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Chapter 4: The Financial Abundance Factor
By: Jamie Scalise
Posted: June 16, 2009, from the July 2009 issue of Skin Inc. magazine.
page 7 of 19
Thirteen week/3 month (quarter): $4,160 in additional income
calculation: $320/week x 13 weeks = $4,160
One year: $16,640 in additional income in Shauna’s paycheck
calculation: $4,160/quarter x 4 quarters = $16,640 - or -
$320/week x 52 weeks = $16,640
HOLY CRAP! If she averages a 30% increase in upgrades in our hypothetical example, in one year Shauna will earn an additional $8,320 in income, and at a 60%, upgrade average, which IS doable as I’ve proven, she would earn a staggering extra $16,640 in her paycheck!
What about Tips?
And here’s the kicker – this calculation doesn’t even take into consideration the additional TIP revenue Shauna would bring in, so let’s have some fun and add in a conservative 12% in additional tips based on her extra revenue from allowing client upgrades.
Additional TIP calculation:
$ 8,320 x .12 (12%) ~ $1,000
$16,640 x .12 (12%) ~ $2,000, so…
EXTRA INCOME FOR ONE YEAR @ A 30% UPGRADE AVERAGE: $9,320
EXTRA INCOME FOR ONE YEAR @ A 60% UPGRADE AVERAGE: $18,640
And remember, the spa owner is making even more profit than that for in our example, as it was set up and agreed upon, the spa was getting 60% of the additional income from Shauna’s efforts of allowing clients to upgrade, and she was getting 40%. Are we all happy now? OK, we can hear the owners asking for their exact numbers based on this example, so read on…
The Owners Cut
Below is a fictitious example that does not reflect anything but income possibilities based on various percentage upgrades using our ‘bonus’ program numbers from above.
Here we are going to do “extra” profit projections for the Spa made possible from Shauna’s efforts (one provider), as from this example begun earlier, we’ve agreed on a bonus system assuming the Basic Facial as our base facial performed. So again, what we are calculating here for the spa is all “gravy” profit on top of, and in addition to what the Spa would have made if Shauna did Basic Facials all the time, which unfortunately can often be pretty close to reality.