Business Owners- need your input

Ok all you savvy business owners and managers out there!  I need input!

I am opening my own studio in a few weeks and just about to begin interviewing to hire a massage therapist (or 2 part time) a part time esty, a waxing and brow specialist, etc

Having never employed commissioned employees and having never been a commission employee myself, I'm unsure of how some of it works in the real world :)

For instance, if a client comes in at a discounted rate for a service, what do I base the employees commission on?  (ie, my custom facial is $70, but I occasionally run a new client special at $49).

How do you handle paying commission employees with something like a Groupon/daily deal special?

If someone uses a gift certificate, what is the employees pay based on?

And, finally, any thoughts on starting percentages for commission (I'm in CA)?  I figure it'll be different for massage therapists than estys, right (less overhead and equipment for the massage).  And, do you charge a backbar fee, or work that into the commission split?

Thanks in advance!  I really crave some real-world knowledge and not just the info I find on google  ;)

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Permalink Reply by Shelley Hancock on April 27, 2013 at 11:47am

I start my commission Estys at 40%, then there is an incentive program to raise that percentage...it keeps them more interested in growing if they know there is possiblilty to make more $$.  I pay for everything...no back bar fee.

For the Groupon/Living Social deals they know that they do not make much on that first treatment. It's all about treating that new client well and getting them to reschedule. They get $15 for the initial treatment.

Permalink Reply by NBSkinCare on April 27, 2013 at 7:33pm

Thanks for the great reply Shelley!

So, is your commissioned esty a 1099 contractor or employee?  I'm wondering if it makes a difference on the percentage paid if they are or are not getting taxes removed from their final pay.

Can I ask, is your incentive program based on clientele or total sales (per month/quarter, etc)?  I want to offer an incentive, but I also don't want it to get complicated to keep track of.

What is the highest % you'd consider paying an esty?  Does it go no higher than 50/50 (If I'm providing everything).

Thanks for letting me pick your brain  ;)

Permalink Reply by Lelah Lombard on June 24, 2013 at 9:14am
Hello,
When you say you pay for everything does this mean all overhead costs, fixed and variable? I am a spa owner and having a heck of a time trying to figure out fair compensation for my esthetician. I have gotten so much different advice from so many different people! Are you paying yours as IC's?
I would appreciate more info!
Thanks so very much!!
Permalink Reply by coldsalineplexus on April 27, 2013 at 5:14pm

Commission % is based on the actual dollar amount that comes in to the business.  BUT a good boss will run those numbers by the staff before committing to any promotions to make sure you're not about to breed bad blood.  And definitely discuss your usual promotions with your staff before hiring.

Permalink Reply by NBSkinCare on April 27, 2013 at 7:36pm

Sounds like a good plan!  Thanks for the advice Christine. :)

Permalink Reply by Marty Glenn on July 9, 2013 at 12:37am

Nicole,

How is it going?  Have you opened? Figured things out?

Marty

SkinCareScience.com

Permalink Reply by NBSkinCare on July 9, 2013 at 12:49am

I see my first clients in the new space tomorrow!!

We're not totally done, but my room and the main areas are done *enough* to work in... thank GOD because paying double rent was killing me!

I did hire one PT Esty at 35% commission, 10% retail, and 40% for upgrades to tx or add ons to tx.  I have a good feeling about her, too- she's great!

Not found a MT yet, but I have more interviews this week.

I was just offered a 'partnership' of sorts with a local Dr who does fillers, botox, laser, etc.  She 'rents' a room a couple times a month and does clients in my spa and pays me a %.  Has her own insurance and licensing and such.  Just now looking into it, but does anyone have any experience with this?  I have had clients ask about these services, so I know its wanted!

Excited to get started!

Here's some pics of the progress in the lobby... remember- not done yet!  :)

Permalink Reply by Cindy Greenwood on July 9, 2013 at 6:22am

Nicole - that is a beautiful space!

I am also a LMT - if you want I would be happy to post the position for you on a massage therapist forum.

just message me the info if you are interested.  I can't believe you can't find a MT - there are so many out there!

Interesting info on the Dr. - that might be a really good discussion topic to start.

Permalink Reply by coldsalineplexus on July 9, 2013 at 7:49am

Cindy, I am also having a HECK of a time finding a massage therapist here in New Orleans.  I would love to hear from some advance-education minded massage therapists who aren't just clocking in and clocking out.

Permalink Reply by Toni B LaHaye on July 9, 2013 at 7:15am

I love your space - beautiful!  Post more of the finished product! I have an IC and I started her at 35% and 10% on retail.  Then after 3 months moved her to 15% on retail.  I provide her with all supplies, back bar, and products.  I will also do a salary tier similar to Shelley to determine future earnings based her work.  I don't make any adjustments for promotions or anything just because I keep it simple for myself.   

Permalink Reply by coldsalineplexus on July 9, 2013 at 7:48am

SO beautiful!  Congratulations!

I would like to reinforce that I think esthetician pay at 35% with 10% product and tips is spot on.  The reason I say this is that you don't want to be in a position where you aren't able to bring in great technology that allows you to charge more because you are paying out too much for basic facials.  35% keeps estheticians focused on upgrading and selling products, which is super important.  I pay my estheticians and myself this way and it makes a difference in sales while still keeping your estheticians comfy.

If you have any IC's, you have room to increase their percentage a bit since you're not paying out payroll tax on them.  At this point, knowing how much I pay out on payroll taxes, I would suggest this for any staff other than your estheticians.  BUT if you want to payroll them as IC's, you HAVE to be willing to let them practice their way, which can be a little scary.  For this reason, it's best to focus on bringing in adjunct therapists who have experience and clientele.

You're going to do great!!!

Permalink Reply by Marty Glenn on July 9, 2013 at 12:56am

Nicole

It looks great. Not easy to do at all...! :)

If you need any grand opening chemical peels let me know.  On me, I'll ship.  Best of luck to you. Keep the board informed on the good, bad and ugly. It really helps to read other experiences.

Marty

SkinCareScience.com

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