By Khris Berry
One of the most common questions faced by any groomer, grooming business or pet professional is how to price your services. The answers, however, often range from complex formulas to undecipherable strategies, depending on your business and finance background.
When you are selling a product or good, there are retail formulas that you can follow which will ensure proper pricing, and thus, proper profit. But how do you begin determining the price for your services? How do you properly capture your skill, experience, service and time into that elusive final number we call “price”?
How many of you reading this called other grooming shops in your area when you were determining your own service pricing? The flaw in that strategy lies in the fact that not every business has the same expenses or overhead; just because one price works for the Corner Shop does not mean the same price works for the Other Corner Shop.
Unfortunately, many groomers are challenged when it comes to developing proper pricing strategies. A good price structure will not only allow your business to thrive, but also offer room for economic growth. That is a fancy way of saying that many groomers find themselves in a pickle when their pricing does not grow with their business. They are faced with outrage and pushback from their customers when they enact price increases, and they struggle to find margins to increase their own wages as well as employee pay and benefits. So how can you create a pricing strategy that grows with your business while allowing you the ability to change your pricing as your expenses change over time?
Let’s look at a common scenario which groomers often encounter when it comes to having stagnant pricing and a flawed price setting strategy.
Darcy began grooming a number of years ago and based her pricing on her nearest competitor at the time; they charged $45 dollars to groom a Shih Tzu so she charged $46 dollars to groom the same dog. She managed fairly well, and before she knew it, she had scores of Shih Tzu clients regularly visiting her shop (as well as many other breeds, too).
Over time, her costs of doing business increased; the shampoos she used became more expensive, she had to replace her grooming table and dryer, and her rent, utilities, insurance and taxes were all increasing each year. She instituted a small price increase to try to manage the rising costs, but her customers pushed back (hard). In fact, a few left and found other groomers.
After another year, Darcy found that the price increase was not enough to stem the rising tide of expenses she faced in her business. She was working harder than ever but seemed to be making less. However, the negative response from her clients during the last price increase made her reluctant to increase the prices again.
What should Darcy do? Why was Darcy struggling to keep up?
Groomers like Darcy are often seeking dialogue for how and when to implement price increases when, in fact, the real answer they should be seeking is how to develop a price strategy that accommodates for inflation, increased cost of living and rising expenses.
So, where do you begin in developing a pricing strategy that will survive the test of time?
The one irreplaceable commodity in your business is you—and your time. Although you use water, electric, shampoo and a whole range of other items which have a cost associated with them, your time is the most valuable commodity you are selling as a groomer.
Every groomer can reasonably and safely service a limited number of dogs each day; each and every one of us is limited by time. Based on that reality, I recommend that you develop a pricing structure that is built on the time it takes to complete the services you offer.
To develop a price strategy based on time, you need to follow a few simple parameters.
You must know the costs to run your business; each month, week, day and hour has a cost associated with it. In simple terms, if you add up all the expenses you can expect to encounter, plus your profit, and divide by the number of hours you can actually work each day, you will determine your hourly rate.
Here is an example: Groomer A has weekly expenses of $1200 (this includes everything from rent to water to paperclips). She wishes to bring home a profit of $600. Therefore, Groomer A needs to make (gross) $1800/week. Groomer A works 8 hours per day/5 days per week; however, is actually only grooming dogs for about 6 hours each day while the remaining 2 hours is spent on scheduling, phone calls and cleaning. Following the pricing strategy, Groomer A needs to earn minimum of $60/hour for her grooming services in order to cover her expenses and realize her desired profit. ($1800/30 hours worked on clients each week=$60/hour)
If you are pricing your services based upon time, you have to provide accurate estimates and billing of your time. In order to execute this, you have to have reasonable and accurate knowledge of how long each service will take you to complete. It is critical to a service professional to be aware of your own time management and have a keen sense of timekeeping.
Many groomers (and clients) fall into the never–ending cycle of assuming that a grooming price is set. By releasing your pricing from “set” prices, and working on an hourly rate, groomers can be fairly compensated for dogs which are kept in less than exemplary condition, are less than willing to cooperate for the service, or simply require more time and energy to groom.
You can set a “minimum” hourly rate for dogs/services which may be less than an hour.
For example: A groomer may be able to complete a Shih Tzu in 45 minutes but choose to charge the full hourly rate of $60. This helps build in extra income for the inevitable no–show or cancellation.
You can set a higher hourly rate for specialty services such as hand scissoring, hand stripping, breed styles or behavior grooming. This is an excellent way to monetize advanced skills and recoup some of the investment into your continuing education. Additionally, setting specialty services aside at a higher rate lets clients know that those services are above the norm and require special skills to complete.
For example: A groomer may charge $60/hour for a base salon rate but may opt to charge $100/hour for specialty services since they require more time, skill and experience.
Let’s circle back to our sample groomer Darcy. When she originally set her prices, instead of setting her Shih Tzu price at $46, she could have set an hourly rate for her services. Then, her clients would become accustomed to having a variable rate based upon the time, condition, behavior and even style chosen. So, a Shih Tzu with Darcy may cost $46 one visit, but may cost $52 the next, and even $44 on a particularly fast or easy service.
Then, over time, as Darcy’s expenses increased or she wanted to grow her business, she could have changed her hourly rate to keep pace with the economy and needs of her business. By fluctuating grooming prices based on the above parameters, Darcy’s clients are led to the understanding that they are indeed purchasing the most precious of commodities—Darcy’s time.
Examples of other service industries which operate on hourly rates are mechanics and massage therapists. An hour of their time comes at a price—and that price is typically posted in a visible area. Having vague (or no) pricing strategy is confusing for both groomer and client, and allows the client to control the financial relationship. By posting an hourly rate and having non–set pricing, you can set yourself up to charge appropriately for your time as well as your skill set.
So, go forth groomer, free yourself from the constraints of pricing and charge what you are worth and what your business needs to thrive and be successful! ✂️