Pediatric ICU, Family Practice Clinic, Pediatric Clinic, Internal Medicine Clinic, Pediatric and Women’s OR, and Labor & Delivery.

        L&D for 17+ years with Charge Nurse experience. Soooo…healthy people that come in and go home does volumes on my mental health. After graduating with my MSN, FPNP I sought out jobs promoting health and wellness.

        Long story short…

        In May of 2021, we sign-on to a local franchise called Live Hydration Spa with my bonus money from Matrix Medical.

        https://livehydrationspa.com/location/eagle-run/

        My husband does the business-side and I am the NP/Medical Director for our location in Omaha, NE—Full-Practice Authority state!!!
        Our FDD states that we do IV hydration, detox foot baths, and O2 therapy. 7.5% royalties on income and 1% on brand is given monthly to corporate. This comes to be about $5000+ per month for us. I am the Medical Director for another Live Hydration Spa in Lakeland, FL with Clearwater, FL pending. Corporate (an RN and APRN that started this company in 2018) promised me additional Medical Director sites in other Full-Practice Authority states…as of now, I only have one that pays $1800/month. $600 to corporate and $1200 to me. Corporate takes from the location and then pays me my $1200. This is outrageous what they charge their franchises (in my opinion). Especially after reading your posts regarding Medical Director fees. Fortunately, or unfortunately, I am our location’s owner and medical director…but feel that this is hindering me moving forward in my NP career due to our contract (FDD), and non-compete clause (which I know rarely hold-up in court, but can deplete our funds due to court costs). Corporate has over 77 locations (not all open yet) and 22 states…this has been since starting to franchise their brand in April 2021.

        One of my huge mistakes, is that I brought BioTE, Ozone therapy, weight-loss, and the Skin Better Science Skin Care line to Live. Patients asked for this. Now this is under the Live brand. BioTE was due to my DEA location (testosterone) being my business address. Training was only $850 compared to $3000+ due to negotiations made by corporate with BioTE.

        My goal is to start another business with my RN sister at a wellness company. We will list my sister as the business owner and myself as her medical director, the work around for the non-compete with LIVE. We can rent a room, or two for $375-$550/month=120 to 300sq feet rooms (over a one to two year contract. Our services will include IV hydration, detox foot baths, weight-loss, PRP injections, vitamin injections, laser hair removal, and tattoo removal. My sister wants to do laser—this is her doing for the most part).

        I know this e-mail is FULL of questions. Could I schedule a consultation with you to discuss my options? I do need to talk to my contract lawyer too.

        Thank you so much,

        Robyn Rafter, MSN, APRN, FPNP-BC

    2. wow Brandy Primary care Dr. sends patients to the Emergency Room alot . Shaming Justin for making money is not good. People come to him, he is not pulling people off the street and forcing them. willing people getting care because they wanted the care. The cost of an emergency room is not free or discounted. Those cost several hundreds dollars.

    3. I found your comments very rude and inappropriate. Seems like there are a large amount of doctors who feel it is there job to shame NPs. Not sure why unless they are just that insecure. If you haven’t noticed, it doesn’t happen the other way around. NPs really do not troll physician blogs and drop nasty comments. Why, because the vast majority of us (and yes I am both a NNP and a FNP) could care less. In the 32 years I have been a provider do you know how many green residents I have taught to do things? I may have even saved a few critical babies in my years. Wow, to say that NPs don’t do critical care and can’t take care of those patients? You are very very out of touch with reality and with the scope of practice and skill set of NPs. You should educate yourself and honestly keep your rude comments to yourself where they belong. Just in case you are wondering, I have delivered babies, intubated countless patients, placed countless central lines, PICC lines, UVCs and UACs, done thousands of Art sticks, chest tubes, just to name a few of the skills I have. I perform the exact same job as any physician there, and have more experience than many I work with. You need a lesson in humility and appreciation for all types of people and providers. I will pray that you learn to love others and be kind.

  2. You have opened numerous clinics. How do you staff these? Do you hire a provider and staff from the start? This would mean you would need substantial capital to pay salaries until the practice started generating enough income to pay staff and expenses. That is a huge expense. Please elaborate on this.

    1. You are thinking about this wrong… I see patients myself with each practice or hire an NP to see patients on a 100% production model. This costs me nothing. If they see patients, they get paid, if they don’t see patients, they don’t get paid. So, it is no risk on my end. I do pay for ONE medical assistant to staff the practice when I start. This is $15 an hour for 30 hours a week… you are talking about a whopping $2200 a month for staffing. I wouldn’t consider this “substantial capital.” Regardless, I started my medical cannabis practice 100% solo and got this to $10k a month by myself… I started my 2 men’s health practices with one MA each. I started my telemed practice and operated it myself but just hired a dozen NPs to see patients on a production model. This is not complicated. You are lead to believe it “costs a lot of money” and “requires a lot of employees” when it actually doesn’t. My 1st men’s health practice has 2 MAs, myself, one PRN production based NP, and we generate $50-55k a month. Avoid insurance, stick with cash, and keep your operations SIMPLE, and you will generate a profit working 10 hours a week. This is not an exaggeration.

  3. Brandy posted back in 2019, but I would say to her:
    NPs as well as MDs send patients to the ER every day because they have assessed that the patient needs a higher level of care. You are right that NPs in primary practice cannot handle a stroke or heart attack in the clinic setting, but neither can an MD. I’m an NP in a clinic where I manage diabetic patients. I send symptomatic patients with blood pressures over >180 to the ED because I’m not going to manage that in the clinic. I sent a diabetic patient one day to the ER based on my assessment and he was admitted with a GI bleed. Sending appropriate patients to the ER is part of my job.
    The clinic is part of a hospital which employs NPs in the ICU who can intubate, place central lines, and chest tubes independently. These NPs go through additional rigorous training to be able to work as independent providers in the ICU without MD oversight.
    What’s the difference between Justin making a profit in his niche and MDs who make a profit as plastic surgeons? Are plastic surgeons in that niche because they really want to help their patients or they really want to make a profit or both? If you find something wrong with helping others and making money then you should be pointing your finger at pharmaceutical companies for being unethical, not Justin.

    1. I loved your reply to Brandy, Grace. NPs mostly working tremendous hours as a nurse before going into NP profession (mostly) & as a nurse we have yearly CEUs to obtained accordingly to where we work. Nurses also have bedside manners on how to talk to patients & practice holistically!
      As healthcare providers, we should work & support each other than point fingers to each other Brandy!

    2. I completely agree! I became a NP after 20 years of emergency room, and urgent care experience, then three years as a FNP in the urgent care. I worked independently as was required by the hospital organization performing the exact same job as MDs in other urgent care locations, except was paid much less for performing same role! We go through 7 years of actual schooling, then clinical rotations on top of that, I spent 160 of my hours in the emergency room. I think NPs, just like MDs, know their resources, like UptoDate, other helpful guideline apps, and colleagues, and know how and when to use them! I think NPs are a threat to many MDs, and it shouldn’t be this way. How much better it is for patients to have a collaborative healthcare team with the patient’s best interest in mind? I think this notion of NPs are not as competent as MDs is ridiculous. I have had MDs ask me my opinion on cases, and actually had to stop a MD from giving aspirin to a new onset stroke patient. I think there are incompetent NPs and MDs, that is not isolated to NPs. Big Pharma is a bigger problem than worrying about what NPs are doing in their roles, 26 states allow full practice authority, more will follow. The evidence has shown that the quality of care is often better by NPs, and patient outcomes are equal, or even better with NPs. I would focus on providing great care in the ER, and collaborating well with the NPs/PAs, and stop seeing them as a threat, and rather a welcomed member/collaborator of the health care team.

  4. Do you find with your weight loss clinic and or TRT therapy that with you monthly subscription its better to include the cost of medications/supplies within that membership? or do you find more success with having a monthly membership, say $75-100 a month and have the patient pay for their scripts seperately?

  5. Hi Justin,
    I’d like to know how you share/publish/advertise your pricing to the patients. Besides general cash prices, I’m creating a sort of subscription/membership package, but as far as I thought, one shouldn’t just post the prices all over the place so the competitors can see/know as well…When I search, I don’t really see them online from other practices…I’d love to hear your thoughts/suggestions! Also, how does one order medications to have to give out/prescribe at the clinic (other than med rep samples?)? Thanks so much!

    1. I personally don’t list the prices on the website. I want them to call so I can sell them on the services. In terms fo medications, you just order them directly from a pharmaceutical vendor like we discuss in the courses

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