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

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Are You Taking Care of Your Best Customers?

CSRIt’s hard to believe, but the major holidays are just around the corner. What does your appointment book look like? Are you booked out until after the holidays?

If you are, CONGRATULATIONS!  Give yourself a huge pat on the back. Being proactive with your schedule feels great, doesn’t it?

If you’re still trying to fill holes in your schedule, there’s a question I’d like to ask.

Do you know who your most valuable clients are? Whether you are a solo flyer or work with a team, you can benefit from knowing what type of client brings in the most revenue.

When it comes to the busy holiday season, knowing how to prioritize appointments can be very helpful. As much as we would like to get to every client, there are only so many hours in a day. It can be hard to decide who gets appointments and who gets turned away.

This chart might help you determine who your most valuable clients are. Typically, it’s not the client paying the most money per groom.

tableLook at the revenue generation on the one, two, and three-week clients. Even with heavily reduced grooming fees, it’s amazing how $20 can add up week after week!

I’m not saying this is what you should be charging for your dogs. I’m just giving you an example. You can see how the numbers works out. Test the numbers using your own pricing averages.

Quote In A CircleOne of my companies automatically gives a five-dollar discount for clients that book every 4 to 6 weeks. Once they get under three weeks, the discount is even bigger. This is great for keeping the books full – and the dogs stay in good condition all year long.

It’s pretty amazing once you see the math, right? Hopefully, it gives you clarity on who should get those premier appointments spots.

Let me ask you this: is it fair to either the client – or to you – to take an eight-week client over someone you see every four weeks? What about a four-week client over a weekly client? Ultimately, the choice is yours, but I know who I’d pick!

When booking appointments, start with the clients you see most often. Reward their loyalty with the best appointment slots.

Take care of your weekly and biweekly clients first. Then move into your three-week clients. If they don’t have appointments, reach out to them in whatever method works best for your business – call, text, or email. With any luck, the last two appointment days before the major holiday(s) will filled with your regulars. Those days will be a breeze for you.

Once those clients are taken care of, start booking your four-week clients and continue down the line. By the time you’re done, you’ll know you’ve taken care of your most valuable clients in a way that is both systematic and fair. If you still have slots available, go ahead and fill them in as the phone rings.

If you are using this system to book six month to a year out, make sure you communicate with your clients. They should know when you’re unavailable due to vacations, family obligations, educational events, or peak grooming times. Helpfully offer them alternatives so their pets stay in excellent condition. You may need to be more flexible on times or even offer to have a substitute stylist when you are not available.

The holidays are always a blur! If you’re overworked, underappreciated, and totally worn out for your close friends and family you won’t enjoy the holidays. You need to make the time for yourself and those you love. I can still hear the disappointment in my mother’s voice when I was so exhausted from grooming, I could not make it to our traditional Christmas Eve family gathering.

This prioritizing system helped immensely. Being a little more organized and proactive meant I could take care of my best clients and still have the energy to enjoy the holidays with my family.

Don’t limit yourself – you can use the system to fill your books all year round. Ultimately, it depends on how in demand you are and how busy your schedule is.

Whatever way you implement the system, it’s a great way to take care of your best customers. Take care of them and they’ll take care of you. Most importantly, you’ll both be taking the best care of the pets you love.

Happy trimming!

Melissa

MVpaw_no_Inner_white

Who gets YOUR premier time slots when your availability is limited? Jump on the Learn2GroomDogs.com Facebook page and tell us.

What Keeps Clients Coming Back?

When a student graduates from The Paragon School of Pet Grooming, I love to hear about their success stories down the road. They might work for someone else or work for themselves. They love what they’re doing and their careers are thriving. But what makes those graduates successful?

For many of them, it might not be what you think.

We all have good friends. When you think about those friends, what traits draw you to them?

Quote In A CircleMy good friends are honest, dependable, self-confident, empathetic, and are good listeners. They have integrity. I enjoy being around them.

Bottom line, I trust them.

Not every groomer needs to be an all-star stylist to succeed. However, having repeat clientele is the lifeblood of any business. It does not matter if you are a solo groomer or work with a team of pet stylists with a support staff. Getting customers to come back on a regular basis pays the bills.

We are not in the business of washing and styling pets. We are in the trust business. For many of the clients that we deal with on a regular basis, their pets are an extension of their family.

I’m not a parent but if I were, I would never leave my child anywhere I felt apprehensive about the facility, the people, or about any part of the service. Most of our clients feel the same way about their fur babies. If you are going to be successful, your clients need to trust you.

To be a successful pet groomer or stylist, you need to have repeat clientele. Repeat clients are attracted to the same types of characteristics as your good friends. When you get others to trust you, it’s easier to grow your clientele and/or your business. It allows you to give all your clients and the pets exceptional service.

lIST

Unfortunately, trust is fragile. If you lose it, it can be very difficult, if not impossible, to restore it.

You can’t fake a genuine relationship built on trust. The same characteristics that build a good friendship will build strong relationships with your clients and their pets.

Trust can take a long time to build. Yet it can take only a moment to weaken or disappear because of one senseless act. Without trust, you don’t have a business – or a job.

Trust keeps clients coming back. Repeat clients keep your business healthy. Take the time to build trust and strengthen relationships with your customers – you’ll be amazed at the result!

Happy trimming!

Melissa

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Thank You!

It’s an amazing honor to receive the Barkleigh Honors Award for Website of the Year. We are thankful beyond words to be nominated among such devoted and talented people. Thank you to Barkleigh for your recognition and for the tireless work you do every day to improve our industry for all groomers and the pets entrusted to us.

team photoReceiving this award is both humbling and inspiring. We created Learn2GroomDogs.com to help people who love working with pets become the groomers and stylists they’ve always wanted to be. We’re so grateful to be part of an industry that values education as well as professional and personal growth. Thanks to our subscribers, we’re more excited and motivated than ever to keep bringing you the tools and materials you need to make your lives better and improve the safety and well-being of pets everywhere.

This was so much more than the four of us could achieve alone. Helping people is our passion and you have always been the driving force behind everything we do.

Thank you to our dedicated team, our amazing Training Partners, and our subscribers for your feedback, insight, and support. This award belongs to all of you, as well. We wouldn’t be here if it weren’t for all of you. Thank you for being part of our family.