Setting Targets

Setting Targets

I work with a lot of salon owners helping them with different areas of their business.

One point that regularly comes up is how to set targets and then create a motivating commission structure.

Some salons set their targets based on a stylist’s weekly pay.

So if a stylist earns £300 per week, their target could be say, 3 X £300 plus VAT

£900 plus 20% = £1080

This doesn’t factor in prices, time taken or hours worked.

A stylist target should be based on THREE Factors:

  1. Hours they work
  2. Prices they charge
  3. Time they take on each service

If Mary works for 40 hours per week, charges £40 per cut and blow-dry and takes 45 minutes for this service; then her target is calculated in the following way…

First we have to get to her average hourly charging rate:

Cut and blow-dry at £40 divided by 3, multiplied by 4 = £53.33 hourly rate

X 40 hours = £2,133.20 which is her Maximum Potential

This is not considered reasonable or achievable, so we would set her target at 75% of that, which is: £1600 per week.

This would be the figure that we base a higher rate of commission on. For example:

Weekly wage of £300 or 30% of net takings, whichever is greater:

When the target of £1600 is hit: less VAT = £1333, commission increases to 35%

£1333 X 35% = Pay is £467 per week

If the target was based on the weekly pay alone: the target would be MUCH TOO LOW, at £1080, which only represents about 50% of a stylists’ potential.

If you would like help setting targets and pay structure for your salon staff, then contact me now on 07860 651084, or email me at: [email protected]

Simon Harris

To download the PDF version of this article click here!