Are you still running a commission-based salon?
You’re not alone—but know that you’re also not the only one considering making the switch to team-based pay.
Mark Gonzales, owner of Mark Pardo Salonspas, is all for team-based pay. Aside from being a five-location salon owner, Mark is also the CEO of the Aveda Institute in New Mexico, a member of Intercoiffure and the 2 to 10 Project and a certified business strategy coach.
Mark is so proud of the team he’s built at Mark Pardo. With five locations, their bond has never been stronger, and Mark says that camaraderie is due largely in part to his team-based compensation system.
There’s No “I” In Team
Mark Pardo salons started as commission-based salons, which is still perceived as the standard operating compensation in our industry.
Mark ran his salons this way for years until he stumbled across an article that explained that any challenges you’re facing based on your operational systems often stem from the conditions within your salon. Commission-based compensation leads to an “all-about-me” mentality instead of fostering teamwork and a shared sense of creativity and support.
Mark decided to do more research on team-based pay. He learned all about financial literacy and how team-based pay makes your employees more aware of how they can make a difference in their business--how they can contribute.
It’s All About Changing Your Mindset
People tend to perceive change as a negative experience. They view it as loss, something that comes with losing a perk or privilege they once had.
Mark, on the other hand, has always seen change as an opportunity, and it was his leadership and influence that enabled him to convince his stylists of the positives that came with the switch to team-based pay.
As a stylist, choosing to work in a salon environment instead of renting your own booth already says something about how much you value having that community, that support system. Mark decided that it was time to remind his stylists of the bigger picture--that they belong to something bigger than themselves, they’re a part of a team of people dedicated to serving others and growing in their individual careers.
Time to Level Up
Mark and his team incorporate tips as income. His new employees usually start out around $10 or $15 an hour depending on how well they’re performing within the salon and the system evolves from there.
There are five levels of stylists and your ability to move up depends entirely on your performance and your ability to hit or even exceed your benchmarks. These include stats like client retention rates, average product per service ticket, pre-booking rates, the cut-to-color ratio, etc. All of which contribute to a stylists ability to advance and earn more compensation.
In addition to this system, Mark instituted a bonus system within each individual level that allows them to make anywhere from $150 to $300 more every two weeks in order to keep the momentum going.
Hourly All the Way
Although commission-based compensation was controllable, Mark never saw it as a motivator. With commission, there is a certain limit that salon owners simply can’t surpass while still maintaining a profitable business. So, your staff settles because they’re under the impression that they’ve reached the top and there’s no way for them to make more in the same number of hours.
Of course, payroll is the biggest cost in any business, so it still has to be controlled and maintained in a healthy way. But for Mark, this came easily with team-based pay.
With this new compensation structure, Mark is able to make sure that his stylists are making a living, his salon business is, in fact, profitable, and he’s able to provide his team with the luxuries that make such a system sustainable, like health insurance, dental care, paid time off--you name it.
Three Is Easier Than Two
Mark can’t help but chuckle when he thinks about the old saying his mentor, Juut Salon Spas’ David Wagner, used to mutter. “Three is easier than two,” he would to say, suggesting that owning and operating three salon locations was actually easier than two, or even one for that matter.
For years Mark shrugged off this suggestion with a laugh, believing that in no way that more could ever be easier. Of course, eventually Mark opened location number three and realized he couldn’t have his hands in all of the action anymore.
Instead, Mark found that he had to learn to let go and trust that his leaders could carry his brand without him just fine. Then, Mark was able to step into his larger responsibility, which was to coach and support leaders who would ultimately take care of his legacy and proudly begin to make their own.
Now, Mark is the proud owner of five Mark Pardo Salonspas and he’ll tell you that it is, in fact, much easier to manage all five locations now than it was when he first opened location number one. Why? Because his employees truly care about the longevity of their brand and the success of their teammates--they’re all in it together.
Want to learn more about Mark and his incredible group of Salonspas? Listen to the podcast that inspired this blog, episode 190. Will you be at Intercoiffure this year? Direct Message us on social or shoot us an email and let us know, we’d love to meet you!