The Reality Behind 50% Commission in Pet Grooming: Why It's Not Sustainable

With over 16 years in the pet grooming industry and the experience of running 14 bustling pet grooming salons and 4 mobile grooming units, I've navigated the highs and lows of the industry for years. Amidst the flurry of wagging tails and the orchestrated chaos of a pet groomer’s routine, there's an often-overlooked reality that deserves attention: the myth of the 50% commission. In recent years, there's been a prevailing notion that groomers should earn half of what they bring in – a tempting prospect for those wielding scissors and clippers. However, the truth behind this figure is far from the glamorous image it conveys.

It's not just about dollars and cents; it's about fostering a mutual understanding between employers and employees. While the allure of a hefty commission may dazzle some, it's imperative to recognize the broader implications – for both the business and its workforce. Workplace benefits and fair compensation are not mutually exclusive, but a delicate balance must be struck to ensure the sustainability of our salons and the well-being of our team.

In this blog, I will shed light on why paying groomers 50% commission is simply not feasible. Beyond anecdotal experiences, I'll delve into the nitty-gritty of numbers, dissecting the financial intricacies that make such a model unsustainable. From taxes to insurance and everything in between, we'll crunch the numbers to reveal why our industry must operate on a budget-driven basis rather than succumbing to unrealistic demands. 

The Financial Responsibilities of Running a Grooming Salon

The responsibilities of running any business are multifaceted. There is a delicate balance between ensuring the morale and happiness of our staff, and maintaining profitability as a business. 

Operational Costs 

Running a salon consists of various operational expenses. Some of these expenses include rent for the space, utilities, equipment maintenance, and supplies such as shampoos, conditioners and grooming tools. These costs form the backbone of daily operations and must be carefully accounted for in budget planning. If there is no accountability for what expenses are going out before payroll, there is no way to know what you can or cannot afford to pay. 

Staffing Expenses

Beyond groomers' commissions, there are additional staffing expenses to consider, such as wages for customer service representatives, assistants, bathers, marketing staff and owner pay. Payroll taxes, workmans comp insurance, benefits (if offered) and training costs also contribute to the overall staffing budget.

Taxes and Insurance

Grooming salon owners must contend with taxes at both the federal and state levels, including income tax, payroll tax and potentially sales tax depending on jurisdiction. Additionally, insurance coverage, including liability insurance and worker's compensation, is essential to protect the business and its employees from unforeseen liabilities. Working with live animals inherently comes with a high risk level. Despite the groomer's best intentions, there is always risk of injury to pets and team members. Liability insurance provides protection in the event that an animal is injured. Without proper coverage, a single lawsuit could be devastating to a business. Worker's compensation insurance is essential to provide financial support for employees who sustain work-related injuries or illnesses, covering medical expenses, rehabilitation costs, and lost wages. Not only does this type of insurance demonstrate a commitment to the well being of the salon staff, but it is also a legal requirement. 

Marketing and Advertising

While word-of-mouth referrals can be powerful drivers of business for pet grooming salons, embracing marketing and advertising strategies can amplify visibility, attract new clients and foster sustained growth. Leveraging social media platforms such as Facebook, Instagram and Twitter to showcase grooming transformations, share grooming tips and engage with existing and potential clients is a fantastic start to implementing a marketing strategy. Regularly posting visually appealing content featuring happy pets can generate buzz and influence followers to book appointments. It’s a good idea to encourage satisfied clients to tag the salon in their posts to expand reach through user-generated content.

Having a full website, marketing and advertising budget is the best way to foster growth within your company. Not every salon can afford to have its own internal marketing team, but taking little steps at a time to put some advertising in place can generate a great return for your business. 

Facility Upkeep and Maintenance

Unfortunately, we’ve all had those days where our favorite pair of clippers or dryer broke. Making repairs and/or having back up equipment are all part of having a business. Regular maintenance of the salon's physical space is necessary to ensure a safe and welcoming environment for pets and clients alike. This includes repairs, renovations, cleaning supplies and ongoing upkeep to maintain a professional appearance.

Professional Development and Continuing Education

Groomers must stay consistent in the learning of the latest techniques, trends and best practices in pet grooming. Investing in professional development opportunities, such as workshops, seminars and certification programs, is crucial to upholding the salon's reputation for quality service. As a salon owner, standing behind your groomers by providing training opportunities can be a huge benefit to both you and your team. It does, however, come at a cost. There are many different options that come with many different price tags, but this can all be built into your budget at the beginning of each year.

Contingency Plan 

Building a contingency fund to cover unexpected expenses, such as equipment breakdowns or sudden drops in revenue, is a prudent business practice. Having a financial buffer can help weather challenging times and maintain stability in the face of unforeseen circumstances. This is not profit; rather it’s an amount you intend to reserve from each service. You either refrain from using it or reinvest it back into the company to facilitate its growth. 

Myth Busting

There is a massive misconception that the salon owner gets 50% of the groom when the groomers are also receiving 50%. The fact is that after insurance and employee tax alone, that is already false. Adding on insurance, employee tax, and benefits would realistically mean the owner is paying out nearly 60% on that groom.

Let's do some math:

If the average groom price in the salon is $70:

(Math is based off of an average groomer doing 120 dogs per month, These are high level estimates based off of experience)

We break down all costs per dog, enabling you, as the salon owner, to adjust grooming prices as needed.  

Now you need to include the expenses. There are numerous variables to consider, but it’s crucial to include rent, utilities, products and administrative costs in this calculation. The more groomers that are in a salon, the lower the number. For example, if you have 4 groomers doing 480 dogs per month and your rent is $2400, you would pay $5 in rent per dog. If you had 6 groomers in the salon doing 720 dogs per month and your rent is still $2400, you are now paying $3.33 in rent per dog. 

On a high level, this number is impossible to share as an example, but this is why creating and sticking to a budget is of utmost importance. The typical rate that we see many salon owners paying out per dog in expenses can be anywhere from $13-$25 per dog, and sometimes even more than that. After covering groomer fees and expenses, there’s often little to no margin for profit. This leaves restricted room in the budget for unexpected expenses or reinvestment in the business for equipment upgrades or expansion. 

So Do I Need to Raise My Prices?

If you are struggling with any of this, you may need to do a price increase. You can raise your prices and lower your groomers commission succinctly to ensure the groomers do not lose any money. You can also allow room in your budget for adding benefits to your pay. Please Click Here to see our blog about price increases for help on raising your prices.  

Paving the Way 

Running a successful pet grooming salon involves meticulous attention to detail and a comprehensive understanding of the financial landscape. While the allure of a 50% commission may seem appealing on the surface, the reality is far more complex. From operational costs and staffing expenses to taxes, insurance and marketing efforts, every aspect of the business requires careful consideration and budgeting. I hope by shedding light on the financial realities of owning a pet salon and debunking myths surrounding grooming salon economics, I can help you create a sustainable and prosperous business. 

The road ahead may be challenging, but with clarity and collaboration, we can pave the way for a thriving industry built on sound business principles and mutual respect.

Elli Bultemeier NCMG, CPAe, PTI 2592