Greedy Bitch

Intro:

Hello hello and welcome to Greedy Bitch, a podcast where groomers stop apologizing for charging their worth.  I’m your host River Lee, founder of the Savvy Groomer.

Today's episode is sponsored by the Pay Masterclass, a 6-module masterclass where we teach you all about paying your employees legally.

Paying 50% is bull shit.  We here at the Savvy Groomer have cracked the code of paying employees a liveable wage they’re happy with and creating sustainable profit for pet grooming business owners.  Introducing the Pay Masterclass, a 6-module exploration on how to legally pay W2 employees, specifically designed for the pet grooming business.  Busting myths while teaching you the skills and winning formulas you need to create a pay structure that actually works. 

Let’s talk about today's topic:

Should my pet grooming business pay employees commission?

At the Savvy Groomer, we firmly believe that utilizing an hourly wage system coupled with production bonuses based on the Groomer Point System (GPS) is the most effective way to compensate our employees. This approach not only fosters a team mindset among our staff members but also ensures consistent and predictable payroll costs for our business. In this podcast, we will delve deeper into the reasons why we advocate for this payment structure.

When considering commission-based pay, it is essential to keep in mind certain legal stipulations. Commission-only employees are compensated based on the revenue they generate for the business. It is crucial to cap commission at a reasonable level, generally not exceeding 30%, in order to maintain a sustainable payroll expense. Furthermore, businesses opting for commission-based pay must navigate various legal obligations. For instance, at least 75% of the gross sales must come from commission-only services, and the employee should earn at least 50% of their income through commission. This requirement should not be confused with a 50% commission rate. Additionally, the employee must earn at least 1.5 times the state or federal minimum wage, whichever is higher, and their working hours must be meticulously tracked. Complying with these legal requirements can be complex, and we provide comprehensive guidance on commission-based pay in Module One of our Employee Pay Masterclass.

On the other hand, an hourly wage system offers several advantages. Hourly employees are paid based on the actual hours they work, which fosters a team mindset and encourages collaboration among team members. Moreover, this payment structure ensures consistent and predictable payroll costs, providing employees with reliable and stable paychecks. By implementing an hourly wage system, businesses can achieve a win-win situation for both the company and its employees. Detailed insights into the benefits of hourly pay can be found in Module One of our Employee Pay Masterclass.

At the Savvy Groomer, we propose a hybrid payment model that combines the advantages of hourly pay with production bonuses based on our GPS. Production bonuses are additional monetary rewards that employees receive when they meet or exceed specific performance expectations. These bonuses go beyond regular pay or salary and serve as incentives to drive productivity and maintain high-quality work. This approach is an effective way to motivate employees and boost their performance. We provide in-depth guidance on production bonuses in Module Six of our Employee Pay Masterclass.

Now, let's delve into what the Groomer Point System entails. The GPS is a transformative tool for grooming businesses. We offer a comprehensive workshop on Pricing & Points that explores this system in detail. In essence, a point in our GPS represents one unit of effort, approximately equivalent to 30 minutes of work.

Determining an employee's expected amount of production points involves setting up employee roles and establishing three tiers within those roles. For instance, you can have Bather Tier A, Bather Tier B, and Bather Tier C. As an employee's skills and performance improve, their points expectation increases accordingly. Generally speaking, Bather Tier A would be our baby bather or a beginner. Bather Tier B would be intermediate, or our knowledgeable or finished groomer. Bather Tier C would be the people that exceed things. That could either be a pet stylist versus a regular groomer. That could also be a power groomer versus a regular production groomer. Module Three of our Employee Pay Masterclass offers an extensive exploration of this topic.

All in all, the Savvy Groomer advocates for an hourly wage system combined with production bonuses based on the Groomer Point System. This approach promotes a team mindset among employees, ensures consistent and predictable payroll costs, and motivates staff members to achieve high productivity and maintain quality work. By implementing this payment structure, grooming businesses can create a positive and rewarding work environment for their employees while maintaining financial stability.

Outro:

If you guys are interested in learning more about the Pay Masterclass, be sure to visit me at savvygroomer.com/pgmc. This is a 6-module masterclass where we teach you how to pay your employees.

Thank you all so much for listening to this podcast, Should my pet grooming business pay employees commission?. Be sure to visit me at SavvyGroomer.com to see my current opportunities to work with me in growing your pet grooming business plus more free resources for you to learn. See you in our community on Facebook - Savvy Pet Professionals! As always, Happy Grooming

Hello hello and welcome to Greedy Bitch, a podcast where groomers stop apologizing for charging their worth.  I’m your host River Lee, founder of the Savvy Groomer.

Today's episode is sponsored by the Pay Masterclass, a 6-module masterclass where we teach you all about paying your employees legally.

Paying 50% is bull shit.  We here at the Savvy Groomer have cracked the code of paying employees a liveable wage they’re happy with and creating sustainable profit for pet grooming business owners.  Introducing the Pay Masterclass, a 6-module exploration on how to legally pay W2 employees, specifically designed for the pet grooming business.  Busting myths while teaching you the skills and winning formulas you need to create a pay structure that actually works. 

Let’s talk about today's topic:
Can I pay my employees in cash if it's on payroll?

Before going into the nitty gritty of paying employees in cash, let’s gain a better understanding of payroll practices in the pet grooming industry. Payroll refers to the process of compensating employees for their work, including aspects such as wages, deductions, tax withholding, and employment benefits. It is important for business owners to comply with local, state, and federal regulations.

When it comes to cash payments, it’s important to consider the legal and practical implications. While cash transactions are convenient, they can present challenges and potential risks for both the employer and the employee. Cash payments may raise concerns regarding accurate record-keeping, tax compliance, and the protection of employee rights. It’s essential to follow all applicable labor laws and taxation requirements to safeguard your business.

Is it okay to pay employees in cash?

The short answer is yes, you can pay your employees in cash, but there are certain things you need to keep in mind. First off, you have to follow payroll laws and report all the wages to the IRS (that's the tax folks). This means you need to withhold the right amount of payroll taxes and keep accurate records of how much your employees work and how much they earn. You also need to make sure you're following unemployment and workers' compensation laws. It's important to remember that cash wages have to be taxed, and you have to report all wages, taxes, and declare them as income. This includes federal income taxes, Medicare taxes, Social security taxes, and state income taxes.

Talk to the pros.

Before you decide to pay your employees in cash, it's a good idea to talk to tax and legal professionals who know the nitty-gritty of this stuff. They can guide you through the process and make sure you're following all the rules and regulations. If you don't withhold taxes correctly, your employees might end up facing penalties when they file their tax returns. Plus, if you don't withhold FICA (that's social security and Medicare) taxes, they might not get the social security coverage they deserve.

Keep good records.

Keeping good records is super important when it comes to paying your employees. You need to keep track of when your employees got paid, how much they earned, and how much you withheld. Your state might also have requirements for pay stubs and record-keeping, so be sure to meet those too. If you don't have proper documentation of hours worked and wages earned, you could end up facing lawsuits. And without pay stubs, timecards, and other necessary paperwork, it's unlikely that you'll win in court if things go wrong.

Here are some steps you can take to maintain proper records:

Establish a system to track employee payments, hours worked, and any deductions. This can be done digitally or with paper-based records, depending on your preference and the size of your business.

Even if you pay your employees in cash, provide them with pay stubs detailing their gross wages, deductions, and net pay. This helps both you and your employee maintain a clear record of earnings and deductions.

Keep a cash log that records each payment made to employees. Include the date, amount, employee name, and any relevant notes. This log services as a reference for future record-keeping and can help resolve any discrepancies.

Track the hours worked by each employee. Require them to clock in and out or keep a record of their attendance. This will provide evidence of the hours worked and help calculate accurate wages.  Even if you are paying straight commission or commission exempt you should still keep track of hours worked in case your employee accuses you of not meeting guidelines or not paying them overtime.

Keep receipts for any business expenses related to employee wages, such as payroll taxes, unemployment insurance, and workers’ compensation. These receipts will support your records and help during tax filings or audits.

It’s crucial to keep personal and business finances separate. Avoid mixing cash used for personal expenses with cash used for payroll. Maintaining separate accounts helps ensure accuracy and clarity in your record-keeping.

Periodically reconcile your records to identify any discrepancies or errors. Verify that the total wages paid align with your cash log and other documentation.

Stay up to date with local, state, and federal regulations regarding record-keeping requirements for payroll. Different jurisdictions may have specific guidelines you need to follow.

Why paying in cash can be tricky.

While it's legal to pay your employees in cash, there are a few reasons why it can be a bit tricky.

First of all, it's hard to keep track of cash payments and maintain accurate records. 

Keeping track of cash payments and maintaining accurate records can be challenging due to several factors.

Cash payments often lack a paper trail or electronic record, making it difficult to track and verify transactions. Without proper documentation, it becomes challenging to provide evidence of payments, hours worked, and deductions.

When dealing with cash transactions, there is a higher risk of errors or discrepancies. Manual calculations can be prone to mistakes, leading to inaccuracies in recording wages, tax withholdings, or deductions.

Cash payments require meticulous record-keeping to ensure accuracy. It involves tracking not only the amount paid but also details such as dates, employee names, hours worked, and any additional information relevant to payroll compliance. Managing and organizing these records manually can be time-consuming and prone to errors.

Cash payments can lack transparency compared to digital payment methods. Without a clear record of cash payments, it becomes challenging to provide transparent and verifiable information to employees, tax authorities, or auditors when required.

Cash payments may raise compliance concerns, such as underreporting income or avoiding tax obligations. Without proper documentation and accurate record-keeping, there is an increased risk of non-compliance with tax laws, labor regulations, and employment standards.

Reconciling cash payments with other financial records, such as expense tracking and tax filings, becomes more complicated without proper documentation. It can lead to discrepancies in financial reporting and pose challenges during audits or financial reviews.

In some jurisdictions, there may be specific legal requirements for record-keeping and pay stubs, even for cash payments. Failing to meet these requirements can result in penalties or legal issues for the employer.

A payroll service provider is a third-party service that specializes in managing various aspects of payroll administration on behalf of businesses. Using a payroll service provider who pays your employees through direct deposit or paper checks is much safer. They'll make sure you're following all the laws and regulations related to minimum wage, overtime, taxes, and record-keeping.

Payroll service providers have systems and processes in place to ensure accurate calculations of wages, deductions, and tax withholdings. They have expertise in payroll compliance, including staying up to date with changing tax laws and employment regulations. This helps minimize the risk of errors or non-compliance with payroll-related obligations.

Payroll service providers maintain detailed records of employee compensation, tax filings, and other payroll-related information. They generate pay stubs and provide necessary documentation for employees’ earnings, taxes, and deductions. This helps with record-keeping, providing a clear paper trail for financial reporting, audits, and employee disputes.

With direct deposit or paper checks, there is a transparent and traceable payment trail for each employee. It ensures that employees have documentation and evidence of their wages and deductions, promoting transparency and trust. Cash payments, on the other hand, lack the same level of transparency and can be difficult to track and verify.

Payroll service providers understand and apply relevant employment laws and regulations, such as minimum wage requirements, overtime rules, and tax obligations. They help businesses adhere to these laws, reducing the risk of penalties, legal issues, and employee disputes related to non-compliance.

Payroll service providers implement security measures to protect sensitive employee data and financial information. With direct deposit, funds are electronically transferred to the employees’ bank accounts, reducing the risk of cash mishandling, theft, or fraud. Paper checks can be securely issued and tracked, providing a more secure payment method compared to cash.

Outsourcing payroll functions to a service provider frees up time and resources for businesses to focus on core operations. It eliminates the need for manual calculations, record-keeping, and tax filings, allowing business owners to dedicate their time to strategic activities.

To sum it up, paying employees in cash can be legal if you follow all the necessary requirements. But it's always a good idea to talk to the pros, keep accurate records, and consider using a payroll service provider. By doing these things, you'll avoid potential legal troubles and make sure you're playing by the rules.

Remember, if you have any specific questions or concerns, it's best to consult with experts who can give you personalized advice for your pet grooming business.

If you guys are interested in learning more about the Pay Masterclass, be sure to visit me at savvygroomer.com/pgmc. This is a 6-module masterclass where we teach you how to pay your employees.

Thank you all so much for listening to this podcast, Can I legally pay my employees cash if it’s on payroll. Be sure to visit me at SavvyGroomer.com to see my current opportunities to work with me in growing your pet grooming business plus more free resources for you to learn. See you in our community on Facebook - Savvy Pet Professionals! As always, Happy Grooming

https://www.savvygroomer.com/pgmc

www.savvygroomer.com/pgmc

https://www.savvygroomer.com/pgmc

https://www.savvygroomer.com/pgmc

https://www.savvygroomer.com/pgmc

https://www.savvygroomer.com/pgmc

 Hello hello and welcome to Greedy Bitch, a podcast where groomers stop apologizing for charging their worth.  I’m your host River Lee, founder of the Savvy Groomer.

Today’s episode is sponsored by the Price Increase Masterclass, a 6-module Masterclass where we teach you all about increasing your prices.

Let’s talk about today's topic:

What to do when you have too many clients

Prospective clients are knocking down your door to get appointments and your phone is ringing off the hook with new business inquiries — congrats! While it might be stressful and confusing, having too many prospective clients and not enough time to take them on can be a good problem for a few reasons.

But you don’t want to let this problem go on for too long! If you don’t seize this opportunity appropriately, you could be turning away soulmate clients and missing opportunities to form new business relationships. So, how do you deal with this problem?

There are a few things to consider, so let’s break it down.

The first thing to ask is, who are your soulmate clients? How many soulmate clients do you have? 

If you don’t already know, I like to use a framework that puts clients into three categories:

Soulmate clients

Ideal clients

 Fling clients

So, the first step is to look at your client list and put each client into one of these three categories. If you’d like, you can make a spreadsheet or literally print out a list of all of your clients and then sort them into each category. I like to use 3 colored highlighters and use one color for each category. 

Then, take a look at the overall makeup of your clientele and ask the following questions:

If you don’t have many soulmate clients, you can ask the following questions:

Once you’ve finished categorizing your current client list and answering those questions, a good next step is to re-evaluate your business numbers and raise your prices.

It is important to raise your prices because since you can’t keep taking on more clients, you should pick higher quality clients instead (assuming that you don’t already have a full roster of soulmate clients). If you raise your prices, you will probably lose some clients, but you will be weeding out fling clients to make room for more soulmate clients.

In addition to raising prices, you can also start interviewing clients, requiring an application before they make an appointment, mandating that all appointments are made online, setting certain conditions to make an appointment (like requiring them to commit to a 4-week groom schedule), or offering consultation grooms before taking on a new client.

That might sound like a lot, but since you might be working with your soulmate clients every month for years to come, it is important to pick clients that are the best fit for you. Adding these extra layers before taking on new clients helps you decide if you want to commit to a long-term business partnership with someone and ultimately help you both in the long run. And again, it will help you weed out fling clients who don’t want to deal with the new parameters you set in place.

Invest in your relationships with your soulmate clients

You should choose to invest in your soulmate clients. Don’t commit to investing in subpar clients if they won’t give you something in return. And don’t turn away soulmate clients just because you’re already committed to a bad client!

I like to compare these business relationships to romantic relationships. If you’ve lived with a partner for 7 years but they don’t want to get married and commit to you, then you shouldn’t commit to them either! Go find someone better who values your worth.

It is not worth spending the effort to convince your fling clients that they need to spend the money on your services, because no amount of convincing will work on them. Instead, find the clients who value your work and will pay for your services without any extra convincing because they know the value.

Investing in soulmate clients can also help your business by improving the morale of your staff. By only working with pets that you want to work with, you can reduce the stress and fear that might come with grooming aggressive or difficult pets and help your staff enjoy coming to work. The more your staff love their jobs, the longer they will stay with your business and the more excited they’ll be to go to work every day, and therefore the more your business will thrive.

Start a membership model

I am a huge fan of using a membership model. Membership models are a whole other topic that I can get into in another post, but the short of it is that they can help you find more soulmate clients who are willing to commit to a long-term business relationship with you. A membership model also makes it easy to start a waitlist for any prospective clients that you cannot take on at the moment but might have an opening for in the future.

If you guys are interested in learning more about the Price Increase Masterclass, be sure to check out savvygroomer.com/pimc. This is a 6-module Masterclass where we teach you how to formulate and implement your price increase so you can finally make money and grow your business.

Thank you all so much for listening to this podcast, What to do when you have too many clients. Be sure to visit me at SavvyGroomer.com to see my current opportunities to work with me in growing your pet grooming business plus more free resources for you to learn. See you in our free community on Facebook - Savvy Pet Professionals! As always, Happy Grooming!

Hello hello and welcome to Greedy Bitch, a podcast where groomers stop apologizing for charging their worth.  I’m your host River Lee, founder of the Savvy Groomer.

Today’s episode is sponsored by the Price Increase Masterclass, a 6-module Masterclass where we teach you all about increasing your prices.

Let’s talk about today's topic:

We're not price gouging

If you’ve followed along with the Savvy Groomer at all, you probably know by now that I am a huge advocate for price increases in the grooming industry. Over the years, prices have barely increased across the industry. That means that prices are not keeping up with inflation or the latest trends and many groomers are suffering financially because of it.

I am a strong advocate for groomers to strategically increase their prices based on their needs and goals, and then yearly price increases after that to at least keep up with inflation.

This can mean that many groomers might increase their prices from $35 a dog to up to $150 a dog. 

This is quite the price increase and many people have an emotional reaction to these numbers. “Isn’t that price gouging?” they ask.

In this podcast, we’ll take a look at what makes for fair pricing and why I believe that strategic price increases are not price gouging.

Let’s start by defining some terms.

What is price gouging?

It is important to define what we are talking about. According to Wikipedia, price gouging occurs when a seller increases the prices of goods, services, or commodities to a level that is much higher than what is considered reasonable or fair. Usually, this event happens after a demand or supply shock, such as a dramatic price increase on basic goods after a natural disaster.

We all experienced how the price of basic goods such as toilet paper and face masks went up during the Covid-19 pandemic!

What is inflation?

Inflation is a general increase in prices and a fall in the purchasing power of money. Basically, the value of the dollar goes down. Inflation rates change from year to year, but on average, inflation is about 2–3% yearly.

A great example of inflation is the housing market. The value of homes has gone way up over the years. In 1965, the average cost of a home was about $21,500. Today, the average cost is about $348,000.

For an industry example, groomers in 1980 charged about $20 per dog. To understand this figure in today’s terms, we have to adjust for inflation. That $20 from 1980 would be worth about $73 today.

How can we determine what’s fair?

When determining a fair price, we often compare ourselves to others in the industry. But before we can determine what a fair price is for a dog groom, we need to determine if we’ve been fair to ourselves as an industry and if the market is fair.

Because I don’t think that the market is fair! In general, as an industry, most groomers have not raised their prices to even keep up with inflation, let alone to reflect their time, effort, and skill. It is common for groomers to have the same prices for 20 years!

In this industry, we struggle with the race to the bottom — meaning that we try to outcompete and get customers by having the cheapest prices. A groomer will leave a business to open their own shop, and either match or undercut the prices of their old boss (who already hadn’t raised their prices in decades!). They’ll hire a groomer to join their business, and then that groomer will eventually leave to do the same thing. I call this the “cycle of suck.” We see this happen over and over in the industry and prices, and groomers, suffer because of it.

Groomers also try to compete with big businesses like Petco and PetSmart, but these businesses actually offer their grooming services at a loss. They make their money off of getting customers in their stores and buying retail items, not from grooming. So why would we try to compete with their prices if they are losing money on grooming? That is definitely not fair.

When considering what’s fair, we also have to consider the most popular dog breeds today. Dog breeds are trendy, and groomers are not getting the same breeds that they did decades ago. 

For example, Doodles are a newer, insanely popular breed. Some days, all we get might be Doodles. These dogs have a very challenging coat and difficult personality. Grooming 5 doodles all day can be much more mentally and physically draining than grooming 10 Pugs or Shih Tzus in a day, and I believe that our prices should reflect those differences.

Some people might call this price gouging, but I don’t think so! I think that is entirely fair.

Why we shouldn’t be afraid to raise prices

Change can be hard, and many people might not understand your price increase right away. But, in order to survive as an industry, we need to stand up for ourselves, create an industry of respect, and charge prices that allow us to hire and pay people fairly. If more groomers learn about the importance of charging a fair, modern price, then these higher prices will no longer be seen as shocking. Instead, our new prices will become the industry standard, new groomers will be attracted to the industry, and groomers will thrive.

If you guys are interested in learning more about the Price Increase Masterclass, be sure to check out savvygroomer.com/pimc. This is a 6-module Masterclass where we teach you how to formulate and implement your price increase so you can finally make money and grow your business.

Thank you all so much for listening to this podcast, We’re not price gouging. Be sure to visit me at SavvyGroomer.com to see my current opportunities to work with me in growing your pet grooming business plus more free resources for you to learn. See you in our free community on Facebook - Savvy Pet Professionals! As always, Happy Grooming!