Paying Groomers – What is Fair?

How and what professional groomers get paid is always a hot topic. There are so many variables:

  • Hourly?
  • Commission?
  • Pay rates?

MoneyOver the years I’ve tested just about every possible combination of scenarios to try to determine what was fair, what worked, and what didn’t.

When I started my first business, I groomed in the vans right beside my mobile groomers. My team earned 50% commission of the grooming charges. We also had an extra “house call charge” for the front door service per stop (not per dog).

My mobile fleet grew from one van to six in about five years. Plus, I added a grooming salon to the mix. We were busy all the time. However, every once in a while, cash got tight.

Have you ever been there?

As we grew, the cash flow would have high and low swings. When the swing went up, it was fun, and I could reinvest in the company. I would buy another van and pay for continuing education for both myself and my team. We celebrated when we met sales quotas.

Occasionally, I would struggle to make a payment. If catching up got too deep and available cash got tight, I would grab a credit card. In those moments, I needed to keep the vans on the road and take care of expenses no matter how high the interest rates.

The busier we got, the less I paid attention to the finances. After all, we were all working and bringing in money. It was inconceivable to think we wouldn’t have enough money to pay the bills or commission.

Quote In A CircleBut then it happened.

A payroll check bounced. The lights got turned off. The phone service got shut off.

Each of these stressful, embarrassing, and terrifying moments are the hard lessons many business owners face.

Early in my career, I didn’t pay attention to the financial health of my business. It was a painful lesson I needed to learn the hard way. I was losing sleep over it and after more than one negative incident, I vowed never to let it happen again.

Detailed bookkeeping wasn’t my forte – I would rather have been grooming. However, I bit the bullet and invested in a bookkeeper. She was much wiser than I when it came to money matters. She made sense of the income and the expenses and I started paying attention to my cash flow.

We worked closely together and each month she would create a profit and loss statement for me. It would contain all the standard categories along with monthly and year-to-date figures. Plus, she added a column that tracked the percentage of expenses to sales.

The percentages were critical. No matter how rapidly we grew, I started to see trends in the percentages. It allowed me to easily track the fiscal health of my companies at a glance.

Early in my first mobile business, the only thing really saving the company was the house call charge on top of the grooming fee. Little did I realize how detrimental a 50% commission rate was to the health of a business. It’s very hard to run a profitable company when you pay out almost half of your grooming revenue.

It’s even more challenging if you had W-2 employees vs. independent contractors (but that’s a whole ‘nother blog!). In the state of Michigan, an estimated 13% was paid in payroll tax obligations for my staff based on their wages.

Look at the chart below. If you are a commissioned groomer/stylist, find your rate. Next, find your average price per dog. For example, if you earn a 50% commission rate and the average ticket price of the dog is $50, you would be earning $25 per dog.

CHART_1

Did you find your place on the chart?

Notice what happens to the earning potential when pets are priced higher, yet the commission rate is lower?

Where would you rather work – at a salon with lower-priced dogs but at the 50% rate or at a higher priced salon with a lower commission?

The commission rate isn’t the true barometer of your earning potential. The price per dog combined with the commission rate is what you need to look at. Even if a commission rate is 38% but the average ticket price is $70, you would be earning $1.60 MORE than the 50% commission rate at $50 average grooming price.

Don’t get hung up on the commission rate. Pay attention to the average price per pet COMBINED with a commission rate. Then, do the math. It might surprise you!

In the next set of charts, I want to demonstrate what happens to a business paying out a 50% commission rate to employees. In these examples, I have simplified salon expenses. Most salons will have a longer list of expenses. The examples show how the numbers would play out over the course of a year. As you look through the amounts, notice what happens.

A

I have used a 50% commission rate for salon generating $150,000 per year.

B

The salon is generating $210,000 annually while paying out a commission of 50% to the groomers.

C

The salon is still generating $150,000 per year but now the commission rate has fallen to 44%.

D

The grooming commission rate is 44% but the average ticket price increased per dog, earning the salon $210,000 annually.

In example A, the salon is clearing $5,910 for the entire year or less than $500 each month.

If you are a salon owner, I’m guessing you did not get into business to run a nonprofit company. In this scenario, that’s pretty much what’s happening. Remember, I simplified the outgoing costs of the businesses. Most salons will have more bills to pay than reflected in this example.

If you are an employee working at a salon paying 50%, you feel it every day. The lack of cash flow filters through. Chances are, the salon struggles to make ends meet. It has to cut corners. One financial hiccup can send it into a downward spiral.

The only way a 50% commission-based salon can truly make ends meet is if the salon owner is also one of the groomers. Another option is to have other streams of income other than just grooming.

Raising prices and dropping the commission rates is in the best interest of a business. It creates a cash flow buffer which takes the pressure off everything and everyone. It allows the business to thrive instead of struggle. It allows for higher-quality products, equipment, and education. These items make the workspace more enjoyable while minimizing burnout and maximizing quality.

Most salon owners and their employees are among the most passionate people I know. We’re hard workers and love pets. Owners and staff need to work together as a team. Everyone needs to understand what the numbers look like in order to have an enjoyable work environment.

My professional grooming department at Whiskers Resort & Pet Spa currently runs with a team of seven stylists and three grooming assistants. The team has both full- and part-time employees. The sliding-scale commission rates range from 38% – 44% for full grooms based on client satisfaction, rebooking, and financial quotas. Stylists earn lower commissions on simple bath and brush pets requiring less time. Stylists can bounce up and down the tier system based on the previous quarter’s performance. Grooming assistants are paid hourly based on experience and performance. On average, the grooming department’s commission payroll runs between 36% and 43% of gross sales. With lower commission rates, we can afford to pay the assistants and a portion of the customer service team that books all the grooming appointments.

Even with lower commissions, the average ticket price runs between $65 and $70 per dog. Based on personal motivation and experience, stylists groom an average six to 12 dogs a day. As a bonus, on a typical day, a stylist can also earn anywhere from $30 – $80 in tips on top of their commission rates. This department is flourishing, and the turnover is extremely low.

Salon owners, if you don’t have a firm handle on how the dollars stack up, I encourage you to track them and pay attention. If you don’t want to deal with it yourself (like me!), hire a bookkeeper. Then work closely with them and learn. They love to tinker with numbers the same way we like to tinker with dogs!

I encourage you to compare the charts. Check out the numbers. Think about how you fit within these examples. Then run your OWN numbers and see how you stack up. It does not matter whether you are the salon owner or a commissioned stylist. The numbers don’t lie and are the key to EVERYONE’S financial health and success.

Happy trimming!

Melissa

MVpaw_no_Inner_white

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The Importance of Rebooking Appointments

Rebooking clients is one of the easiest ways for groomers and pet stylists to boost their income. Encouraging clients to rebook on the day of their service will help keep a steady stream of pets coming into your salon.

cozy petClients that rebook before they leave return on a much more frequent basis than those who do not. Let’s face it – life gets busy. Personally, if I did not rebook my own hair appointment before I left the beauty salon, I’d be there a lot less frequently than every five or six weeks! Our pet owning clients are no different.

Many groomers don’t encourage their customers to rebook their pet’s next grooming. They think the client will come back when they are ready. While that may be true, it’s more likely the client will not return as often as they should.

As a professional, it is up to us to educate our clients how often they should return based on:

  • hygienic needs of the pet
  • coat condition
  • trim style
  • activity level
  • level of home maintenance between appointments

Most pets that are considered a part of the family require regular grooming. These owners share their lives, their homes, and sometimes even their beds with their four-legged family member. These pets benefit from weekly or bi-weekly bathing. Ideally, pets that require haircuts should be trimmed every 4 to 6 weeks. How often you handle hand stripped pets will vary based on the coat type and the technique used to strip out the dead coat. These dogs will need to be groomed weekly to a couple of times a year.

Pet professionals who understand the impact of rebooking realize that is not just a courtesy, it’s an important business building strategy. Educate your clients about the rebooking process. Encourage them to set aside time to keep their pet’s coat in peak condition.

Circle Steps

Here are 4 Tips to Ensure Your Clients are Rebooking with Every Visit

  1. Stress Maintaining a Schedule – As a professional pet stylist, it’s your job to educate your client. You know what it takes to keep their pet’s coat in peak condition. Find out how the client would ideally like their dog to look and learn their budget. Talk to them about how much at-home care they are willing to do between grooming appointments. Discuss the lifestyle of the pet. Once you know the answers to those questions, you can suggest the ideal number of weeks the pet should go between professional grooming appointments.
  2. Suggest Dates – Don’t just ask the client if they would like to rebook their next appointment. Suggest an ideal appointment date when you should see them again and have your calendar ready to set that appointment. If the client is hesitant, politely informing him that the best spots are already being filled can often help him make the decision to arrange for the appointment before he loses out to someone else.
  3. Offer an Incentive to Rebook – Small incentives can be a great way to keep clients coming back. Offer a small discount if they book their next visit within six weeks or less. Or offer them a free service with their pre-booked appointment. If they rebook weekly, bi-weekly, or every third week – offer them a special discounted rate to maintain the frequency of their visits. Do the math – you’ll probably be shocked at how steeply you can discount a weekly or bi-weekly client on their regular grooming price and still make more money on an annual basis.
  4. Train Your Staff – Rebooking is a courtesy to the client – and a benefit to you. Make sure your entire team understands the importance. The key to success is to ask EVERY client to rebook their next appointment before they leave.

Having an appointment book that is 50% to 70% pre-booked is like money in the bank. It’s a security system that allows you to breathe easily. It ensures you will not lose clients or revenue from light client bookings. It is one of the easiest ways to guarantee your income and keep your pet clients looking and feeling their best.

Happy trimming!

Melissa

MVpaw_no_Inner_whiteDo you agree with this post? How do you encourage your clients to stay on a regular schedule? Jump on the Learn2GroomDogs.com Facebook page and tell us why or why not.

 

What Does Your Future Look Like?

“The success you have tomorrow is predicated on the work you do today.”
~ Darren Hardy

I saw this quote recently and it really got me thinking.

Are you struggling or thriving? Whatever it is, it stems from things you did yesterday. Last week. Last month. Last year.

Everything you do is a set-up for the future. Your health. Your relationships. Your job. Your business. This single thought is essential to everything we do.

Do you:

  • Sit on your duff and eat crappy food? You will suffer physically down the road – maybe not tomorrow but it will catch up to you.
  • Fail to put positive energy into your relationships with people or pets? You’ll end up with uncontrollable children, empty friendships, and untrained pets.
  • Give your job less than 100%? There is a good chance you could be replaced by someone who will make the commitment to putting in the effort.
  • Pay poor attention to satisfying your clients? Clients will not return, and you won’t have a business to support you, your family, or your staff.

What you do today totally impacts your future.

So how does this play out in the grooming world? What can you do today to ensure you will thrive tomorrow?
 
Here are 5 areas that can really influence your overall success.

The Amount of Knowledge You Apply

The more you know about your field, the more confident you will be. That confidence transfers in many ways to grooming table. Plus, it will play through in a positive way to your clients. You will be able to communicate effectively with them. You’ll instantly know how to groom any breed of dog, in any condition, with any temperament. The more knowledge you have, the easier – and more enjoyable – your job will become every day.

What are 3 things you can you do today to help your future?

  • Study official breed standards
  • Watch videos by top pet stylists
  • Read books on canine anatomy and structure

The Quality of Your Work

High-quality work always brings customers back. It creates client loyalty and positive relationships. For most clients, their pets are much like their children. They love them and want to be proud of them. If you want to win the hearts – and the pocketbooks – of your clients, make sure the work at the other end of the leash is top-notch.

What are 3 things you can you do today to help your future?

  • Make sure your dogs are SQUEAKY clean
  • Focus on getting the perfect drying technique mastered for each coat type
  • Go over your work one more time – look for rough or uneven spots

Winning at Customer Service

As a professional pet groomer or stylist, you are a problem solver. Clients bring you their pets with a host of problems. Most are overgrown, dirty, or shedding. You need to uncover what their underlying needs are and present solutions to solve the problem. As you’re solving the issue, do it in a way that creates a memorable experience for the customer. It’s important to do more than just meet their expectations and satisfy their needs. Do it in a way that excites and delights them every step of the way. A smile will go a long way but there is much more to the customer service game. You need to look at every interaction with the client and figure out how to make it extremely positive.

What are just 3 things you can you do today to help your future?

  • Take the time to listen to your client and offer viable, attractive solutions to their pet care needs
  • Make it a goal to earn a smile from every client
  • Always be honest and upfront with all clients

Presenting Consistent Marketing

Effective marketing creates a desirable experience that connects with prospective customers and clients. To take it even further, it’s about creating clients who want to share their experience with others. Marketing is more than just your business card or a paid ad. It’s about how your phones are answered. It’s interaction with clients and their pets. It’s the impression you, your staff, and your salon make when your client walks through your door. It’s the images and messages you post on social media. It’s your printed material. Your advertisements. Everything you do to entice pet owners to use your service.

What are just 3 things you can you do today to help your future?

  • Take the time to groom yourself – always present a pulled together, neat, clean, and polished image
  • Smile when you answer the phone – it transmits instantly to the other end of the line
  • Make sure your salon is fresh smelling and appealing

Being Financially Savvy

No one starts a grooming business to give away their services or lose money. That’s not what going into business is all about. Whether you are a solo stylist, an employee, or a business owner, you need to pay attention to your money. Ideally, you need to charge enough for your services so that you can pay yourself a fair wage, pay all of your bills, pay your staff (if you have them), pay your taxes, and still have a little left over for emergencies. If you don’t pay attention to the details of how money flows into your business and how it goes out, you could get into trouble quickly. You have a responsibility to yourself and to your team to be financially knowledgeable.

What are just 3 things you can you do today to help your future?

  • Set a budget for yourself or your salon and then track your progress regularly
  • Create a daily sales goal
  • Keep accurate financial records with the aid of a computer, bookkeeper, or accountant

This is just the tip of the iceberg. There are countless actions you can focus on today to positively impact your future. Hopefully the ideas in these sections will get your juices flowing. There is always SOMETHING you can do today to improve your tomorrow!

Everybody wants to be successful. The bottom line is that success is hard work. You have to put in the effort. You have to put in the time. You have to pay attention to the details. Sure, today might be difficult, but think about the long-term benefits? Will your efforts today help you tomorrow? What about next week? Next month? Or even next year? There are many areas you can focus on to improve tomorrow.

Always remember, to be successful – to thrive – you need to put forth effort today so that your future will be bright.

Happy trimming !

~Melissa

Paying Pet Groomers & Stylists – How to Create a Payroll System That Is Fair to Everyone in Your Grooming Business

Are you giving away your business by paying high commission fees to your groomers and pet stylists?

Been there. Done that. It’s not fun. In fact, it’s downright frustrating!

Years ago I was at the customary 50/50 split with my mobile fleet groomers and stylists. I groomed right beside my entire team in a van. I worked for the same wages, 50% commission of the grooming, just like everyone else. We did charge a separate “house call” charge per stop but that went to the company, not to the groomer.

I had six vans on the road. We were busy. Really busy!

Then my hands started to give me issues. I was forced to stop grooming for a while as they healed. As the business owner. I thought it would be easy to continue to pull a paycheck even though I wasn’t grooming. That’s when I learned how WRONG I was…

After payroll was met, bills paid, and taxes covered, we were only clearing about 1-2%. I didn’t even have an emergency fund if anything went wrong… anything from new tires to new transmissions, or a brake job on any of the vans. If we ran into any bumps in the road, I was close to being sunk. Was there any hope of me pulling a “salary” as the owner? Not a chance. Once we juggled all the bills, there just wasn’t any money left over.

During that time period, I learned quickly how to read a financial statement. Before then, I was racing so hard grooming, maintaining vans, and guiding my staff on proper pet grooming, I didn’t find the time to read my monthly Profit & Loss Statement (or even understand it!). I quickly learned how important that knowledge was! Bottom line: my fleet of vans and groomers provided amazing grooming services. My entire team was earning nice wages. But all I was doing was creating a job for myself… plus I was producing a lot of stress and aggravation for myself.

Sound familiar?

Ultimately, it was easier for me to shut down my mobile business so I could focus on other industry opportunities. As a business owner, you have a right to earn more than your staff. You’re carrying the weight of the business on your shoulders. All the responsibility. You assume all of the risk. You bear the headaches and the frustrations. Being able to make a fair profit is a part of any business owners’ dream.

My guess is many of you are struggling with a similar situation. Guess what? There is a solution to this problem – and we’ll get to that in a minute.

Fast forward to 2007. I opened Whiskers Resort & Pet Spa. I was determined to do a better job with the grooming department there than I had done years earlier with my mobile fleet. This time I opted to go the hourly route for my grooming team. On paper, the numbers worked. In reality, it was a mental and moral nightmare. Holding artistic pet stylists accountable was like wrestling a greased pig. It just wasn’t working! EVERYONE complained about EVERYTHING.

If this grooming department was to survive and thrive, I had to figure out a different way to pay my grooming team.

I looked to other industries to get my inspiration. The beauty industry held the key.

The system I chose automatically sets up ways to promote, reward, and motivate our team. It uses a combination of commission based earning along with hourly wages for bathers. Groomers and stylists are paid commissions on full groom pets ranging from 38% to 48% based on their ability to meet quotas. We have six Tiers altogether with 2% increment jumps between Tiers. Bathers are paid hourly between $8.50 and $12.00 per hour.

Groomers and stylists have daily, monthly, and quarterly goal requirements. We track and measure the number of:

  • New clients
  • Repeat clients
  • Upsells
  • Pre-booked appointments
  • Pets groomed per day
  • Sales revenue

Groomers and stylists can Tier jump if they maintain the goals and targets consistently for three months. They can also be demoted a Tier if they do not maintain their quotas. Plus, for any stylist to go beyond a Tier 3 on our team, they need to be a Certified Master Groomer by one of the three voluntary testing organizations in the United States:

Becoming a Certified Feline Groomer with the National Cat Groomers Institute of America (NCGIA) or any of the first aid organizations is a bonus.

Our team is also paid a 10% commission for add-on services like teeth brushing and spa upgrades.

All of our groomers and stylists can request a bather to assist them. However, if they choose to have an assistant bathe and prep their dogs, they pay half of their hourly wages. This keeps EVERYONE on their toes and accountable.

In order for the system to work well, the secret is not in the commission levels. It’s in the average price per pet. At Whiskers Pet Spa, the average ticket price per groomed pet runs between $65 and $70.

We have been working with the system for over five years. Along the way we have made modifications and adjustments to meet our needs. It’s been working brilliantly.

I’m a strong advocate of hiring employees NOT subcontractors or renting table space. I like the control it gives and benefits I can offer to my staff. I never have to worry if the government is going to come beat down my door for improper hiring practices. I sleep easier at night. I have no problem paying my company’s taxes. It’s a privilege to live in this country – to pay my fair share of the taxes.

However, if you are going to play Uncle Sam’s game, you need to play by the rules. You are going to have to come up with between 13% and 15% extra to cover payroll taxes. Those obligations are:

  • Social Security
  • Medicare
  • Unemployment Taxes
  • Workers Compensation

If you are paying 50% or 60% commission rates to your groomers – you need to tack on the payroll taxes, too. So your commissions are more like 63% – 75%. Ouch!! That just doesn’t leave you much room to run your business OR turn a profit.

If you are struggling with your payroll or running a profitable grooming business, I urge you to review your financial statements. If you struggle with understanding them, get help. The financial numbers do not lie. They are the barometer of your business.

Remember, you didn’t go into business to lose money. You have every right to earn a fair living – just as your staff has the right to fair wages.

Most successful pet grooming businesses charge a higher price for their services. In turn, they can reduce the commission levels while still allowing their groomers and stylist the opportunity to earn a healthy wage.

Last year our full-time stylists annually earned between $28,000 and $54,000 including vacation time. And that doesn’t even include tips! Rarely do we have anyone complaining about too much work or refusing to do more dogs when we are busy.

This system has really helped us promote, reward, and motivate our grooming department almost automatically. Our groomers earn a healthy wage. We can easily pay all our bills. The department is profitable. We all sleep well at night.

To learn more about how to run the financial side of your business, check out two of our videos on Learn2GroomDogs.com. You’ll see me having discussions with my accountant and financial guru in ways that are helpful and easy to understand. Click here!

What do you think? How is your structure different? Jump over to the Learn2GroomDogs Facebook page and tell us about it.

Happy trimming,

~Melissa