How to add value through retail offers

Adding Retail to a Grooming Business

By Kristian Maris, author of The Dog Grooming Business Course: How to set up and run your own dog grooming business

Have you heard the one about Fred? He walks into his local supermarket for a pint of milk and comes home with a new TV, a pair of trousers, pet insurance and a lottery ticket. He forgets the pint of milk.

Fred is already a regular at his supermarket and trusts their products and services. So, it’s easy to get him to purchase other things he didn’t know he needed or didn’t know they offered.

In the world of retail, this is called cross-selling.

As the owner of a dog grooming salon, you’ve got customers like Fred. They come to you because they trust the service you provide. If you have a retail offering alongside your grooming, it’s easy to cross-sell to Fred.

Fred’s dog needs to eat. Maybe he needs a collar and a lead. A bed. Toys. Treats. Shampoo. As somebody in the trade, you can purchase retail stock at wholesale prices and then sell them to Fred at retail prices. You keep the difference in price, the margin, as profit.

Kind of a no-brainer, right? You might have 100 customers, maybe 1000. If you now offer them retail products – which is a service they will appreciate because it saves them having to go elsewhere – then you can increase your turnover. That is, you can make more money.

But is it as simple as this? Cross-selling or providing additional services within your dog grooming business is not without a specific risk. If you don’t do it right, you could undermine the ‘core competency’ of your business – your grooming.

If you’re a solo groomer working from your own premises, the time and effort required for cross-selling may have a knock-on effect on your ability to groom efficiently. You might be lucky to have somebody help you - perhaps handling the retail sales and managing your bookings. But you might not have any profit left over after their wages have been paid.

On top of that, in order to offer retail you have to purchase the stock to sell. This requires an upfront investment from you. Not everything sells, so you’ll end up with products that sit on the shelves for a long time before you finally decide to get rid of them at cost, or less.

Moreover, on a regular basis, you’ll need to re-order what you’ve sold. This, again, is time-consuming. It adds to your workload and increases your responsibilities. Most of your re-ordering will be related to food. And your margins on food might not be that great – perhaps a couple of pounds for a 2kg bag. Unless you’re selling big volumes of food, it hardly seems worth the effort.

There is, therefore, an ‘opportunity cost’ associated with adding retail to your grooming. The time and effort required to talk and cross-sell to customers, re-order the stock on a regular basis, put it on display, price it, and keep your retail area clean and presentable. All of this will take time away from your grooming.

Adding retail to your grooming, therefore, needs carefully to be thought out before you start contacting suppliers and offering this. If the time that retail requires means you groom one or two fewer dogs per day, or per week, calculate your lost earnings. Compare this number to your net profit from retail sales. The numbers have to make sense before you get too excited about all the lovely new retail products to offer your customers.

The Hourly Rate Calculator

The hourly rate calculator is an excellent tool for organising your finances; working out the prices you need to charge in order to stay afloat. There are 3 pages. The first page lists a multitude of potential business costs, most of which are invisible to the newbie groomer. There are figures already in place which will also give the newbies an idea of what the annual cost for them might be. Both the costs and the figures are fully editable.

The second page does the same thing for your personal finances. Got kids? Their costs are covered. Not got kids? Add the things you do or want to do. Got a second job? You can add that salary in here too.

The third page is called the Summary Dashboard. This is where the magic happens. You can alter the number of days a week you can work, and the number of hours per day; it will work out your hourly rate. This is perfect for “what if” scenarios. For instance, what if you want to drop a day? Or if your Electric Bill doubles?

Order your Hourly Rate Calculator from www.CentreStageDogs.co.uk