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Note to our readers: The following article is a modified excerpt from the original complete article published in The Madson Pet Reporter (Spring 1997 Edition). The original edition is approximately 25 pages including several important Charts truly worth their weight in gold. It is important for you to know the article is illustrated with the following Worksheets that we recommend every pet grooming business owner use:
Chart 1 "Commission" or
"Percentage" Daily Wage Calculation Basis (No Bathing Department).
Today many salons hire full-charge groomers to do pets from start to finish. In Chart 5 we demonstrate a busy salon using 4 such full-charge groomers paying them 50% commissions. We take the same salon converted to EQUAL RATES OF PAY - BUT SALARY and gross payroll is reduced 14%! In a year that's usually $10,000 or more in an owner's pocket, YET, no full-charge groomers suffered pay cuts, or had to increase their productivity even. In fact, while most pet grooming business owners think their employees will FEAR the change, the author consultant developing this system says over 98% of employees and owners never go back to the old system. The Webmaster for PetGroomer.com and other consultants for Find A Groomer, Inc., the author's company, have helped hundreds to switch from commissions to Madson Team Trimming and hourly/salary wages. You can get more information from Find A Groomer, Inc.
Nearly all pet grooming salons paying by commission pay fifty to sixty percent of the service fee. After deducting the cost of taxes and overhead, the owner has as little as twenty percent of the original fee left. For today's business owner, pet grooming is constricted by high operating costs worsened by inflation. To stay profitable the pet grooming business owner must continually seek ways to trim unwarranted expenses.
Only by working out the actual costs for your present operation, and then projecting the costs should you adopt salaries, and Madson's Team Trimming and Team Bathing Operations, can you make important financial decisions that affect your business. However, there are hundreds of pet grooming business owners that have already made the switch to salary based wages and team operations. For some it has been relatively easy, and for others a challenge.
At first, most readers have several misconceptions about 1) converting to salaries and 2) team operations. Both inextricably work best together, but their joint use is not required to boost profitability. From our experience, these are the most common misconceptions. Also, most pet grooming business owners believe that their employees will quit when asked to accept non-commission based wages or to participate in Madson Team Trimming Operations. When done right, it is just the opposite actually. It does require advance planning though using the worksheets and information provided by Madson in The Madson Pet Reporter (Spring 1997 issue).
#1 Converting from commission based wages to salary based wages increases owner profit by reducing employee wage rates.
We begin planning conversions from commission to salary by using Chart 1, a special Worksheet developed by Find A Groomer, Inc. When completed, it portrays the financial picture for a pet grooming business paying by commission, typically 50% to 55% of the service fee. Using Chart 1, we can take a daily snapshot of the business. Assume there are 12 pets requiring a complete trim and bath, and 4 bath only pets. Two groomers divide the work equally. They complete their assignments from start to finish in eight hours, and there is no support from a bathing department. For the sake of comparison, let's assume the pet grooming service prices are the same for all pets depending upon services ordered; $28 for a complete bath and trim and $20 for a bath only. After a few calculations we discover the business earns $416.00 gross income for the day. The owner pays 50% commission wages totaling $208.00 for the two pet groomers. The owner retains $208.00 gross profit from services. Of course, the owner has yet to pay additional overhead expenses including employer contributions.
After completing Chart 1, we use Chart 2, another Madson worksheet. It portrays the same business paying by salary, and not commission. Each employee does the same assignments, and works the same hours and service orders and fees are the same too. The result is that the business earns the same $416.00 gross revenue, and pays the two pet groomers $208.00 in wages. Again, the owner again retains $208.00 for the day and must still pay the same additional overhead.
So what is the benefit of paying salaries then? Conversion to salaries is the most important and first stepping stone you take to begin a financial path that boost your profitability. Isn't it great to know that conversion to salaries doesn't have to cause the often dreaded reaction of employees? In fact, the fears of employees are then easily dispelled when they understand that conversions to salaries is not synonymous with pay cuts.
Now you are ready for the second stepping stone, and that is boosting the gross profit of the business by improving the productivity of salaried employees. Imagine, you find a way for the same 2 employees in Charts 1 and 2 to more efficiently work together, perhaps as a team, to complete only 1 extra complete trim and bath pet each day. The result is another $28.00 a day without additional labor expense. When the business is open 260 days a year, gross revenue would soar by $7,280 a year. Since the work was completed in the same hours using productive Team Trimming or Team Bathing Operations, the entire $7,280 is gross profit for the owner. Of course, now the owner can afford to boost morale with a pay raise for the employees. Everyone as a team benefits.
Of course, you may be saying why would the employees increase their productivity to make more profit for the owner, and hope for a pay raise? I would say to you, "Who is running your business?" and "If there is a more productive way of grooming pets as a team, who are they to usurp team values?" In fact, I would say the problem lies more in the fearful manager and owner than in the employees not made aware of team operations and benefits. Teamwork has come to pervade many industries, for example, the auto industry. Your skills to coach a team must be developed if you are to develop a team environment, and your employees must know that you have the wherewithal to share some of your gain with them. The topic of teamwork is a lengthy one that cannot be well served here, but we have done it in our and other businesses for decades. Pet grooming is ideal for team operations, as is any other labor intensive trade.
If this topic has it a chord of curiosity and intent to change in you, I strongly suggest you read the original and complete version of this article. We have salaries and team operations "down like a science." Too often pet grooming business owners have come to us with stories of their pet groomer employees commandeering appointment books, clients and other poor practices that weaken the leadership of owners. Perhaps we see here clear evidence of why the pet grooming industry has been long considered as generally unprofitable, at least stereotypically.
We regularly counsel our management consultation clients converting from commission to salaries to set reasonable goals for increased productivity for their now salaried pet groomers. One pet per day between one or two pet grooms is fine. It may take some time, and it may take an investment in providing your pet groomer employees with enhanced skills training such as "speed grooming" tips or "commercial" grooming techniques, and yet the styling is just as exquisite. Isn't it worth the investment if the training results in increased productivity and profitability, and enables the owner and team leader to thereafter offer a pay raise? Of course it is. Provide education for your employees is commonly accepted as a business expense for tax purposes, and your employees are likely to become more team-like seeing that you are paying for their education. Check with your tax counselor on the deductibility of education expenses as needed.
At this point, it's a good time to give you some advice on a more wise method of announcing what may seem a radical change to your employees. Some of our consultation clients come to us to strategize a plan in confidence long before they even let a hint reach the employees that change is around the corner. That's wise. Others come to us angry at the employees, ready to strike back with change. That's unnecessary even when they accurately described the horror stories of employee problems. The most common mistake made when converting to salaries is to announce before you are ready to present the idea in a professional staff meeting backed with group discussion and supported with written information too. To mention it early, perhaps as an aside, creates rumors, gossip and suspicion between you and the employees. It's unnecessary trouble. Your presentation of this major change must be done very well, and as a group discussion with support materials such as the Madson worksheets. As we have already seen, converting to salaries doesn't involve pay cuts, so really the employees never had to fear anything, but perhaps the actions of their employer. It must be done for the benefit of the team, and not just you. It's not uncommon for any employer to have troublesome employees at one time or another, and they are lessons taken well for future hiring practices and effective supervision. Don't fuel their fear, impress them with your evolution as a professional owner and manager. It takes them far longer to see it than you, and your professional associates and friends, but so what? Be steady, especially emotionally, and they will see the change and begin taking you far more seriously.
#2 Adding a bathing department and hiring pet bathers does not boost profitability.
Today, there are many pet grooming businesses without a bathing department. They are a one department business, the grooming department in other words. Their owners typically pay 50% to 55% commissions to pet groomers who perform complete trim and bath or bath only duties. This arrangement is a staggering drain on profit. Even without converting to salaries, these owners can begin an impressive financial turnaround by simply adding a bathing department, and hiring pet bathers paid salaries. Therefore, the grooming department is split into a trimming department and a bathing department. Now answer this question and you will see the common sense of this transition.
When is it appropriate for a full-charge pet groomer earning say $13.00 to $20.00 an hour (commission equivalent or salaried) to do the grooming duties appropriately completed by a pet bather earning $6.00 to $9.00 an hour?
It never is under normal circumstances. Yet, that is exactly what was done in a majority of pet grooming businesses today (see also references to Charts 1 and 2 above).
At Madson, we created Charts 3 and 4 representing the addition of a bathing department staffed with hourly salary pet bathers to the businesses discussed above in Charts 1 and 2. Chart 3, a business still paying commission as in Chart 1, restructured its staff to one "full-charge" pet groomer paid by commission, and who is now supported by two hired pet bathers. The need for a second full-charge pet groomer paid commission was eliminated. With the bathing support, the one full-charge pet groomer is alleviated from the common tasks of brushing, combing, de-matting, ear cleaning, nail clipping, and instead focuses on setting patterns and finish work. Now, we ask you. How many pet groomers wouldn't love to let go of regular bathing and related duties and have the luxury to focus on mastering the more refined skills of pet styling? Now we've gone from the misconception of employees being fearful of change, to let's go!
As a result, the business in Chart 3 has increased daily gross profit by $16.00 a day, or $4,160 a year from their organization format in Chart 1, and they haven't even converted to salaries! It's easily explained this way too. If the service fee for a bath-only pet is $20.00, and you pay a 50% commission, the labor cost is $10.00 per bath only pet. However, a pet bather paid $6.00 an hour (not a full-charge pet groomer paid more) can do the same pet for about $5.00 to $6.00. That's a huge difference, and when you consider the annualized savings, it means boosting profit by thousands of dollars without lowering wage levels. Simple.
Finally, let's add a bathing department to the salary only business in Chart 2. Again there was a reduction of one full-charge pet groomer as above. This is then Chart 4, and it shows an increase of $34.50 a day, or $8,970.00 a year over the business in Chart 1. You didn't lower wages; you simply are not paying commission level wages (which are often equivalent to $12-$15 an hour when you work it out) for pet bathing duties accomplished by skilled pet bathers making around $6.00 to $9.00 an hour.
Albeit, we have mentioned the reduction of one full-charge pet groomer. Our experience has been that many pet grooming business owners can keep the employee, switching the least skilled one to a Bathing Department Supervisor and Assistant Pet Trimmer (team position) and increase business with more aggressive marketing until there is a demand for 2 full-charge pet groomers. In fact, some of these persons can continue to work as such on days when the other full-charge is off-duty, or by opening extra days a week.
If you have a serious interest in this topic, and you want to work out the calculations to a penny, I strongly suggest you invest a few dollars to get a copy of The Madson Pet Reporter (Spring 1997 edition) and thereby obtain Charts 1-6.
#3 Team Trimming Operations does not significantly boost profitability and lowers quality.
A good manager understands teamwork. The manager as coach knows if the team didn't do well, the coach didn't do well. When each player supports the others' efforts to achieve as a team they can achieve far beyond their individual capabilities. That means increased productivity in a pet grooming salon. Madson has proven over and over again that 3 skilled pet bathers can individually complete 12 baths and fluff-dry in 8 hours, for a total of 36 baths. However, by organizing them into Madson's Humane Team Bathing Operation, the same 3 bathers can instead complete 39 pets, and the quality of their work is equal or superior to individual operations. Can you imagine boosting your profit by saving the bathing labor cost for 3 pets every day?
Today, teamwork is unfortunately absent in the majority of pet grooming businesses. One reason is the lack of information. Other than From Problems to Profits and The Madson Pet Reporter there are few sources of teamwork information for pet groomers. In my opinion, the greatest reason for the lack of teamwork operations is that using commission based wage calculation methods completely eliminates the opportunity for teamwork. How sad for the hard-working owner and what could be team members.
Pet grooming businesses like those in in Chart 1, where there are two or more commissioned full-charge pet groomers, are essentially divided into sub-businesses headed by each full-charge pet groomer. Basically each is working alone, totally responsible for the complete bathing and trimming of each pet. There is almost no requirement they interact with each other. Perhaps you think that might be a benefit, but first, let's see what the advantages of teamwork are in a pet grooming business.
Pet grooming business owners using our consultation services regularly complain about the attitude of their pet groomers, especially those paid by commission. Their businesses are like those in Chart 1, where each pet groomer completes 100% of the grooming services for each pet they groom. We are nothing less than aghast when we hear stories of pet groomers laying claim to select clients and controlling appointment books. In such circumstances, the owner mitigates the inherent right of an owner to assign pet grooming duties in order to maintain client satisfaction and also efficiency. If a pet grooming business isn't cost-efficient, how certain is it that the business will survive, even if to the tyranny of some employees?
Have you considered your clients? Have you asked the employees to consider what they are doing to clients? Are you supporting egos that say "Only I can please this client!" There is nothing wrong with a pet owner requesting the services of a particular pet groomer, but is the selection process a mandatory function? New customers come into an operation that supports favoritism and ultimately division among the staff. Who will the new customer bond with? Hierarchies are created, and the coach is either missing or anguished. Whether it is subtle or obvious, there is competition among the pet groomers. Worse yet, competitive pet groomers often vary their styles to some degree. Thereby, every pet owner becomes more reliant on their "regular groomer" to produce their desired pet care services. The owner is weakened.
In a team environment, the coach trains cooperative staff to work with another to produce uniform, quality pet care services. The coach specifies the standards of aesthetic styling, humane pet care services, and client services, and then every pet groomer "clones" the signature standards of the team, i.e. business and owner. In this way, if one pet groomer is not working, other pet groomers can equally provide the services requested. This is serving clients, and not the ego of a dominating pet groomer employee who would be more appropriately working for themselves. The employee is not really right or wrong, but must make a choice to cooperate as a team, or to work elsewhere. Pet owners should never be made to feel that they must choose between groomers, but know they can come any day and receive the services they desire from a well-trained team. Cooperation among pet groomers not vying for ownership of individual clients reduces stress and boosts morale. Leave competition behind the grooming competition ring where it belongs, and not in the daily work environment. Pets and clients are to be equally served by all, and not involved as pawns. It's that simple, and professional.
When one pet groomer knows how to groom a rare Portuguese Water Dog, the coach asks that pet groomer to demonstrate the procedures to other team members. Without a team, the skilled pet groomer may proclaim, "I do all the Portuguese Water Dogs." No one else then evolves their pet grooming skills. It also isn't fair to the pet owners; they should without question know that they can always rely upon the business to deliver the services they require. That is a sign of professional, and likely more profitable, pet grooming business. One of the best ways to encourage teamwork is to eliminate the self-centered mind frame that emanates from the commission-based and non-teamwork operations.
Teamwork also reduces the owner's burden of maintaining adequate skilled staff. In most commission wage operations there are full-charge pet groomers, and no pet bathers, and important team members in Assistant Pet Trimmer positions. Lose a full-charge pet groomer, and the owner may be at a loss to easily replace the worker. In a team environment, the owner has more flexibility to create a career path and entice entry-level workers to progress from pet bather, to assistant pet trimmer to master pet trimmer. You'll bond more loyal employees in a career-oriented environment too. It's like having a school program on-site, and a future personnel pool to go to in-house when there are job openings. Now that alone has given more peace-of-mind to many pet grooming business owners, and certainly to our operation for over 3 decades.
If the addition of a bathing department could boost profit by thousands of dollars per year as noted in Charts 3 and 4, what does the addition of Madson Team Operations do. More! A lot more!
Let's adapt this adage:
When is it appropriate for a full-charge pet groomer earning say $13.00 to $20.00 an hour (commission equivalent or salaried) to do the grooming duties appropriately completed by a pet bather earning $6.00 to $9.00 an hour?
When is it appropriate for a full-charge pet groomer earning say $13.00 to $20.00 an hour (commission equivalent or salaried) to do the grooming duties appropriately completed by a Madson Assistant Pet Trimmer earning $7.50 to $9.00 an hour?
It isn't. Of course it may happen at times during the work day due to the flow of work, but it is not commonplace. The wondrous Madson Assistant Pet Trimmer is flexible position that performs on-call some bathing duties as a pet bather, but primarily completes pre-clipping duties such as patterns, face, feet, stomach, anus area and tail on. When pre-clipping duties are finished for the day, the Master Pet Trimmer (the full-charge pet groomer) supervises gradually more responsible "finish trimming" skills completed by the Assistant Pet Trimmer for perhaps 1-2 hours each day. You are essentially providing on-the-job training. Not only that, you're saving money now, and making a wise investment for the future. When you lose a full-charge groomer, your Assistant Pet Trimmer can significantly patch up the works of the operation compared to having nothing else to rely on other than pet bathers. Further, where there are Assistant Pet Trimmers, you need fewer hard-to-find full-charge or "Master" pet trimmers and Assistant Pet Trimmers are much more conducive to "cloning" the style of the owner and working as a team. Even further, the full-charge pet groomers focus the majority of their day on just finish trimming; now they really get the on-the-job experience to become a true Master Pet Trimmer much more quickly than if they are performing pet bathing and pre-clipping on a daily basis. They also get the self-esteem of a team member helping to bring up the Assistant Pet Trimmer through the ranks of sort. Morale runs high in these businesses as everyone is progressing through a career path, and become ever more better at master pet grooming. Now if this isn't enough to excite you, look at the money savings.
What does it add up to? Typically, the pet grooming business that adopts Madson Team Trimming Operations can reduce their labor expense by 14% over a pet grooming salon paying full-charge commission basis pet groomers to do the same work, for the same fees. That's $7,000.00 a year more profit for the owner when gross wages of $50,000.00 a year are reduced to $43,000.00. It also lowers employer contribution and possibly other payroll taxes. Don't forget, no one took a pay cut, and you have all the advantages of Madson Team Trimming Operations too. Madson's Charts 5 and 6 break these calculations down like a science for you.
A miracle? It sure seems like one, but it is a good dose of common sense and management expertise applied by a progressive business owner. We encourage you to learn more about salaries and Madson Team Trimming Operations.
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