April 30, 2024 • 18 mins
In this special episode, we answer questions about Team-Based Pay (TBP) raised by Britt Seva in her Thriving Stylist podcast episode titled "Commission Structures That Work Today."
Listen to her episode of reference here: https://thrivingstylist.com/podcast/332
As fans of the Thriving Stylist podcast, we were thrilled to be included in the conversation about pay.
In this episode, we're excited to answer her questions, as well as bust some common Team-Based Pay myths, including:
- Top performers are at a disadvantage in TBP
- Employees will get a pay cut
- It discourages individual achievement
- Running the Team-Based Business Model is more work
This episode is a great resource for salon, spa, and medspa owners who are considering switching to the Team-Based Business Model and want answers to common questions.
Watch the video version of this episode: https://youtu.be/Gy_stS4rAAU
To learn more about how Strategies can help you create more profit, fun, and growth potential for you, your business, and your team, schedule a free 60-minute strategy session:
Schedule a free 60-minute strategy session: https://strategies.com/free-coaching-session
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The Beauty Business Strategies Podcast is designed to give salon, spa, medspa, barbershop, and lash studio owners, just like you, quick tips to make more money, inspire your team, and create world-class client experiences.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Beauty Business Strategies Podcast.
I'm Christy Hardy, and today wehave a unique episode for you.
We're big fans of the ThrivingStylist Podcast with Britt Siva,
and she mentioned strategies ona recent episode where she gave
her take on team-based pay.
She had some great insight andalso some great questions around
(00:20):
it, so we wanted to take thisopportunity to answer Britt's
questions and also bust somemyths about team-based pay that
we hear often.
So today we brought Neil Dukoff, the founder of Strategies and
creator of the team-based paybusiness model, here to address
some of the questions that Britthad brought up and to bust some
myths.
So welcome, neil.
(00:41):
I'm always glad to sit next toyou and learn from the best.
Speaker 2 (00:45):
I'm happy to be here.
Speaker 1 (00:46):
Awesome.
So let's dive into a couple ofquestions that came up from the
podcast, and one of them that Ithink is really important for us
to address is the questionaround bonus and a team bonus,
and how do top producers notmiss out on a bonus if someone
else maybe isn't performing atthat same level?
(01:09):
Discuss, discuss.
Speaker 2 (01:12):
Okay, britt brought up a good point and yes, it's
something that we hear all thetime, but there's an explanation
.
But what I want everyone tokind of lock into is the
component of team-based pay,which is an hourly rate pay
(01:36):
program with a bonus structure.
It can be, we would recommend,a team bonus.
Got to hit the goal, ring thebell and then there's X amount
of dollars in the bonus poolwhich can be calculated all
kinds of different ways.
An owner, to be safe, can sayI'm going to put $1,000 in the
(01:59):
bonus pool, whatever they want,but $1,000 in the bonus pool and
that's there.
That if we hit the goal, we cando the bonus, because you can't
hit goal and go oops sorry guys, there's no bonus, even though
(02:26):
we rang the bell, but the thereis no profit.
Or if the team missed goal but atop producer busted his or her
butt to drive as much revenue asthey physically could with
their own two hands.
But what if the rest of theteam or certain members of the
(02:46):
team didn't put their effort in?
They were too busy on TikTok inthe back room or whatever
they're doing?
Here's what the top producersmake out in a team-based pay
company.
So there's two points here.
One is their pay and the otheris bonus Strategies.
(03:07):
To be fiscally responsible, weteach our coaching clients that
if you create profit, you cantake a piece of that profit and
distribute that among the team.
As a team bonus, everyone getsa fair share among the team.
As a team bonus, everyone getsa fair share.
(03:27):
Or you can divide that up where, based on your percentage of
the payroll, you get a biggerpiece and newbies get a smaller
piece.
So there are lots of differentways to do it.
But you also got to look at thefinancial reality of the
company.
If they've been struggling forprofit, we got some things that
we need to get under control tostart creating profit so we can
(03:50):
do bonuses, so that's the bonuspiece.
But if you're looking at thehourly rate, the benchmark that
we use that is really rock solidis service payroll.
Payroll for hands that do thework needs to be 30 to 35
(04:14):
percent of total revenue.
Service sales plus retail salesequals total sales.
Got it 30 to 35 percent, whichmeans and everyone stay with me
on this for every additional$100,000 that that business can
generate in revenue.
(04:35):
There is another potential.
Reality may say somethingdifferent based on the financial
reality of the company.
Reality may say somethingdifferent based on the financial
reality of the company, butthere could be potential for
$30,000 to $35,000 in additionalpayroll service payroll
(04:55):
available that the company canpay.
Speaker 1 (04:57):
Right.
Speaker 2 (04:59):
What do you want to do with that?
We'll just say $30,000.
It's easier, the $30,000.
What do you want to do withthat?
Well, let me look at my peopleand who deserves a raise?
Christy, you are busy as heck.
You just slam every day.
Every client gets taken care of, High retention, high revenue
(05:20):
per hour.
Pre-book rates are 180%.
You're getting clients in fivetimes a week.
You help out, you mentoreverything.
I want to give you a raise.
I'm going to get you up to $150an hour, $170 an hour, like
Britt said.
(05:40):
I can do that as long as I keepmy payroll within 30 to 35% of
total revenue Right right right.
So I can pay you anextraordinary amount of money on
team-based pay that if you areon commission, your book is full
(06:02):
.
You got a waiting list.
Speaker 1 (06:04):
Yes.
Speaker 2 (06:05):
Here's how much you charge for your work.
You're 110% productive, butyou've hit the ceiling because
you're going to get a percent ofwhat your hands could generate.
On team-based pay, wecompletely eliminate the ceiling
for how far somebody can growbecause we're putting our
(06:28):
service payroll dollars wherethe performance is, but overall
performance, not just how muchmoney they bring in.
Speaker 1 (06:38):
Yeah, what does that really entail?
What is overall performance forsomeone who's watching?
Speaker 2 (06:42):
Hey, you have an attitude.
Speaker 1 (06:44):
I do.
Speaker 2 (06:46):
You know, do I want to pay you more for attitude?
Right hey you get to work late.
Do I want to keep paying you50% of whatever you bring in and
you come in late?
Right, you come in with yourattitude.
You, you, you know.
If there's a meeting, you sitthere like this and you're in
late, you come in with yourattitude.
If there's a meeting, you sitthere like this and you're
(07:06):
looking at your clock or on yourphone what's your first-time
retention rate?
Existing client retention rateyour pre-book rate.
Speaker 1 (07:13):
Ability to mentor others.
Speaker 2 (07:16):
Ability to mentor others.
Consistency Are you consistent?
Do you support companyinitiatives?
So there's overall performancethat we look at in a team based
company that we want to reward.
And for again, all of youwatching you know just, you
don't even have to do math, butjust think if you had all of
(07:37):
your payroll, your next payroll,in cash in front of you and you
wanted to divide it up based onthe performance, overall
performance of each individualin your company, including those
fine people that work at yourfront desk.
Speaker 1 (07:54):
Yes.
Speaker 2 (07:55):
You know, would you want to distribute it
differently than your commissionis automatically.
Because on commission you can'tsay how you want to distribute
it.
The commission is going to sayhere's how it's getting doled
out.
So that's why we say and Brittpointed this out on our podcast
that one of the things, themantras that we say at
(08:17):
Strategies is everyone'sresponsible for every hour the
company has available for sale.
If we can keep our productivityrate in that sweet spot that 80
, 85 percent, 75 to 85 percent,some days are going to hit 90,
95.
But if we can be productive andwe can bring in another
(08:43):
$100,000, we have money that wecan say Chrissy, you're doing an
amazing job, we're going togive you a raise and, being you,
you have the potential to makemore money as a top producer in
(09:04):
a team-based company.
And again, just guys, think ofthis we just hired two new
people Commission Salon.
They're going to get all thenew customers.
Speaker 1 (09:16):
Yes, they're going to get all the new customers, yeah
.
Speaker 2 (09:19):
Oh man, I'm not liking this.
They're going to get all thenew customers.
Yeah, oh man, I'm not likingthis.
They're going to get all thenew customers.
Team-based company.
We're going to hire two newpeople, put them through
training, they're ready to go onthe book and now it's team.
We have two more columns on thebook we need to fill.
Yes, because if we can do thatextra $100,000, there's another
$30,000 to $35,000 available forpay?
(09:42):
Yes, and it can go back to thepeople that helped get others
busy so everyone can grow.
There are many different movingparts in payroll.
And again, commission's easyand that's been the problem
Right, you pick a percent, putit out there, here's what they
(10:03):
brought in, here's what they get, sliding scales, whatever.
But you come up with theformula and that's all
predetermined.
Speaker 1 (10:10):
Yeah.
Speaker 2 (10:12):
In team-based pay.
There are decisions you canmake.
A lot of them are fun.
Some of them may not be fun.
Maybe you overhired and I can'tafford all the people that.
Speaker 1 (10:26):
I hired yes.
Speaker 2 (10:28):
But there's more mechanics that an owner needs to
learn and understand.
Nothing hard, yeah, but needsto learn and understand how to
get things dialed in nicely.
And that can always changebased on conditions in the
(10:48):
business.
Speaker 1 (10:48):
Yeah, how things ebb and flow.
Absolutely, that was a greatexplanation, thank you.
Speaker 2 (10:53):
I try.
Speaker 1 (10:54):
So let's talk about a few misconceptions.
Here's one, and as you have allalready heard, I'm sure that
we're going to be able toaddress this one in literally
one statement, but the myththat's out there about
team-based pay is everybodymakes the same amount of money.
Speaker 2 (11:11):
God, that'd be great, wouldn't it.
Speaker 1 (11:13):
As long as I'm making $150.
Speaker 2 (11:16):
Everyone makes $15 an hour.
Speaker 1 (11:18):
How's that?
Isn't that great.
Speaker 2 (11:19):
No, everyone on commission is paying an hourly
rate, they just don't realize it, just don't realize it, they
don't realize it.
If you're commissioned, youconvert to team-based pay.
What were their scheduled hours?
Divide their scheduled hours bywhat they grossed on the
paycheck and there's yourcommission, your hourly rate on
commission.
The hourly rate will be anaverage of what they were making
(11:45):
per hour on commission.
And then we massage that alittle bit because, because you
want the new hourly rate whenyou do a conversion, you want
the new hourly rate to be alittle tiny bit better than what
they were making on.
You can't go crazy, but you know, 25 cents, 50 cents a dollar,
(12:07):
more an hour or something.
But the new starting pay isgoing to be a little better than
a mirror image of what theywere making, so nobody's getting
a pay cut.
Speaker 1 (12:19):
Good, that was another one of those myths
that's out there.
Speaker 2 (12:22):
You know, we wouldn't be in business 30 years if we
were teaching how to do pay cuts.
Speaker 1 (12:27):
Yeah, no, not at all.
You'd see all the nuclearmushroom clouds from all the
salons that we were coaching.
Speaker 2 (12:37):
And we teach our coaches that when we do a pay
conversion, we're thererepresenting the employee yes,
the company but we arerepresenting the employee, and
all fairness and integrity mustprevail to make sure that
everything that we're presentingto the employee is as fair as
(13:02):
absolutely possible.
Speaker 1 (13:04):
Yeah, that's great.
Speaker 2 (13:07):
That's why very, very few companies that we and we've
done thousands of payconversions.
That's why very few have a lotof turnover after.
Yeah, they may lose one or two.
Quite frankly, sometimes theyneed to lose one or two Right.
Speaker 1 (13:27):
That's usually the ones that need to go.
Speaker 2 (13:29):
Or the people had already left, but keep showing
up at work and then we come inand help them finally leave.
Speaker 1 (13:35):
Finally leave Love, it All right.
So here's a kind of based onthis, a myth that's out.
There is that team-based paydiscourages individual
achievement.
Speaker 2 (13:46):
If you're passionate about the work that you do and
you're committed to deliveringthe best experiences possible as
a professional.
There's nothing in team-basedpay, when properly communicated
and properly led and has theright support systems around it
(14:10):
and the right culture.
There's nothing there that saysbecause you're not paid a piece
of what you do, you're beingpenalized.
Yeah, what we're doing issaying in measured increments,
performance reviews, pay reviews.
(14:30):
There's an opportunity to earnmore.
And if the company isperforming, if you're performing
, because I'm not going to holdyou back from getting a pay
increase, so I can't get a raisebecause they're not doing the
work you can't.
That's not fair to you, right?
So we teach our clients how youknow.
Listen, we've got to dosomething for Christy.
(14:51):
Yeah, got to do something forChristy.
You know the company's doingokay, but you're really working
hard at it.
We need to take care of you andwe'll make the adjustment in
the budget.
Speaker 1 (15:03):
That's good.
Speaker 2 (15:03):
But there's a fallacy about everyone that commission
is the motivator, and I alwayslike to use retail commission as
an example.
Yeah, you know, if commissionwas a motivator, why aren't you
guys?
Speaker 1 (15:20):
knocking it out of the park when it comes to
selling retail.
Agree, agree.
Speaker 2 (15:22):
Well, you know I'm not a salesperson, bob, and all
that other nonsense that goes inthere.
How about this?
You guys want to see a massivechange in revenue, charge the
right pricing for everything andstop giving things away or
undercharging clients.
How many clients are stillgetting charged the same price
(15:42):
as three price increases ago?
Because you're afraid?
Mrs Smith is going to have afit, yes, so no, it doesn't
demotivate.
Give us one more, because ourtime is running out.
Speaker 1 (15:53):
How about the fact that running the team-based pay
business model as a company ismore work for the owner?
Speaker 2 (16:00):
We've heard this Gee, your system sounds like a lot
of work.
How do you run your businessnow?
Right, are you doing a cashflow plan?
I'm really not into the numbers.
Speaker 1 (16:13):
Yeah.
It shows Right.
It shows Right.
Speaker 2 (16:19):
What's your current running net profit based on your
last profit and loss statement?
On the team-based pay businessmodel, there are requirements,
disciplines that an owner needsto embrace to get the full
(16:41):
potential of the system.
The numbers you need to track.
We'll keep saying cash flowplans, cash flow plans.
You've got to look at your P&L.
Is your balance sheet?
Are you getting healthier?
So it's not more work.
In many eyes it's more workthan you've been doing, or a lot
(17:02):
more work than you've beendoing because you haven't been
doing the work at all.
Speaker 1 (17:06):
Right.
So ultimately, it's the workthat needs to get done to run
your business.
Speaker 2 (17:09):
It's the work that needs to get done.
Period, that's it.
Speaker 1 (17:12):
Yeah, Good stuff.
If you would like to have acustom consultation to really
see if any of these myths needto be busted in your business or
if there's anything that we canguide you and educate you on to
do business better in yourbusiness, we'd love to chat.
Neil, thank you for bustingsome myths.
Thank you, Britt, for themention of strategies and the
(17:38):
opportunity for us to be able tocontinue to educate our fans
and the future of the beautybusiness industry.
Thank you again for joining usfor the Beauty Business
Strategies Podcast and we'll seeyou again next time.
Speaker 3 (17:48):
Thanks again for listening to the Beauty Business
Strategies podcast.
If you liked this episode, besure to hit follow To learn more
about how strategies can helpcreate more fun, profit and
growth potential for you, yourcompany and your team.
We invite you to schedule afree 60-minute strategy session
by clicking the direct link inthe description of this episode.
Welcome to the Beauty Business Strategies Podcast.
I'm Christy Hardy, and today wehave a unique episode for you.
We're big fans of the ThrivingStylist Podcast with Britt Siva,
and she mentioned strategies ona recent episode where she gave
her take on team-based pay.
She had some great insight andalso some great questions around
(00:20):
it, so we wanted to take thisopportunity to answer Britt's
questions and also bust somemyths about team-based pay that
we hear often.
So today we brought Neil Dukoff, the founder of Strategies and
creator of the team-based paybusiness model, here to address
some of the questions that Britthad brought up and to bust some
myths.
So welcome, neil.
(00:41):
I'm always glad to sit next toyou and learn from the best.
Speaker 2 (00:45):
I'm happy to be here.
Speaker 1 (00:46):
Awesome.
So let's dive into a couple ofquestions that came up from the
podcast, and one of them that Ithink is really important for us
to address is the questionaround bonus and a team bonus,
and how do top producers notmiss out on a bonus if someone
else maybe isn't performing atthat same level?
(01:09):
Discuss, discuss.
Speaker 2 (01:12):
Okay, britt brought up a good point and yes, it's
something that we hear all thetime, but there's an explanation
.
But what I want everyone tokind of lock into is the
component of team-based pay,which is an hourly rate pay
(01:36):
program with a bonus structure.
It can be, we would recommend,a team bonus.
Got to hit the goal, ring thebell and then there's X amount
of dollars in the bonus poolwhich can be calculated all
kinds of different ways.
An owner, to be safe, can sayI'm going to put $1,000 in the
(01:59):
bonus pool, whatever they want,but $1,000 in the bonus pool and
that's there.
That if we hit the goal, we cando the bonus, because you can't
hit goal and go oops sorry guys, there's no bonus, even though
(02:26):
we rang the bell, but the thereis no profit.
Or if the team missed goal but atop producer busted his or her
butt to drive as much revenue asthey physically could with
their own two hands.
But what if the rest of theteam or certain members of the
(02:46):
team didn't put their effort in?
They were too busy on TikTok inthe back room or whatever
they're doing?
Here's what the top producersmake out in a team-based pay
company.
So there's two points here.
One is their pay and the otheris bonus Strategies.
(03:07):
To be fiscally responsible, weteach our coaching clients that
if you create profit, you cantake a piece of that profit and
distribute that among the team.
As a team bonus, everyone getsa fair share among the team.
As a team bonus, everyone getsa fair share.
(03:27):
Or you can divide that up where, based on your percentage of
the payroll, you get a biggerpiece and newbies get a smaller
piece.
So there are lots of differentways to do it.
But you also got to look at thefinancial reality of the
company.
If they've been struggling forprofit, we got some things that
we need to get under control tostart creating profit so we can
(03:50):
do bonuses, so that's the bonuspiece.
But if you're looking at thehourly rate, the benchmark that
we use that is really rock solidis service payroll.
Payroll for hands that do thework needs to be 30 to 35
(04:14):
percent of total revenue.
Service sales plus retail salesequals total sales.
Got it 30 to 35 percent, whichmeans and everyone stay with me
on this for every additional$100,000 that that business can
generate in revenue.
(04:35):
There is another potential.
Reality may say somethingdifferent based on the financial
reality of the company.
Reality may say somethingdifferent based on the financial
reality of the company, butthere could be potential for
$30,000 to $35,000 in additionalpayroll service payroll
(04:55):
available that the company canpay.
Speaker 1 (04:57):
Right.
Speaker 2 (04:59):
What do you want to do with that?
We'll just say $30,000.
It's easier, the $30,000.
What do you want to do withthat?
Well, let me look at my peopleand who deserves a raise?
Christy, you are busy as heck.
You just slam every day.
Every client gets taken care of, High retention, high revenue
(05:20):
per hour.
Pre-book rates are 180%.
You're getting clients in fivetimes a week.
You help out, you mentoreverything.
I want to give you a raise.
I'm going to get you up to $150an hour, $170 an hour, like
Britt said.
(05:40):
I can do that as long as I keepmy payroll within 30 to 35% of
total revenue Right right right.
So I can pay you anextraordinary amount of money on
team-based pay that if you areon commission, your book is full
(06:02):
.
You got a waiting list.
Speaker 1 (06:04):
Yes.
Speaker 2 (06:05):
Here's how much you charge for your work.
You're 110% productive, butyou've hit the ceiling because
you're going to get a percent ofwhat your hands could generate.
On team-based pay, wecompletely eliminate the ceiling
for how far somebody can growbecause we're putting our
(06:28):
service payroll dollars wherethe performance is, but overall
performance, not just how muchmoney they bring in.
Speaker 1 (06:38):
Yeah, what does that really entail?
What is overall performance forsomeone who's watching?
Speaker 2 (06:42):
Hey, you have an attitude.
Speaker 1 (06:44):
I do.
Speaker 2 (06:46):
You know, do I want to pay you more for attitude?
Right hey you get to work late.
Do I want to keep paying you50% of whatever you bring in and
you come in late?
Right, you come in with yourattitude.
You, you, you know.
If there's a meeting, you sitthere like this and you're in
late, you come in with yourattitude.
If there's a meeting, you sitthere like this and you're
(07:06):
looking at your clock or on yourphone what's your first-time
retention rate?
Existing client retention rateyour pre-book rate.
Speaker 1 (07:13):
Ability to mentor others.
Speaker 2 (07:16):
Ability to mentor others.
Consistency Are you consistent?
Do you support companyinitiatives?
So there's overall performancethat we look at in a team based
company that we want to reward.
And for again, all of youwatching you know just, you
don't even have to do math, butjust think if you had all of
(07:37):
your payroll, your next payroll,in cash in front of you and you
wanted to divide it up based onthe performance, overall
performance of each individualin your company, including those
fine people that work at yourfront desk.
Speaker 1 (07:54):
Yes.
Speaker 2 (07:55):
You know, would you want to distribute it
differently than your commissionis automatically.
Because on commission you can'tsay how you want to distribute
it.
The commission is going to sayhere's how it's getting doled
out.
So that's why we say and Brittpointed this out on our podcast
that one of the things, themantras that we say at
(08:17):
Strategies is everyone'sresponsible for every hour the
company has available for sale.
If we can keep our productivityrate in that sweet spot that 80
, 85 percent, 75 to 85 percent,some days are going to hit 90,
95.
But if we can be productive andwe can bring in another
(08:43):
$100,000, we have money that wecan say Chrissy, you're doing an
amazing job, we're going togive you a raise and, being you,
you have the potential to makemore money as a top producer in
(09:04):
a team-based company.
And again, just guys, think ofthis we just hired two new
people Commission Salon.
They're going to get all thenew customers.
Speaker 1 (09:16):
Yes, they're going to get all the new customers, yeah
.
Speaker 2 (09:19):
Oh man, I'm not liking this.
They're going to get all thenew customers.
Yeah, oh man, I'm not likingthis.
They're going to get all thenew customers.
Team-based company.
We're going to hire two newpeople, put them through
training, they're ready to go onthe book and now it's team.
We have two more columns on thebook we need to fill.
Yes, because if we can do thatextra $100,000, there's another
$30,000 to $35,000 available forpay?
(09:42):
Yes, and it can go back to thepeople that helped get others
busy so everyone can grow.
There are many different movingparts in payroll.
And again, commission's easyand that's been the problem
Right, you pick a percent, putit out there, here's what they
(10:03):
brought in, here's what they get, sliding scales, whatever.
But you come up with theformula and that's all
predetermined.
Speaker 1 (10:10):
Yeah.
Speaker 2 (10:12):
In team-based pay.
There are decisions you canmake.
A lot of them are fun.
Some of them may not be fun.
Maybe you overhired and I can'tafford all the people that.
Speaker 1 (10:26):
I hired yes.
Speaker 2 (10:28):
But there's more mechanics that an owner needs to
learn and understand.
Nothing hard, yeah, but needsto learn and understand how to
get things dialed in nicely.
And that can always changebased on conditions in the
(10:48):
business.
Speaker 1 (10:48):
Yeah, how things ebb and flow.
Absolutely, that was a greatexplanation, thank you.
Speaker 2 (10:53):
I try.
Speaker 1 (10:54):
So let's talk about a few misconceptions.
Here's one, and as you have allalready heard, I'm sure that
we're going to be able toaddress this one in literally
one statement, but the myththat's out there about
team-based pay is everybodymakes the same amount of money.
Speaker 2 (11:11):
God, that'd be great, wouldn't it.
Speaker 1 (11:13):
As long as I'm making $150.
Speaker 2 (11:16):
Everyone makes $15 an hour.
Speaker 1 (11:18):
How's that?
Isn't that great.
Speaker 2 (11:19):
No, everyone on commission is paying an hourly
rate, they just don't realize it, just don't realize it, they
don't realize it.
If you're commissioned, youconvert to team-based pay.
What were their scheduled hours?
Divide their scheduled hours bywhat they grossed on the
paycheck and there's yourcommission, your hourly rate on
commission.
The hourly rate will be anaverage of what they were making
(11:45):
per hour on commission.
And then we massage that alittle bit because, because you
want the new hourly rate whenyou do a conversion, you want
the new hourly rate to be alittle tiny bit better than what
they were making on.
You can't go crazy, but you know, 25 cents, 50 cents a dollar,
(12:07):
more an hour or something.
But the new starting pay isgoing to be a little better than
a mirror image of what theywere making, so nobody's getting
a pay cut.
Speaker 1 (12:19):
Good, that was another one of those myths
that's out there.
Speaker 2 (12:22):
You know, we wouldn't be in business 30 years if we
were teaching how to do pay cuts.
Speaker 1 (12:27):
Yeah, no, not at all.
You'd see all the nuclearmushroom clouds from all the
salons that we were coaching.
Speaker 2 (12:37):
And we teach our coaches that when we do a pay
conversion, we're thererepresenting the employee yes,
the company but we arerepresenting the employee, and
all fairness and integrity mustprevail to make sure that
everything that we're presentingto the employee is as fair as
(13:02):
absolutely possible.
Speaker 1 (13:04):
Yeah, that's great.
Speaker 2 (13:07):
That's why very, very few companies that we and we've
done thousands of payconversions.
That's why very few have a lotof turnover after.
Yeah, they may lose one or two.
Quite frankly, sometimes theyneed to lose one or two Right.
Speaker 1 (13:27):
That's usually the ones that need to go.
Speaker 2 (13:29):
Or the people had already left, but keep showing
up at work and then we come inand help them finally leave.
Speaker 1 (13:35):
Finally leave Love, it All right.
So here's a kind of based onthis, a myth that's out.
There is that team-based paydiscourages individual
achievement.
Speaker 2 (13:46):
If you're passionate about the work that you do and
you're committed to deliveringthe best experiences possible as
a professional.
There's nothing in team-basedpay, when properly communicated
and properly led and has theright support systems around it
(14:10):
and the right culture.
There's nothing there that saysbecause you're not paid a piece
of what you do, you're beingpenalized.
Yeah, what we're doing issaying in measured increments,
performance reviews, pay reviews.
(14:30):
There's an opportunity to earnmore.
And if the company isperforming, if you're performing
, because I'm not going to holdyou back from getting a pay
increase, so I can't get a raisebecause they're not doing the
work you can't.
That's not fair to you, right?
So we teach our clients how youknow.
Listen, we've got to dosomething for Christy.
(14:51):
Yeah, got to do something forChristy.
You know the company's doingokay, but you're really working
hard at it.
We need to take care of you andwe'll make the adjustment in
the budget.
Speaker 1 (15:03):
That's good.
Speaker 2 (15:03):
But there's a fallacy about everyone that commission
is the motivator, and I alwayslike to use retail commission as
an example.
Yeah, you know, if commissionwas a motivator, why aren't you
guys?
Speaker 1 (15:20):
knocking it out of the park when it comes to
selling retail.
Agree, agree.
Speaker 2 (15:22):
Well, you know I'm not a salesperson, bob, and all
that other nonsense that goes inthere.
How about this?
You guys want to see a massivechange in revenue, charge the
right pricing for everything andstop giving things away or
undercharging clients.
How many clients are stillgetting charged the same price
(15:42):
as three price increases ago?
Because you're afraid?
Mrs Smith is going to have afit, yes, so no, it doesn't
demotivate.
Give us one more, because ourtime is running out.
Speaker 1 (15:53):
How about the fact that running the team-based pay
business model as a company ismore work for the owner?
Speaker 2 (16:00):
We've heard this Gee, your system sounds like a lot
of work.
How do you run your businessnow?
Right, are you doing a cashflow plan?
I'm really not into the numbers.
Speaker 1 (16:13):
Yeah.
It shows Right.
It shows Right.
Speaker 2 (16:19):
What's your current running net profit based on your
last profit and loss statement?
On the team-based pay businessmodel, there are requirements,
disciplines that an owner needsto embrace to get the full
(16:41):
potential of the system.
The numbers you need to track.
We'll keep saying cash flowplans, cash flow plans.
You've got to look at your P&L.
Is your balance sheet?
Are you getting healthier?
So it's not more work.
In many eyes it's more workthan you've been doing, or a lot
(17:02):
more work than you've beendoing because you haven't been
doing the work at all.
Speaker 1 (17:06):
Right.
So ultimately, it's the workthat needs to get done to run
your business.
Speaker 2 (17:09):
It's the work that needs to get done.
Period, that's it.
Speaker 1 (17:12):
Yeah, Good stuff.
If you would like to have acustom consultation to really
see if any of these myths needto be busted in your business or
if there's anything that we canguide you and educate you on to
do business better in yourbusiness, we'd love to chat.
Neil, thank you for bustingsome myths.
Thank you, Britt, for themention of strategies and the
(17:38):
opportunity for us to be able tocontinue to educate our fans
and the future of the beautybusiness industry.
Thank you again for joining usfor the Beauty Business
Strategies Podcast and we'll seeyou again next time.
Speaker 3 (17:48):
Thanks again for listening to the Beauty Business
Strategies podcast.
If you liked this episode, besure to hit follow To learn more
about how strategies can helpcreate more fun, profit and
growth potential for you, yourcompany and your team.
We invite you to schedule afree 60-minute strategy session
by clicking the direct link inthe description of this episode.
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