This is wild. If you can’t afford a salon then don’t go Big and expect your workers to pay for everything plus give you a salary as a boss. This uses your stylist and their customers to make the boss rich. 30% there is no way of treating your employees unless you are giving major benefits and with my experience this industry has become super greedy. Some workers are put in a position where they can’t leave their job because they have bills( rent, car, mortgage, family) and have no choice but to work harder because they can’t afford to take a loss. At the end of the day the loyal customers are the ones hurt the most because they think they pay more money to help out their stylist/barber to grow when in reality the majority of the money is going into the shop.
Hi Edgardo. We are not suggesting 30% commission rates at all. We are saying total service payroll FOR THE ENTIRE BUSINESS must live between 30% to 35% of business’ Total Revenue. (Again, that’s 30-35% of the company’s Total Revenue, which is very different than 30-35% commission per service provider.) This number doesn't include owner's salary either. You can pay whatever commission rate you like, but you need to make sure the business can turn a profit. Here's a link to the full blog post which goes into more depth: strategies.com/whats-best-commission-rate-pay-salon-spa-staff/ Hope this adds some clarity.
30% of revenue as labor, is not the same as 30% commission. Such a simple concept but many people watch this whole video and still don’t understand. It did take me a few times of watching this to understand though lol Thanks Neil 🙏
There will come a point in the industry, where there will be a reset in commission-splits. It isn’t sustainable to have service providers clip 50%+ of gross sales. I can see how many of these service providers will end up working for Supercuts (Corporate America) or even worse, a career change.
tinker2217 I would have meetings where you break down what the costs etc are and keep them in the loop. Also working hard to get them clients is a big part that owners feel is not their job. A stylist is going to figure why take 30 percent and have to do all our own marketing and get and keep clients when I can go alone? I think being open will help. Alot of stylists dont think about the business part
How much is your salon going to make if you can't find any stylist willing to work for nothing? Spending money on admin, front desk or marketing doesn't matter if you don't have service providers.
Hey Lacy, thanks so much for the question! It's important to understand that main message here is the importance of keeping your TOTAL SERVICE PAYROLL PERCENTAGE (which is in not the same as commission percentage) at a rate that the company can afford. There is absolutely zero cap of what you can offer to pay your service providers, as long as the total payroll costs are hurting the company. Additionally, we whole-heartedly agree - your team needs to be paid what they are worth. And it's very feasible to pay very attractive rates while still being fiscally responsible to the company. Unfortunately, many owners make the mistake of doling out high pay rates without analyzing whether their company can afford them. There are ways do both...it just takes the financial literacy to understand how far you can go. Hope this helps!
This is wild. If you can’t afford a salon then don’t go Big and expect your workers to pay for everything plus give you a salary as a boss. This uses your stylist and their customers to make the boss rich. 30% there is no way of treating your employees unless you are giving major benefits and with my experience this industry has become super greedy. Some workers are put in a position where they can’t leave their job because they have bills( rent, car, mortgage, family) and have no choice but to work harder because they can’t afford to take a loss. At the end of the day the loyal customers are the ones hurt the most because they think they pay more money to help out their stylist/barber to grow when in reality the majority of the money is going into the shop.
Hi Edgardo. We are not suggesting 30% commission rates at all. We are saying total service payroll FOR THE ENTIRE BUSINESS must live between 30% to 35% of business’ Total Revenue. (Again, that’s 30-35% of the company’s Total Revenue, which is very different than 30-35% commission per service provider.) This number doesn't include owner's salary either. You can pay whatever commission rate you like, but you need to make sure the business can turn a profit. Here's a link to the full blog post which goes into more depth: strategies.com/whats-best-commission-rate-pay-salon-spa-staff/ Hope this adds some clarity.
Definitely missed the point of the video
This was a very informative video, thank you.
30% of revenue as labor, is not the same as 30% commission. Such a simple concept but many people watch this whole video and still don’t understand. It did take me a few times of watching this to understand though lol Thanks Neil 🙏
There will come a point in the industry, where there will be a reset in commission-splits. It isn’t sustainable to have service providers clip 50%+ of gross sales. I can see how many of these service providers will end up working for Supercuts (Corporate America) or even worse, a career change.
Thank you 🙏🏽
People keep asking the same dumb question. Listen to the video
How do you find stylists that will work for that percentage? I know it's reasonable, but how do you convince THE STYLIST that it is?
tinker2217 I would have meetings where you break down what the costs etc are and keep them in the loop. Also working hard to get them clients is a big part that owners feel is not their job. A stylist is going to figure why take 30 percent and have to do all our own marketing and get and keep clients when I can go alone? I think being open will help. Alot of stylists dont think about the business part
Do you think it’s for for the employer to want 30% commission.
How much is your salon going to make if you can't find any stylist willing to work for nothing? Spending money on admin, front desk or marketing doesn't matter if you don't have service providers.
Hey Lacy, thanks so much for the question! It's important to understand that main message here is the importance of keeping your TOTAL SERVICE PAYROLL PERCENTAGE (which is in not the same as commission percentage) at a rate that the company can afford. There is absolutely zero cap of what you can offer to pay your service providers, as long as the total payroll costs are hurting the company. Additionally, we whole-heartedly agree - your team needs to be paid what they are worth. And it's very feasible to pay very attractive rates while still being fiscally responsible to the company. Unfortunately, many owners make the mistake of doling out high pay rates without analyzing whether their company can afford them. There are ways do both...it just takes the financial literacy to understand how far you can go. Hope this helps!
How do you feel about a boss wanting 30% commition instead of booth rent
All these people commenting keep asking the same dumb question. Listen to the video