*This is a Guest Post from Beyond The Technique
What is an education fund? Above all else, it’s a solution to the excuse: “I don’t have the money.” In the beauty industry, we know that education is everything, so you should always be encouraging and supporting your stylists to get better. But, we also know that advanced education comes with a price tag—which is exactly why you need an education fund! An education fund allows for a consistent and fair approach for each of your stylists to take advantage of advanced education opportunities. Here’s what we do at Be Inspired Salon in Madison, WI.
The Details
At Be Inspired Salon, our education fund is driven by retail. That’s right—another reason why retail is so important for a salon and stylists’ success! At my salon, a stylist’s education fund is filled up based on the commission they earn from retail sales. Instead of this commission going into their paycheck, it goes right to their education fund. How sweet is that!
We give every stylist a baseline 10% commission on the wholesale cost of each product they sell. So, you might be wondering what the incentive is for a stylist to be awesome at sales and build up their fund. Well, here is that incentive. We also offer bonuses that go on top of their commission.
Here are the two bonuses that we offer every month: 1) if in the month, you have 19% or more of your total sales from retail, you’re entered into a drawing to win $50 cash! 2) If in the month, you have 23% or more of your total sales from retail, we give you an additional 10% of the wholesale cost, and the stylist can choose if that goes into their education fund or paycheck. These two simple—and fun—bonuses give everyone an opportunity to go above and beyond to build their education fund. What is even more fun is that we announce these bonuses at our team meeting which allows our top producers to receive recognition for their great work!
Show Me The Money
There are some administrative-type tasks that are required to successfully implement an education fund. Although these steps might be different for each salon, it’s worthwhile to consider them before you have to learn the hard way.
Within your POS system, you should have the option to pull your total-sheet—it’s probably called something similar to this. Basically, this report will display everyone’s retail percentages. Then, I transfer these numbers to an Excel workbook. For our record-keeping system, every stylist has their own tab, and we track each month of their year. Then, this Excel sheet acts like a check register; it shows each stylist’s fund total and their debits for any classes, travel, and lodging that they need.
We do allow our stylists’ education funds to rollover from year-to-year. This is especially helpful for our new stylists who need some time to build up their fund in order to afford some higher-end classes. However, if a stylist leaves or is terminated, they lose all of their funds that they haven’t used.
Here’s my final piece of advice for salon owners. If you haven’t had an education fund before and you’re just getting started, it’s going to feel great to see all this extra money in your checking account. Naturally, you start thinking about ways you can invest those profits back into your business. Well, I highly recommend that you transfer the education fund money from your cashflow into a savings account every single month. Otherwise, your stylists will come to you to pay for a class, and all the money that you’re supposed to have is gone because you invested it into new equipment. You don’t want to make this mistake! The bottom line is to make sure that you’re keeping up with the required administrative tasks.
With an education fund, our stylists are highly motivated to say yes to more awesome advanced education classes! I bet your stylists will do the same! If you have any questions about implementing an education fund at your salon, please do not hesitate to contact me!
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