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Put your prices up by 15% - before everyone else does
- Chris Barrow
- Nov 1, 2024
- 1 min read
Employer's National Insurance up;
New minimum wage set at 6.70% increase;
A large Employer interviewed on Radio 4 yesterday morning said that they didn't want to sack people - and so would "have to pass the cost on to the consumer".
So here's a quick quiz question.......
If you pay the new N.I. (well you have no choice about that);
And everyone in your team knocks on your door and asks for a minimum 6.70% pay rise..
How does that affect your wages KPI?
Rough guide - it could add about 2.50% of turnover to your payroll costs.
How much will you need to increase your prices to pay for the increased costs of employment, as well as operating costs and clinicians?
Rough guide - you will need to increase your prices by around 15%.
I got forwarded this article by another colleague of mine who is considering upping his costs at his practice based on this article. I am going to use a 30-minute dental hygiene appointment as an example, same as what I did for him to illustrate why a 15% price uplift would be excessive and counterproductive:
Currently, the average fee for a 30-minute hygiene appointment is £70. A 15% increase would mean raising the fee to £80.50, adding an additional £10.50 for what patients perceive as a routine, preventative care visit. This is problematic at so many levels:
Patient Perception of Value
A hygiene appointment is a routine service, and patients may struggle to justify the increased cost, especially if no obvious enhancements…
I think these figures are a little far fetched. Raising fees by 15% going to push exisiting patients right out the door and repel newcomers, no matter how shiny the practice. Yes an increase is warranted but there has to be a little sense in it too.
The maths on this doesn’t seem to add up when putting these figures into the wages to price increase calculator.
I am privileged to work in a “Barrowed up” practice and we had a clinical meet the day after the seminar.
we concluded that 20% now while the budget was glowing red hot from media scrutiny was the way to go
The changes take affect next April 2025 so when would you advise the price increase takes place….immediately or in April next year?