What’s the Best Commission Rate for Salons/Spas?

June 20, 2021 | By Neil Ducoff | 2 Comments

THE DANGEROUS QUESTION:I own a salon and I’m hiring a stylist. I was going to do a 60/40 split, with me getting 60% and providing the supplies. Is that accurate or favoring one party over the other?”

OK, on the surface, 60% going to the salon — even with the cost of providing supplies — seems straightforward.

But the problem with the “what’s the best commission rate” question is that it demonstrates the massively oversimplified approach that many owners take concerning their single largest business expense. So much so, it’s created a history of devastating results.

THE MOST HONEST ANSWER ON PAY YOU’LL EVER GET:

As simple as, “What’s the right commission rate?” appears, it is a very complicated question to answer. Here’s why:

  1. There’s the financial reality of your business: Only a review of your financials and expenses can determine what your ideal payroll % should be. But that ideal percentage changes as your expenses, productivity rate, and pricing change.

    The problem is that once your commission percentage is set, any change in operating expenses, product cost, productivity rate, and more — you are stuck with your selected commission rate. Simply put, once commission rates are set, they are extremely difficult to lower without upsetting or losing employees.... Read More

    THE DANGEROUS QUESTION: “I own a salon and I’m hiring a stylist. I was going to do a 60/40 split, with me getting 60% and providing the supplies. Is that accurate or favoring one party over the other?” OK, on the surface, 60% going to the salon — even with the cost of providing supplies — seems straightforward. But the problem with the “what’s the best commission rate” question is…
    Read More

    Categories: Team-Based Pay

The Secret to Loving Salon/Spa Ownership

June 13, 2021 | By Neil Ducoff | 2 Comments

Owning a salon/spa will always have good days and bad days. Heck, work in general has good and bad days.

Good days are when everything is running like clockwork, employees are productive and playing nicely together, critical numbers look great, and revenues are driving profit and cash reserves.

  • Translation: Business is fun and fulfilling. Whatever stress exists, it doesn’t get in your way.

Bad days are when problems are piling up, employees are driving you crazy, your critical numbers are scary, profit has left the building, and cash reserves dried up long ago.

  • Translation: You feel stressed, beaten up, and sometimes, even defeated. The stress has you questioning if it’s all worth it.

So, what’s the secret to getting and staying in love with your
salon/spa?... Read More

Owning a salon/spa will always have good days and bad days. Heck, work in general has good and bad days. Good days are when everything is running like clockwork, employees are productive and playing nicely together, critical numbers look great, and revenues are driving profit and cash reserves. Translation: Business is fun and fulfilling. Whatever stress exists, it doesn’t get in your way. Bad days are when problems are piling…
Read More

Categories: Leadership

Can Your Salon/Spa Pass this Business Acid Test?

June 6, 2021 | By Neil Ducoff | No Comments

Back in 2017, we shared our Salon/Spa Business Acid Test in this blog for the first time.

So much has changed over the last 18 months. We all experienced some of the darkest and most disruptive days in our lifetime.

Now that most states have lifted COVID-19 restrictions, people are
traveling again, eating out, going to ball games, and a sense of “normalcy” is returning.

But let’s not forget the financial and leadership lessons that this pandemic taught us. What may feel like “normal” today is not the same normal prior to the pandemic.

So, with 2020 being the most disruptive and stressful year ever for salon/spa owners, it just makes sense for all owners to assess the current state of their business and what needs to change.

The Salon/Spa Acid Test

The acid test looks at five critical areas of your business to assess what’s working and what needs attention.... Read More

Back in 2017, we shared our Salon/Spa Business Acid Test in this blog for the first time. So much has changed over the last 18 months. We all experienced some of the darkest and most disruptive days in our lifetime. Now that most states have lifted COVID-19 restrictions, people are traveling again, eating out, going to ball games, and a sense of “normalcy” is returning. But let’s not forget the…
Read More

Categories: Leadership , Test

When You Keep a Bad Employee for the Money He/She Brings In

May 30, 2021 | By Neil Ducoff | 2 Comments

Everything was going great. You couldn’t be happier with this employee.

Maybe you hired this employee right out of school, trained them, and helped them build that “big book.”

Maybe you hired this employee for their experience. And maybe because of the clients that would follow them to your business.

But over time, things changed. Teamwork was replaced with attitude, indifference, and entitlement. They would come in, do their clients, and leave.

At company meetings, they would radiate an unsettling funk that everyone could feel. In the break room, it was non-stop complaining about anything and everything.

You had a few quasi-fierce conversations with them about their attitude to no avail.

So why not fire them? The answer is obvious. They’re busy as hell and bring in a ton of money.

As a salon/spa owner, you can relate to the above scenario and likely have your own “employee from hell” stories.... Read More

Everything was going great. You couldn’t be happier with this employee. Maybe you hired this employee right out of school, trained them, and helped them build that “big book.” Maybe you hired this employee for their experience. And maybe because of the clients that would follow them to your business. But over time, things changed. Teamwork was replaced with attitude, indifference, and entitlement. They would come in, do their clients,…
Read More

Categories: Information Flow , No-Compromise Leadership , Teamwork

Achieving That Elusive Work/Life Balance

May 23, 2021 | By Neil Ducoff | 2 Comments

Every salon/spa owner wants work/life balance, but relatively few achieve it.

Employees want it, but the reality of working in a salon/spa means that services must be available at times that meet client demand and needs.

So, the big question is … if everyone wants it, why is achieving work/life balance much like the quest for the holy grail?

FACT: Achieving work/life balance means reassessing priorities and being willing to make compromises.

Here’s what you need to know and the choices you need to make to achieve your version of work/life balance:

  • It’s about time management: Let’s face it, you could accomplish more great things in less time if you took control of your time. That means setting your priorities to manage what you allow on your plate. Too many owners get caught up in the day-to-day craziness of business fighting fires. Before you know it, the day is shot and your to-do list just got bigger. KEY: Time management demands personal discipline. Use your calendar to make appointments with yourself to work on tasks. Most important is to regard your calendar as your boss. Working smarter and more effectively is the key to unlocking personal time for family and stuff that makes life more fulfilling.
  • It’s about being a business owner: Be realistic, if you’re starting or expanding a business, you’re committing to doing whatever it takes to ensure that the business startup is successful. That means more time must be channeled to work and less to balance. That’s part of the choice to start or expand a business. KEY: Reread the first bullet. Managing your time, even if it means long days or periods of working on your business, it still means working smarter not harder. Many service-provider owners struggle with work/life balance because doing services leaves too little time for leading the business — let alone carving out personal/family time. Yes, there will be times when the business demands everything you’ve got. But achieving work/life balance should always be worked into your plan.
  • It’s about financial discipline: One of the beautiful things about money, profit, and positive cash flow is the freedom it creates. Likewise, tight cash flow, slim or no profit, creates stress and anxiety. When this scenario continues for extended periods, owners can, and will, fall out of love with their companies. The thought of work/life balance becomes a source of frustration — even resentment. KEY: We call the understanding and management of finances and cash flow, “financial literacy.” But being financially literate is pointless without financial disciplines. Spend less than your revenues. View debt as drag. Too much drag can kill a business. To achieve work/life balance, you must be financially disciplined. Profit and cash reserves buy you peace of mind and time. Got it?

... Read More

Every salon/spa owner wants work/life balance, but relatively few achieve it. Employees want it, but the reality of working in a salon/spa means that services must be available at times that meet client demand and needs. So, the big question is … if everyone wants it, why is achieving work/life balance much like the quest for the holy grail? FACT: Achieving work/life balance means reassessing priorities and being willing to…
Read More

Categories: Leadership , Productivity

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