In last month’s article we talked about how to take the fear out of raising prices on grooming. This month is all about the logical side of price setting.
The Logical side is all about figuring out all your expenses and adding into that your salary or what you want to go home with on an annual basis.
A good accountant can help you with this if you are not good with numbers or don’t feel you can take a hard look at your business as a business. You must take all emotion out of the equation if you are to run a successful business and look at the facts. The facts are that everything has gone up and businesses need to raise prices to stay in business. Have you noticed even food at the grocery store has gone up. So let’s get started:
1. List all your expenses monthly and yearly. Do a spread sheet for every month of the year. Include rent, electricity, water, cam taxes, phone, and business cell phone.
Operating Expenses such as: Office supplies, shampoo, towels, maintenance, employee wages, employee taxes, advertising costs, anything that costs you to run your business no matter how small.
Take your expenses and salary and divide by 53 weeks then divide by 5 or 6 days (days you are open) and you will find out how many dogs you need to do daily or on a monthly basis.
You can see there is a lot of play in those #’s that is not counting baths or extra services. This is only an example and just to help you get an understanding about setting the pricing.
To get your average dog price ÷ the # of grooms into your monthly groom income total. To get your average bath price ÷ the # of baths into your monthly bath income total. Keep accurate records on a spread sheet daily, weekly and monthly.
2. Figure out how long it takes to groom an average dog, a medium dog and a large dog (this should be reasonable times). All your extra services such as de-matting or de-shedding, etc. should be based on your hourly rate you come to that will cover all your expenses and salary. Your clients do not have to know your rate to cover these expenses but you can give them an approximate cost based on what you know you need to make per hour. For example if your hourly fee comes to $60.00 an hour and a client wants a ½ hour of de-shedding the extra charge would be $30.00. Some areas are more expensive to live in than others and fees are going to reflect that.
People will balk whether it’s a $1.00 or $5.00; remember it’s all in your presentation to them. Never apologize for a price increase but be polite, they know everything is going up and will realize if you are going to provide quality service and be able to stay open you need to raise your prices accordingly. We have put a note on the door and at the front desk 3 months prior to the date of the new price increase saying:
“Price Increase Beginning March 30th Due to rising costs in all areas. Our accountant has informed us in order to stay in business and provide quality products and keep our highly trained staff and provide the best service we will have to raise our prices by $----- per pet. While we understand our clients are also faced with rising costs and greatly sympathize, we love grooming your pet and want to continue to do so. We thank you for your understanding. If you have any questions please talk to ---------- and we would be glad to make suggestions for your pets style that could offset some charges. Thank you again for your understanding.”
------------------- Salon Phone # ------------------ Cell Phone # -----------------
I hope this article helps you!
Merry Christmas to you & your families!
Mitzi Parrish, NCMG