Re/Setting Your Prices - Clear and Fair [UPDATED]
The Simplest Way to Understand and Implement Time-based Billing
"The price of anything is the amount of life you exchange for it."
Henry David Thoreau
“How much should I charge for…?”
“Am I charging too low??”
“Show me your prices!”
Are you feeling lost when it comes to pricing? Want to get a grip on a simple and fast pricing formula that helps you not only manage your day-to-day operations but also helps you increase your revenue without hiring?
The Two Main Billing Types That WORK
Time-based Grooming Labor Pricing (billed hourly by the grooming services provided)
Flat Fees for Products and Non-time-based Fees (Sell shampoo or adding supply fee to a spa package)
The impact of the billing types you will implement in your business is not only about managing your day-to-day operations but also about supporting revenue growth (yes, all while staying solo, without working yourself to death or hiring anyone). I’ll explain.
Most software makes day-to-day operations sort of manageable -not easy- and does not extend to support you in substantial revenue growth.
Let’s see which billing method will help you with both, the day-to-day operations being slick and substantial revenue growth without giving up your solo setup!
1. Grooming Labor Pricing
Time-based grooming labor pricing is the winner from every aspect. It is the simplest, fairest, and clearest pricing there is to everyone, the groomer, owner, and even the dog.
Doing professional grooming takes learning, practice, tools, supplies, and a place to operate -even when you are a home-based groomer, which all costs money.
I have a full blog post on comparing billing methods with pros and cons if you want to dig deeper and don’t just want to take my word for it.
Some might say
“You can groom at least 3 small dogs in the time it takes to groom a large dog.”
If grooming a large dog takes as long as grooming three small ones, but we’re not charging the same, we’re losing money. It’s like there’s a hole in our billing, and cash is slipping through it.
We just described the essence of time-based billing to get paid fairly.
Regardless of breed, size, weight, behavior, desired haircut length, style, and other variables that we use to guess the time it takes to groom a dog we work with, it’s only fair if we charge by the time it takes to complete the grooming.
Some might say
“What if it’s nail trimming only but took me 30 mins?”
If a nail trim takes longer than the usual 15 minutes, because of say behavior, here is how I’d break down the time-based pricing.
In Layman’s terms, with a simple hourly rate calculation, if you charge $60 for a small dog’s all-inclusive package that takes 1 hr, then, your hourly rate is around $60.
So with that math, a 30-minute nail trim would be $30.
Nail trim - 15 mins $15
Additional time needed due to behavior - 15 mins $15
Plus TAX
It honors your expertise, time, and efforts. And if it’s too much for your client, then that’s their sign and a good motivator to get their dogs desensitized to the procedure or find a new groomer who is willing to put up with extra work but for no extra pay.
Some might also say
“But what if it’s a large doodle?”
The answer is the same, the price is based on the time it takes to complete the requested services.
List the services/packages
Estimate/Track the time they take
Multiply the total time by your hourly grooming labor rate.
Say the doodle takes 2 hours to complete a full-groom.
The Works - 2 hours
Face, Feet, Fanny trim + Nails (30 mins)
Full-body hairstyling (30 mins)
Bath & Towel drying (30 mins)
Hand blow-drying (30 mins)
They bring a dog full of energy, and the dog does not collaborate very well due to its energy level.
Suppose you manage to finish the trim, but it took 15 mins longer.
Here is how to explain the extra costs without the client feeling gypped.
You can provide clarity and get paid by slapping an “Additional time needed due to energy -15 mins” on the bill.
If they want to skip that extra cost next time, you can explain that if they bring a well-exercised dog, this additional cost won’t be necessary. They’ll be motivated to do it and the reminder will sit on the invoice for them to keep in mind. You can also set your clients up for success by including a reminder of the importance of a well-exercised dog in the appointment confirmation email and the appointment reminders you send out.
Say you couldn’t finish the trim due to behavior.
How much should you charge? You certainly can’t let them go without paying, you could do the FFFanny and the bath and towel drying parts. But the dog flipped at the sound of the dryer, so you chose to not continue.
To come up with a fair and clear number, you just modify the order and charge for the FFFanny trim (30 mins) and the bath and towel drying (30 mins) parts, which took 60 mins total. This provides clarity so neither you nor the client feels “cheated”.
The Holes In Flat-rate Billing
Many groomers don't realize they are undercharging. Let’s take a look at how control slips out of our hands with just eyeballed, flat-rate grooming package pricing!
If you look at the flat-rate price list below, you’ll see the packages grouped and named by the weight of the dog. To the right, you see the flat fees for each dog size, including the time they take and how those numbers would look at an hourly rate.
Bath and Full Haircut/The Works/All-inclusive
Under 10 lbs: $60 for 60 mins = $60/hour
10-25 lbs: $70 for 60 mins = $70/hour
25-40 lbs: $80 for 75 mins = $64/hour
40-60 lbs: $90 for 75 mins = $72/hour
60-90 lbs: $110 for 90 mins = $73.33/hour
Over 90 lbs: $130 for 90 mins = $86.67/hour
Bath and Brush/Bath and Tidy
Under 10 lbs: $35 for 30 mins = $70/hour
10-25 lbs: $40 for 30 mins = $80/hour
25-40 lbs: $45 for 60 mins = $45/hour
40-60 lbs: $50 for 60 mins = $50/hour
60-90 lbs: $60 for 90 mins = $40/hour
Over 90 lbs: $70 for 90 mins = $46.67/hour
Standalone Services
Nail trim or grind (10 mins): $15 = $90/hour
Nail trim and grind (10 mins): $20 = $120/hour
You can tell by just a glance, that the flat fee does not increase at the same rate as the time it takes to groom a dog. Indicating, that we are off the charts quite a bit price-wise, and money is not falling in our pocket at the rate that sweatdrops fall from our foreheads. The most revealing part is when you check the bold numbers at the end of the lines, isn’t it?
Funanalytics
The lowest hourly grooming labor rate is for the Bath & Brush service for the 60-90 lbs weight range, where the grooming labor rate is 40/hour.
Many groomers translate this revelation as “It isn’t worth grooming big dogs.” If you read between the lines, it means we are not charging enough for the services we provide.
The highest grooming labor rate is for the Nail trim and grind service, which sits at the $120/hr grooming labor rate.
The average hourly grooming labor rate across all services is approximately $77.32/hour according to ChatGPT. :D
Quite the differences, hah! Think of the workload for each of those. Even more difference there according to my back. Haha.
Based on this your business would thrive best if you did nail trim and grind only, all day every day. Let’s play with this, shall we?
Doing only 1 hour of nail trimming and grinding you'd earn what you’d earn in grooming two, <10 lbs dogs for 2 hours.
You would earn the same by groom for approximately 6.5 hours per day at the average rate of $77.32/hour and also 4.2 hours per day at the nail trim rate of $120/hr.
That’s over 2 hours freed up from your workload all while earning the same amount. Quite impressive, isn’t it?
And if you asked who does nail trims only, there are groomers out the who do and they even have a Professional Pet Nail Specialists Facebook group with over 800 members. :D
Balancing Out Workload and Income
But back to the importance of charging hourly. Why is it a big deal?
Grooming large dogs at such a low rate as above will get you burnt out incredibly fast or even injured and out on unpaid sick leave (ask me how I know LOL). Thanks to those aforementioned holes in the price list, overwork will even leave you without a substantial difference in the piggy bank to support your family, adventures, and dreams.
Yes, it might keep your business afloat, but it won’t support you at a remarkable scale.
It is possible to have funds to not only pay your bills but also to support your “Bucket list budget” and even fatten up your retirement funds as well.
Ever wondered how much your paycheck would be for the week? When you switch to time-based billing, your revenue for the week could be super easily calculated and shown in the calendar. So what? So you’d see your projected income day-by-day for days/weeks/months in advance.
With that clarity on your projected income, you could cap your daily workload when your desired projected income for the day is scheduled.
Getting the hang of charging hourly
There are multiple ways to go about calculating your hourly rates for your current flat-fee-based services.
To get the hang of and a feel for hourly billing fast, we’ll need a close enough hourly grooming labor rate number to work with.
We’ll use the price you charge for your 1-hour, small dog client price for the All-inclusive package (The Works, Full Groom, or however you call it).
So if your 1-hr All-inclusive groom for small dogs goes for $60, then $60 is your hourly grooming labor rate for now!
Again, there is a lot more to calculating your real hourly rate, but for the sake of ease, let’s roll with this one for this example.
There’ll be a whole new post about advanced and more accurate methods to determine your base hourly grooming labor rate and even the desired one if you are charging too low and want to earn more.
Time-based billing of clients
The good news is that you don’t need to stand by your table with a stopwatch in your non-dominant hand, nor need to whip out a notepad on the table to track time.
Most of us have regulars and the dog’s grooming takes the same time for all grooming steps/packages with minimal differences. You clock in and out when you start and finish the job, and you roughly divide the time it takes for each service in the package/single service. Done.
Time-based billing of clients on paper
See the step-by-step workflow below!
List the grooming services the dog gets
packages/services requested/needed
add-ons
Estimate/Time the grooming labor
Face, Feet, Fanny for this dog: 0.5 hours (30 mins)
Brush out: 0.25 hours (15 mins)
Multiply the total time of grooming (hours) by your current hourly grooming labor rate (that we set at $60 above).
Here it’d be 0.75 hr X $60 = $45 for your 45 mins of grooming labor.
You got what you needed, but you just spent several minutes writing everything up.
Time-based billing of clients with the right software
If you value your time with family/friends/or simply resting more than to exchange it for time-consuming and error-prone manual methods of billing clients, using the right software is the fastest way to add time-based services to an order.
You click the Add button for the chosen package and the software does all the listing, timing, and calculations for you.
My favorite one that does this in great detail is the Pet Groomer App.
See how it looks in action below!
Confident and fair pricing for groomers
Have you ever asked these questions?
How much should I charge for …?
Am I charging too low?
How should I explain the extra time/additional price so my clients won’t feel gypped?
How should I explain my new price so my clients won’t feel gypped?
The answer to all of the above is providing an itemized invoice.
Complaint-free level of clarity for clients
Who’s tired of hearing AND answering:
“Why did it cost more today than last time?”
“But my dog is NOT LARGE!”?
“How much do you charge to touch up the head only?”
“THAT much for just a "wash?” (bath, brush out, wash, blow-drying)
“What’s included in the All-inclusive package?”
The answer to this is providing an itemized invoice.
Itemized Estimate/Invoice Example
When you provide an itemized estimate/invoice, you not only provide clarity, but also show professionalism. So what? So you will know without remembering what you did for future reports on business revenue/profit. It also comes in handy in case of a not likely but still possible dispute with an owner.
With the help of an itemized invoice, you also set your business and clients up for success without setbacks, like misunderstandings on price or no-shows. You also weed out the hard-core bargain hunters since they’ll see that they won’t be able to pull one on you because you came prepared for the game.
Itemized invoices have so many perks that are worth their own blog post.
Let’s look at how a groomer’s itemized invoice could look like.
Top Tip
If you name your packages by the services provided and the time they take “All-inclusive, 120 mins” (not the dog’s size or weight “All-inclusive - Large”), you’ll never hear again: “But my dog is NOT LARGE.”
Have your clients answer their own questions
If you provide an itemized estimate/invoice, your clients can answer their own billing-related questions when it comes to invoices. So what? So say after a price raise or asking for different services and being charged more, they can compare the two invoices in questions and answer them, without even reaching out to you. No more playing a parrot and answering the same questions on repeat via texts, and phone calls, and managing unwanted delays in your lunch break, at the pickup causing delays, or after work.
I can’t tell you how many times I faced questions like “Oh, so if I want a haircut not just a bath you charge more for that?” before adopting itemized invoices. After adopting itemized invoices? Barely ever.
We need to face the fact that clients brand new to grooming or socialized on the one-liner, flat-fee billed services “Grooming $60” or “Bath and Tidy $100” just don’t know much about grooming and billing, what’s included in which package, and they need to learn about it.
We groomers, for sure know more about billing than clients, so we’d be the ideal candidate to explain to them that yes indeed, more services, mean a heftier bill or what’s included in the all-inclusive package.
I suspect you agree with me on the following, that we don’t have much time to teach cleints about this and it’s not something I’d like to do in my free time after work, for free anyways. But it still needs to be done, otherwise these questions will pop back up again and again.
An itemized invoice is the perfect “resource-friendly” tool to save your time and sanity and to educate your clients, all at once.
When we clarify what we provide on the estimate/invoice, we not only show value but also educate people about what their dog needs and show clearly the costs of each item.
You’ll bring clarity, fairness, and ease to the game for both of you, minimize billing-related customer service, and even drastically lower, more like eliminate no-shows since people will take you more seriously with a professional-looking estimate/invoice.
When we list “Grooming $…” on our invoices, neither we nor the clients see “what got done”. Nor the value in it think of hand blow-drying vs. "cage drying” which is a big deal if you want to earn more and work less.
From eggxausted to eggcited - Value vs. Prices
Think of the price of eggs. Conventional eggs cost less. The moment they have labels like cage-free bumps the price a bit, and so does free-range. Pasture-raised costs even more and when they slap the organic there right along with it, you find yourself paying a premium price for premium eggs. Both are eggs, are in a shell, and have whites and yolks, but the value the healthier one delivers is worth it to folks to pay over double the price of the conventional eggs.
Batch drop-off and caged all day vs. exclusively one-on-one is an example of high-price positioning techniques to earn more and work less in the grooming world. You can charge a lot more per hour for your grooming labor and work in a much calmer environment on a much calmer dog.
Join the compared-by-value game, not the price war
When you provide an itemized estimate to your client prospects, you give them a pretty and effective tool they can advocate with to the financial decision-maker of the family on why to choose you. By showing your value, you don’t let your clients compare prices from different grooming salons on their shortlist.
You enter the game of comparing by the value they seek, so they can’t simply choose the cheapest one. If they see the value you provide instantly, they’ll be much more likely to choose you over other salons. Even if you have higher prices. To some client prospect groups, you need to aim high enough to be even taken seriously. If someone asks $50 for a designer bag to sell you, you know that that’s not a genuine designer bag.
Some might say
“This itemized invoice thing seems like a lot of headache and paperwork that takes a long time.”
I agree, that if you do all this in Google Sheets or on paper, those are incredibly time-consuming and error-prone methods.
But in today’s technology, there are grooming software out there that are built for time-based billing.
Better yet find a software that supports all three of the holy grail of billing methods:
time-based
client tiers
itemized invoice
and allows you to create an appointment with a few clicks, and do all the calculating and formatting for you.
Hint: The only software currently on the market that supports all three of them is the Pet Groomer App.
2. Flat Fees For Products/Fees
Physical/Digital products and non-time-based fees
Flat fees are perfect for physical or digital products where time is not involved. Think of selling shampoo or a supply fee, where we don’t track the time you just want to get your expenses covered and make a profit.
Late pickup/drop-off fees
Though they are named fees, Late pickup/drop off fees are different, they are still considered a time-based service.
Charging flat fees for late drop-offs/pickups will teach your clients that it’s OK to be late. Charging by the time for late drop-offs or pickups helps them understand that you’re not a daycare.
Top Tip
I keep late drop-off/pickup fees as a last resort though, and I like to set my clients up for success and clarity by including a drop-off and pickup time in the confirmations and reminders. There are other tweaks to prevent the need to apply these fees, but that’s another subject for a whole new post/podcast.
Stop Selling Yourself Short!
When we shy away from “higher prices” and settle for say $100 like here above for a large dog, it often happens because we don’t charge hourly and we don’t have clarity on how to find our sweet spot for your hourly rate.
As a result, we gauge the price tag to our own budgets and sadly, more often than not, that means aiming way too low. Therefore, we are actively killing our bodies and business with kindness/shyness and end up in the vicious cycle of being overworked, overwhelmed, and underpaid.
Stop the cycle
Instead of selling yourself short, determine your sweet spot hourly rate, start billing hourly (consistently), and enjoy getting paid for your hard work fairly.
It’s an incredibly simple, easy, and satisfying way out from the pressure caused by flat-fee-based billing.
Your Sweet Spot Hourly Rate (Tier 1.)
Your sweet spot hourly grooming labor rate is your flat-fee billed packages converted to an hourly rate. It’s your comfort zone rate for steady revenue. You can also think of it as your current base rate aka “Safe space rate” or “Client Tier 1.” as the main source to generate revenue for your business with their willingness and ability to pay higher prices for higher value services (one-on-one, natural products, etc.).
The Bold Rate for Ambitious Growth (Tier 2.)
The beauty of hourly grooming labor rates combined with tiered pricing is you can have a “more ambitious hourly rate “Tier 2.” for new clients that helps you not only control your new client flow (without the need for a waitlist and losing money) but also to grow your revenue substantially, by pitching to different client prospect groups with more resources to support your business.
Here is one of my most popular insightful blog posts on Barking up the right tree - Client prospect groups.
Your Giving Back Rates (Tier 3+, etc.)
Once your business can support itself and you feel like giving back, you can create “discounted rates” like “Students”, “Retired”, or “Rescues”, etc.
This way you can track your revenue and ensure your business is sustainable before you support others.
Two Choices
Ignore the new insights and continue as is.
Take control and adjust your pricing.
Embrace the change and shine with newfound confidence! The choice is yours to make.
If you feel like checking out how easy it can be to go from flat-based to hourly billing, this next session is about that.
Going from flat-based to hourly billing in action
When you first heard about hourly billing you might have felt confused or even worried about this weird new kid on the block. Getting this far and learning so much about it already, I suspect you might feel curious now, or maybe even excited.
Brace yourself because after you see in action how simple it is to transition from flat-fee-based grooming to hourly rates, you’ll be dancing on the rooftop!
The simplest way to convert to hourly rates
It takes three, simple steps.
I’ll demonstrate with the help of the Pet Groomer App scheduling software that specializes in hourly billing, for home-based groomers.
Have your price list ready!
Step 1.
Add/Import your price list to the system
Import
The most convenient way to import your services/packages in the system and set them up with the linked-in services in packages feature is to have the Pet Groomer App team do it for you.
All you need to do is share your packages, prices, and their time with the PGA team, and they’ll import them for you.
Adding manually
You can manually add all your packages, and services, set their time and price, and convert them to be time-based services. You can even create the linked-in connections for the packages for a super quick price update at your next price raise.
Add your current, flat-fee-based services/packages to the Pet Groomer App system.
Package/Service name
Flat-fee-based price
The time they approximately take
Here is an example.
Step 2.
Your “sweet spot” hourly rate is client Tier 1.
It’s time to add your hourly rate to the system, so it can do the math for you. If your sweet spot number is $60/hr, then your Tier 1 rate is $60/hr.
Create a new tier, and add your sweet spot number.
Naming your Tiers
I like to add the day the tier is active, so you can also add that right after the tier if you want. Like Tier 1. (before 10/21/24), I need notes to remember stuff, especially numbers. Haha.
I’ll have another blog post on just tiers, how to use them to raise prices with confidence (multi-tiered billing), trackable discounts, etc.
Tiers are your allies in growing your revenue without expanding (hiring people) or working insanely long hours and can also help us give back to our community without making the business swim in red ink.
“Extracurricular” Tiers
You can skip this step if you just want to go with one tier for now!
Bold Rate
When you are pitching to different (higher client prospect groups), you need to match the price to the value you propose to them. They need their own client tier.
If you want to add a “Bold rate” as well for funsies, add Tier 2. with your desired higher rate.
Discounted Rates
If your business can support you by giving discounts (lower rates to different groups of people), you can add that rate and name them as different tiers like Students/Retired/Military/Rescue Org./etc. This way you can track your revenue and your discounts to make sure your business is sustainable.
Step 3.
Now comes the 2-click magic!
That’s it! Done. Now your old services look familiar but are updated to be time-based for fair charging. :) I bet you thought that it’d be like astrophysics level tricky.
To gather loads of data from the calendar, you can color-code your services/packages. In the example below, the different color shades suggest the type of package and the shade clarifies the size of the dog/duration of the grooming.
Give it a test run in the software!!
Here you see an example of creating a time-based, itemized invoice for a $60/hr client tier rate with one click in the Pet Groomer App software.
As you choose the service, the system will auto-populate the time and price for you with 1 click.
And it’ll show up in your calendar with the proper duration (eg. a 2 hr spot as a 2 hrs by default), so you don’t need to adjust anything. (You can drag the bottom to adjust the slot if you need to though.)
See the color coding? You’ll know what services you have in the calendar just by looking at the colors on the left side of each appointment. Isn’t it pretty?
That was it! :)
All converted to time-based billing. Now, you can start charging your clients and get paid fairly for your hard work.
What’s next?
Raising prices with ease and confidence
When it comes to raising your time-based prices it’ll be a matter of a few clicks to update a client tier’s price.
Remember how you updated your flat-fee-based services and packages? You had to manually go through them all and set the price of every single service.
There were times I rather keep my lower prices just so I wouldn’t need to go through that headache of manually updating my prices again. I was looking for relief and not resolution. That ain’t business management.
I remember back in the day the misery that came over me even just thinking about raising prices on softwares that didn’t support time-based billing.
These days, with the Pet Groomer App? I feel confident and even excited when I overcome a higher “Money block” and launch a new client tier. I managed to work up my grooming labor rate to $200/hr. Here is how I did it!
Got a waitlist?
Swimming in new client requests? Do you have more new clients wanting a haircut than you can fit in? Maybe even to the point when you stopped taking new clients and even have a waitlist?
If so, and you’re ready for a significant raise without risk, launch your Tier 2. rates in confidence! Raise your prices at different scales and control your new client flow.
Cold feet from hourly billing?
You might say
“I like my flat-fee-based billing, but I want to adopt client tiers. Is that possible?”
It is possible, but not pleasant. How so?
You’ll need to duplicate all your services and packages, rename them to distinguish the Tiers, and then set the pricing for the new tier(s).
Most of us have more but say you have only 20 services/packages. You need to multiply them by the number of tiers you’d like to create. At two tiers that is 40 services/packages to manage/rename/update price on/etc.
Say you’ll pull it off. When you’re raising your prices to those tiers in a year from now, guess what you’ll need to do? Again!! Set the names, and prices, for all tiers, again. I think you can see how time-consuming and error-prone that is. And how easy it is to adjust your hourly rates/tiers with a click.
I think by now you have come to the same conclusion about how much flat-fee-based pricing is in the way of generating more revenue.
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