Derm Connection
illustration of man on boat using a monocular telescope to navigate ocean waters
by Dr. Cliff Faver
We are currently living in a unique business environment that most of us have not had to navigate before. We are fighting inflation, a shortage of staff and all sorts of post-COVID anomalies. Now, more than ever, you must be diligent to keep your business healthy so you don’t get caught up in some of these fatal changes.

Many businesses did not weather the COVID shutdown; others decided it wasn’t worth fighting for and retired. In turn, we find ourselves with fewer grooming salons, which sounds like a wonderful situation for those businesses that survived, right? However, COVID-19 created a whole other host of issues.

Many people adopted pets during this time because they were at home and either needed companionship or figured it was a great time to add a pet. Many pet owners also decided that this might be a good opportunity to learn how to groom their own pets since they had the time. In addition to that, many employees made life changes that they would not work as hard or be as dedicated to work as they had been in the past. To top it off, we have inflation continuing to plague our costs of running a business. And because of this, many employers are having to go back to work or adding hours to raise enough money to pay their employees. All of this leads me to the concern that we may see another wave of businesses closing their doors for good.

chart showing consumer price index (cpi) since covid shutdown (2020)
Now, all these things are not meant to scare you but to motivate you to be proactive! Of all times in the life of our businesses, this is the time to step up and take charge of your destiny. Uncertain business environments require a strategy for success, so let’s explore some of the critical areas to think about.
number 1
Maintain a healthy fee structure.
Raising our fees is probably one of the most painful things we business owners deal with because we know we will get pushback or complaints when we make the change. The reality is, if we are going to be in business, we have to raise our prices, because each year we don’t, we have less buying power ourselves. If you do not have a good benchmark to work with, I recommend looking at the Consumer Price Index (CPI).

Essentially, the CPI measures how far your dollar goes as a consumer. In the last 10 years, the average CPI has been 2.65% per year, which means your dollar is worth 2.65% less than the previous year. If you raise your prices every year consistently with the CPI, your money/income stays the same.

This tells us that if you haven’t raised your prices by 17% (total) in the last three years, you are going backwards. In other words, if you charged $65 in 2020, you should be charging at least $76 to break even. And if you want to give yourself a cost-of-living raise, you need to double the CPI, meaning that $65 groom would be $87. I know that many (if not most) would say, “My clients would never pay that!” So let me reverse that and say, if you are not making those changes, then you may not be around to help those clients in the future because you just took a 17% pay cut in the last three years.

The key takeaway is to understand that the things that set us apart from the competition are not necessarily easy or without some conflict, or everyone would be doing it. It is essential to look at different ways to enhance what we do to stay competitive in this uncertain environment.
How long can you survive that kind of pay cut? If you are a salon owner, your cost of doing business just went up, but I doubt that you cut your staff wages. So that means you took the total hit of the loss of income.

From having sold my veterinarian practice to a corporation, I will tell you that one of the first changes they make is to right-size your fees. They understand the process, which is where many corporations make their money. They take veterinary practices or grooming salons that are undercharging (and still making a profit) and fix their fee schedule, adding a nice increased profit margin from the start after they buy you out.

number 2
Create a great working culture.
Make your salon a place where employees want to come to work. How do we do that? First, start with quality people. One bad apple in the bushel can spoil the whole bunch. If you have a bad employee, either fix the situation or fire them. Bad clients and bad employees are the quickest way to kill a business environment.

Often, we fret over this decision; we don’t like the conflict and are afraid we can’t find a replacement. But if we aren’t proactive, what usually ends up happening is we lose our good employees because they feel undervalued when the problem is allowed to make their life miserable and it is not addressed.

number 3
Challenge your staff to be better.
The best staff are the ones who are constantly learning and bettering themselves. Boredom/burnout is natural when we have a semi-repetitive career. The best way to solve that is to provide an opportunity to learn something new. Taking staff to trade shows or funding educational opportunities can be your best investment in the future of your business.
number 4
Educate your clientele.
Clients like to have knowledge, especially when it comes to the well-being of their pets. So the more we educate them, the more they feel like they are part of the team and the more loyal they will be to your business.

These are just a couple of ways we can strategically work on creating a healthier business. The key takeaway is to understand that the things that set us apart from the competition are not necessarily easy or without some conflict, or everyone would be doing it. It is essential to look at different ways to enhance what we do to stay competitive in this uncertain environment.

Don’t be afraid to seek out help in this process. Owning and running a business is a skillset in itself, and it never hurts to get advice from or hire someone more knowledgeable to teach us. Hopefully these economic uncertainties normalize soon, but in the meantime, remember to be creative and strategic as we muddle our way through it.

Dr. Cliff Faver graduated with a BS in Biology/BA in Chemistry before getting a Veterinary degree in 1987. He is the past owner of Animal Health Services in Cave Creek, Arizona and now the US distributor for Iv San Bernard products, teaches the ISB Pet Aesthetician Certification program, and speaks internationally on hair and skin. His passion is to merge groomers and veterinarians to aid in helping and healing pets. He is also a member of AVMA, AAHA, AZVMA, Board member with Burbank Kennel Club, and has served on Novartis Lead Committee, Hill’s International Global Veterinary Board, and a Veterinary Management Group.