Are Ketamine Clinics Profitable? Part 1: Exploring Revenue
A common question we get asked is, “How profitable are ketamine clinics?”
People who ask this want to regain their time. They want more time to spend with their kids or maybe travel with their partner. Although they do want more time, they are already used to a certain level of income and lifestyle. Thus, they want to know if opening a ketamine clinic can help them regain their autonomy and love of medicine while still matching or exceeding their current income.
Another reason is that since the vast majority of physicians today are employees, they are used to receiving benefits like health insurance and retirement. Therefore, as we talk to these potential future ketamine specialists, we discover that deep down, the question really boils down to, “Can opening a ketamine clinic match or surpass how much I make as an employed doctor with benefits?”
This is why the question…”how profitable " and “how much money can I make with a ketamine clinic?” is so common.
While it potentially could, you may not be earning as much when you are just starting out.
In the first of this 2-part blog series, we are going to answer the questions “Are ketamine clinics profitable” and explore the factors that affect a ketamine clinic’s revenue. Check out Part 2 here.
There is no exact answer as to how much you’ll be earning from your ketamine clinic because there are so many factors involved.
Starting A Ketamine Clinic: Seeing patients minus costs
Getting to the heart of the questions above, there is no black-and-white answer for this.
The reason why there’s no exact answer is because there are a lot of different factors that come into play. Also, to create a prediction model means that you have to make a lot of assumptions about these factors (which will be discussed in the next paragraphs).
If business were really that simple, it’s easy to just assume that the money you take home is equal to the number of patients you see multiplied by how much you charge per infusion minus the cost of running a ketamine clinic. Pretty obvious right? No one needs to go to business school to figure that out. Another way of looking at it is revenue (this is the amount of money received through providing ketamine infusions) minus expenses.
Profit = Revenue - Expenses
But nothing in business (and life) is ever really that simple! Let’s discuss why in the next section.
To predict how much revenue your ketamine clinic will be making, there are a few factors that you need to look into.
Factors Affecting A Ketamine Clinic’s Revenue
While that above equation is pretty straightforward and simple, by no means is it easy. In fact, it’s far from it. As we mentioned in the previous paragraph, assumptions have to be made if you want to create a prediction model to determine how successful or profitable your clinic could be. A clinic’s revenue, just like any other business, can be quite variable. Let's look at some factors that can affect revenue:
1. Marketing
2. Local demand for ketamine & infusion price
3. Competition
4. Patients returning for infusions (i.e. liking you as a doctor and ketamine infusionist) aka patient experience
Now let's dive into each one a little more…
Unlike working in a hospital, when you run your own clinic, the inflow of patients is completely reliant on you and your marketing efforts.
The Importance of Marketing Your Ketamine Clinic
Ketamine clinics aren’t emergency departments, which have a constant inflow of patients. How well you market and how strong your reputation will affect how many patients and referrals you attract. Before someone hands over their credit card, they need to find you and trust you. You gain their trust from your medical reputation and through your marketing and branding efforts. Similar to any relationship, the more they get to know and trust you, the more likely they will come to you, return, and refer others.
Your marketing and branding will be integral to your success, especially as more ketamine clinics enter the market. We can’t stress marketing enough, and yes, it is an expense, but it's so important that we are putting it as a factor that can affect both revenue and expenses.
The amount, or absence, of competition will determine how much you can price your infusions.
Demand for Ketamine Infusions: Infusion Price & Competition
Demand for your services will also be affected by your infusion price and if there is competition.
The more ketamine clinics there are, the less the demand for your services. Potential patients have more options and therefore can go elsewhere. On the other hand, if you have a lower infusion price compared to your competitors, then demand for your infusions would increase in comparison. Therefore the higher the price, the less the demand for your infusions.
So now you may be wondering, is there a perfect price to charge? Frankly, there isn’t. But there can be an ideal price depending on your reputation and whether you have competition or not. If you have no competition, you could potentially charge how much you want. The more competition you have, the more you will need to consider adjusting your pricing based on how much others are charging.
If you have a great reputation aka strong branding, then people would be willing to pay a higher price for your services compared to the competition. They may even be willing to fly to you. They trust you, and would rather pay extra for your services. This is why reputation is so important.
How you take care of your patients and give them a great experience will vastly improve the chances of success of your ketamine clinic.
Success Equals Transformative Patient Experience
Part of the stability of your clinic will be built on the number of returning patients, aka your boosters. This is highly dependent on the patient’s experience at your clinic. Their experience includes improvement in pain and depression, customer service, and their sense of feeling safe and comfortable overall. If their experience is good, the more likely they will return for boosters. If their experience with you is so phenomenal, they will tell their doctors and friends.
As you can imagine, if they didn’t get better or didn’t feel taken care of, the less likely they will return. Because we fully support our patients throughout their experience, we have continued to remain open while other clinics have come and gone. A truly healing and transformative experience where the patients feel safe, understood, and taken care of is good for business, but more importantly good for the patient!
Our ketamine clinic was slow in the beginning, but as we learned more about infusions, business, and marketing, we saw more and more patients come in.
Owning A Ketamine Clinic: Our experience
When we started out, our clinic volume was quite slow (i.e. 3-4 total infusions the first month). Sam continued working in the ER part-time (2-3 shifts per week) as the number of patients at the clinic slowly grew. It was reassuring to have that financial stability from the "day job" as we were starting out. As time progressed, we got returning patients. Plus, the medical community in our city got to know us and saw their patients improve with our treatments. Our customer base grew as we had returning patients and more referrals.
Sam gradually decreased the number of ER shifts and increased the number of ketamine clinic days. 3.5 years later, he quit the ER completely which was when clinical income was roughly replaced by the ketamine clinic.
By no means were we business-savvy from the beginning. We had a lot to learn about marketing, infusions, and customer service. As ketamine clinic owners, not only do you have to learn to be a good ketamine specialist, but a good entrepreneur and marketer as well. We didn’t just read all about ketamine, but expanded our horizons and read as many resources as we could about business.
To increase the chances of profitability for your clinic, it is important to be a well-rounded clinic owner. Every day becomes a learning experience for you when you begin this venture and step out of your comfort zone and into the world of business. Remember to enjoy the journey, take it all one step at a time, and treat everything as a learning experience!
We hope part 1 of our profitability series helps shed some light for you! In part two, we’ll explore the expenses side of your ketamine clinic and how it affects your clinic’s profitability.
Now that you’ve read Part 1, head over to Are Ketamine Clinics Profitable? Part 2: Exploring Expenses. Reading both blogs together will give you a much clearer picture as to what factors affect ketamine clinic profitability.
Are you ready to begin your new venture as a ketamine clinic owner? Join our email list and be notified about the next free webinar and open registration for Ketamine StartUp.
Related Questions
Start up costs depend on how much you are willing to do yourself versus outsource plus other factors like if you already have an established private practice, and your location. We believe it’s prudent to have $75-150K to start. We go in depth on this topic in our blog, How Much Money Do You Need To Start A Ketamine Clinic?
How do I calculate demand for ketamine infusions in my city?
The back of the envelope calculation is the following: Google the population in your area. Multiple that population by 20% (since 20% of the US population suffers from a mental health condition). Then you take that and multiply it by the percentage of those who can both afford ketamine infusions plus are willing to try it. Now this percentage is where you have to do some guessing. If you have access to data showing the percentage of those with a high disposable income that could give you a clue too. Explore this question more at our blog, Can My City's Population Support A Ketamine Clinic?
If you enjoyed this blog, check out these blogs too!
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