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“You can get past the dead end. You can break through the ceiling. I did and so have countless others.”

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!

8 thoughts on “How to Price Services

    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.

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