Updated: Nov 11, 2019
There is a right way to pay your groomers. I'll say that again - there is a right (and wrong) way to pay your groomers. As an industry, we make this incredibly complicated and it is completely unnecessary. To achieve this payroll bliss, you will have to be a little creative to make it work in your salons, but it is possible and I will show you how.
Before the hate starts flying, I want everyone - salon owners AND employees - to consider the following.....HOW'S IT CURRENTLY WORKING OUT FOR YOU?
Do you have health benefits?
Doing more dogs per day than you really want to?
Are you always broke?
Salon owners, are you earning less than your team?
Employees, are you worried your checks will bounce?
Does the staff fight over the good tippers?
Do more accidents and injuries happen?
Are the other things important to running a business getting done consistently like marketing, deep cleaning, and office work?
To the unicorn shops that do 5 dogs a day each with full benefits, paid vacations, a cleaning crew and a social media person - I want to know your secret! For the rest of us trying to make ends meet, be fair to our staff and still earn a decent living - there is hope. But it is going to take time, effort and cooperation from your team.
Know Your Numbers
Do the following Google search: "what is a healthy payroll percentage?" Page after page you will see 15-30%, 20-35%, 18-40%. These numbers are based off of GROSS REVENUE. Your gross revenue is how much money you earn before everything is taken out. Groom 100 dogs this week at $60 per client, that is a gross revenue of $6,000 for the week.
Do not be confused in your search when you see payroll is 50% of operating expenses. Many groomers have argued this with me stating, "See, it shows 50%!" The key phrase that was left out is OPERATING EXPENSES. That mean, if my bills include rent, utilities, supplies, payroll and taxes - payroll is 50% of that. So, if my expenses are $10,000 each month, payroll is $5,000 of that.
There is a HUGE difference in what you earn and what you owe. Do not mistake the two when you are figuring out your payroll cost.
Time to calculate your payroll. I like to do it a few ways:
All employees, excluding me (owner)
Total payroll, owner included
I break it down this way for a few reasons. First, I like to see how every person is contributing. Second, by excluding myself, I get an idea of what I am paying my team to run the business without me. Finally, I believe as an owner, we get paid last.
Select an employee (Pet Stylist A) and add up all the money (excluding tips) that he brought in (gross revenue) for a given time period. If you have a yearly number, use that. If you have a few months, that is fine too. (i.e. $99,000)
Calculate Pet Stylist A's total pay for the same period you calculated his gross revenue. Make sure it is his TOTAL pay and not NET pay. The total is what he truly earned before Uncle Sam took his portion of it. (i.e. $46,000)
Divide the total pay by the gross revenue ($46,000 / $99,000 = .4646)
Multiple that by 100 = 46%
Repeat this step three more times for:
each individual employee (Pet Stylist B, Bather A, etc)
total of all employees, excluding the owners salary
total shop payroll numbers, yourself included
Analyze the numbers. How far off from 30% are you? Do you want to throw up yet? Keep in mind, if you are doing things legally and your staff is W-2, technically speaking, this number isn't exactly right. Tack on another 10% because as a business, you really are paying much more per employee between your company's tax burden and workman's comp. Something to keep in the back of your mind moving forward.
Calculate the average price per dog. You will need this number later so might as well do it now while you are looking at your math. To figure this out, divide the gross revenue by the number of pets you serviced. For example, 500 dogs came in March and your sales were $26,000. ($26,000 / 500 = $52/per pet). If you have yearly numbers, use this.
Also, keep in mind, if you have groomers that do not work on bath dogs, separate those numbers. Personally, I like to know 3 things: 1) my average groom price, 2) average bath price and 3) my overall sales numbers (which include nail trims, self service, daycare, retail sales, up-selling, etc).
OK - time to get preachy!
Both employees and salon owners must learn to agree a business operating with a payroll higher than 40% is not sustainable. This business will always be cash poor, struggling and
stressed. In this underpaid, overworked environment, already in an industry prone to injuries, this is where serious accidents, (some leading to accidental death) happen. In addition, haircuts get sloppier, customer service gets worse and the pet grooming industry as a whole, develops a bad name.
We need to agree that our payroll system is broken.
At this point, anyone reading this who wants to spout off that they will not work for less than 60%, go ahead and leave. There is no need for you to read any further. I recommend opening your own shop and not hiring anyone else. Only then, maybe, you will get your 60%. This article is not for you and I will not change your mind. This plea is for the person that cares about our industry, not just their own personal gains.
It is my belief that the minimum salary for a pet stylist should be $65,000. I also believe, that if you are good, $85,000 should be the norm! Business owners should be making no less than $100,000. I think that Chihuahua's should start at $50 and Great Pyrenees should be over $300.
Wanna know why I say this? Because of supply and demand. The demand of pet owners needing professional grooming far exceeds the numbers of groomers out there. Look at it this way, if all car companies stopped making cars (supply ceased) but the demand for cars is still super high, wouldn't the price per car go up significantly because there were less cars out there?
Groomers are a dying breed.
Ask any shop owner how hard it is to find a groomer. There are none out there. Less people are coming into the industry. The supply is dwindling. But more and more pet parents are getting groom-able dogs. The demand has risen.
Our jobs are tough and pet owners do not do their part at home to maintain their beloved fur baby. Have any of your ever gone to your hairdresser without brushing your hair for 9 months?
We are now fighting a new type of 'breed' of Doodling and we don't have the tools to adequately do their haircuts in an appropriate amount of time.
We are taking more dogs per day to compensate for the huge demand for our services and most salon owners will agree, none of that money is going back into the business because it is all going to payroll. Somethings gotta give.
Business owners - get your numbers lined up to present to their team. Do the calculations above and sit down with everyone to show the math. Numbers don't lie.
Ask each Pet Stylists to figure out what they want their pay to be. This is a great chance to work together! If Pet Stylist A says, "I want 50%"....what the heck does that mean? You need actual numbers. A better answer is "I need $35,000 a year to pay my bills, have some savings and play money." (Oh yeah, make sure they are not factoring in tips. That is a generous addition to our salaries but also one that is unpredictable and not guaranteed. And it is not covered by the business so keep tip numbers out of this).
To determine what the gross revenue needs to be per person, divide their salary requirements by 30%. For example $35,000 / 30% = $116,667 gross revenue
Use the average price per dog (calculated above) to determine how many pets this stylist needs to work on to achieve their salary goals. Please note: DO NOT GUESS! I have seen many shop owners claim that their average price is $72 only to find out it is closer to $48 because they forget that they have numerous mini grooms or $15 bath specials that cancel out the $130 Standard Poodles they do. This number must be accurate in order to do the next step.
Divide the projected gross revenue per person by the average price per pet. $116,667 / $52 = 2,244 pets per year. Divide this by 50 weeks (because we all need 2 weeks for vacation). 2,244 / 50 = 45 dogs per week. If they work 5 days a week, that is 9 dogs a day.
Was this number realistic? Was it so stupid high like 32 dogs a day? Or was it within reason, like 1 or 2 dogs off. This is an excellent opportunity for your Stylist to see what they need to do to earn the salary they desire.
At this point, you may realize that you have someone on your team that is either unreasonable or grossly overpaid. Both of you need to work together to come up with a resolution. Maybe they have to start selling the heck out of your deshed treatments? Maybe, to keep this salary, they have to stay on top of your Instagram account and record how many new clients they bring in each week? Or maybe, it might not work out. Their salary is something you cannot afford even with all the additional sales. Be OK with this. Work out an exit strategy and part on good terms.
Salon owners - once you have your teams desired incomes, plus your own, next step is to determine as a business, what you need to do to achieve this at a payroll around 30%.
My guess is that these numbers seem so unbelievable that you and your staff are at a loss as to what to do next. I hope my rant above inspired you to see where the problem lies. It is not in your employees saying they want $65,000 a year,
It's our pricing.
In order for us to get fairly compensated for truly back-breaking work, we need to make money. A LOT more money. The average price per dog needs to be much, much higher in order for us to do a respectable number of dogs per day, with no rushing, no assembly line and truly a one-on-one experience for your furry clients.
I would agree though, we can't collectively go from a $49 Pomeranian to $150. This will take time. But there are other things we can do in the meantime, where your staff does not see a pay cut, but as a salon, you are dropping the payroll percentage 1-2% each year.
Change to hourly pay. Get off the commission schedule altogether. This breeds a competitive, selfish environment in your salons. Some states, like California, prohibit commissioned employees anyways. Drop it now. To switch over to hourly, base it on your employees desired salary (or one you both agree upon to be reasonable) and divide that number by 2,080 hours. That is based on a 40 hour work week, 52 weeks a year. For example, $35,000 / 2,080 = $16.83/hour
Create additional job duties that each team member is responsible for. Most groomers are not grooming the full 8 hours in a day. The extra time should be spent on income generating tasks such as social media posts, newsletters or passing out business cards at vets. Other job duties can be to check shot records, file client paperwork or send thank you cards to new customers. Gone are the days were a Pet Stylist grooms, cleans their station and leaves at 2:30pm. There is too much to do and if they want more money - this is what is required of them.
Raise prices and sell a lot more. A simple $5 price increase may not be the only thing you need to do here. If you fall into the camp of needing a huge boost of revenue, considering reading our eBook, Limited Funds. I give tons of tips on price increases, how to boost your revenues significantly and what myself and other salons do that work. Not trying to sell you something here, but that book is literally 137 pages of making a lot more money and I just cannot go into in this one paragraph.
You need to raise the average price per dog up a lot. If you can get this number much higher, you can groom less pets per day.
Less pets + more money =
a happy, positive environment that is welcoming, safe, super clean and fun every day
Make this a 2, 5, 7 or 10 year plan! Don't stress out and think this has to be done overnight. If your payroll is say, 46%, that is 16% higher than where you need to be. That's OK. Commit to dropping it 4% a year for 4 years or 2 % over 8 years. Whatever you are comfortable with and can achieve. As an industry, it took 100 years to get into this mess, it will not be rectified by next year. Have a long-term plan to turn things around in your spa.
Start by a commitment to raise prices each year. No client gets a pass! Since 2009, inflation in America has ranged from .7% to 3%. That directly effects our cost of living. In plain English, that means both personally, and professionally ALL your bills go up. From the big ones like your gas bill to the small stuff like the pack of gum in your pocket, it is a fact. Each year, they got more expensive.
Averaging out the 10 years, our expenses have gone up 1.9% a year. If you are not raising prices, each year, you and your company are eating a loss of nearly 2% per year.
To be a successful business, the price increase must double the cost of living.
Therefore, you should be raising prices approximately 4%. That $49 Pomeranian will go up $1.96 this year.
You can see, if you switch to an hourly pay scale that your staff is happy about AND you raise your prices 4%, you are already on your way to that elusive 30% payroll! It can be done! Add some fun up-selling, create an additional revenue stream such as a small daycare or photo shoot, and you can create an even larger gross revenue, for the same payroll cost. Everyone is happy.
One Final Thought
I am not trying to ruffle anyone's feathers, but the way the industry has transformed over the past 50 years does justify a huge shift in how we run things.
Back in the 1960's, Pet Stylists groomed Cockers, Shih Tzu's, Yorkies and Poodles. A few bigger breeds were peppered in there, but overall, that is what they did. Prices were cheap and dogs were maintained at home.
Fast forward to the eighties and nineties with the designer dog phenomenon - pet owners desired more from their groomers. But we had that hobby-like mentality and no one caught on that the demand started to rise, pet owners wanted more and yet, collectively, we stayed the same regarding price structure. And the dogs got harder to groom, which required more time per pet. More work + same income = doing more dogs per day. See where this is going?
Now we have this doodle explosion and tons of large, hairy breeds filling the salons. Many business owners are trying their best to stay competitive with the 'hobby groomers' and it just isn't working.
Groomers are exhausted at the end of each day. We are fighting with pet's that, quite frankly, many of these owners should not have! People have busy lives and yet they continue to get these breeds that require a ton of work on the pet parents part, however they do not have the time or the knowledge how to maintain them at home.
And it is being taken out on the pet grooming industry.
Seriously, enough is enough. Groomers need to push back and charge more. Our time is worth much more. I love this industry and yet my heart hurts when I see where we are going.
Look at the faces of your groomers. They busted their butts for 2 hours and 45 mins on a severely matted doodle that was biting them and jumped out of the tub twice....for $75? Now look at what they made. Even if they still are at 50% commission, that is only $37.50. But wait - how much was that for the TIME they spent? That's $13.64 an hour. And what did your salon make off of that? I'm guessing $5 total? As an salon owner, did you even make $1? Was all of that headache worth $1????
And we all wonder why we can't find any good groomers any more......
I would like to know your thoughts. Please keep comments respectful. Discussing pay is a highly volatile topic and when people get heated, it is hard to control emotions. Understand, I am pushing for an industry where we make tons of money for less work. I want to be more like Electricians and Plumbers, not Hair Stylists (no disrespect!) If we all work together, we can accomplish this. If you have other suggestions, please share them with everyone! And if you are the unicorn shop that has health benefits and 5 dogs a day....please guide us to the promise land!