There has to be Profit in Order to Share

By Jay Chapman

One of the most common questions that I get asked is “How do you set up a target structure for your team that works?” 3.5 Gross wage or 4? tiered or percentages? It’s a huge and confusing topic.

Let’s dive deep today and start with the facts. Looking at the big picture, and all the moving parts of profit share in your business. I will be talking all about the thinking that needs to happen before we even start to look at the “how”.

Firstly, but most importantly, there has to be a PROFIT in your business consistently in order to SHARE it! In order to reward the team with your extra cash, your business needs to be safe and sturdy financially.

You may have put a target system in place prematurely in order to motivate or recruit your team but was this the right time to do so? Hmmm interesting hey?!

Below I have listed my 10 go to themes when it comes to this topic, they are designed to get you thinking and to make sure that you have a careful, considered approach to this part of your business.

1. We need to give our team the PURPOSE

and the WHY. If you’re putting systems in place to boost revenue in one or all areas of your business, your team need to understand WHY this is a measure you have put in place to begin with! When people are connected to the purpose or the why, they are usually much more motivated to move forward.

We need to slow down to speed up! Team are not instantly motivated to work towards a financial target just because you have implemented one.

2. How much time do you spend on focusing on the result rather than the effort behind it?

If you focus on the effort, the results will show up! Results are a by-product of the effort and not the other way around!

When you praise your team with their effort rather than results, you will gain a more consistency, growing performance and results from your team.

3. We need to be careful about plugging gaps with team incentives as this won’t solve a problem long term.

What will fix the problem is creating positivity, teamwork, and a theme of consistency. Remember, go back to the WHY so you have sustainable, long-term results.

Don’t get me wrong, team incentives are an important part of a business. However, it is not the sole answer to get your team to perform to where they need to be.

4. Show up and ours KPI’s.

If we think about our team and what their performance looks like in terms of their KPI’s VS how they “show up” AKA their conduct, attitude, personal presentation, and team contribution, how do they correlate? What do you really want to put the focus on? They both have to be level because one won’t fix the other!

Top performers in KPI’s won’t necessarily be contributing to the salon culture and team in a positive way, and vice versa! Praise and reward both! Many times, I have seen a toxic team member that actually has great figures, a good profit share system can drive growth but will not fix a culture problem.

5. We don’t know what we don’t know! What extra training, skills and knowledge do you need to make a profit share system effective in your business?

Creating a target and commission-based system in your business is actually the easy part, Where the real skill comes into play is in your meeting rhythms and communication. ultimately, this all comes back to your leadership and how much mentoring you provide.

Think of it like this, 10% of your effort needs to be put into creating the structure of your profit share system and the other 90% of your effort needs to be put into how you were going to nurture and lead your team to hit the benchmark.

6. Targets and profit share are fundamentally

different! A “Target” can instill pressure whereas “profit-share” sounds positive and empowering. They land differently! Getting your language right and being meticulous with the words you use can influence your team’s perspective. Replace targets with profit-share in communication with your team. It is a privilege to share profit with your team and the language that you use around this will change how your team view growing their individual revenue.

7. Make it a part of what you do! Incorporate it into the language of every other part of your business. Team meetings, retreats, huddles, 1-1 meetings etc. For profit share to work you need time, effort, skill, and knowledge. If you have a lot of moving parts in your business, wait until you’re ready to implement this you can give it quality and quantity of your time.

I’d like you to consider having this as a constant topic of conversation and how you communicate with your team, make it the new norm.

8. Helping your team to remove barriers,

blocks and limiting beliefs. Our brain will fight for it’s right to stay the same! Some people have this imbedded from birth so it will take time for change to become apparent.

It needs to become a part of their DNA, slowly but surely. Help them understand by leaning into their love languages and values. Finding out what is in your teams’ way of reaching their profit share is only one part of the puzzle, finding out what motivates and inspires them is what will get you the result!

9. If you have not researched the Love Languages, put this on your list today.

It’s a fantastic starting point where you can start to get an idea of what motivates different people, because money alone is often not an efficient motivator.

There’s a lot of online love language tests that you and your team can complete. Like personality profiling, it helps you understand and influence the behaviours of your team.

By helping the team have a better understanding of what is standing in their way and what actually motivates them is a gift! A massive part of my role as a coach is helping my clients identify what is standing in their way so they can move past they’re limiting beliefs and become limitless!

10. Profit is the byproduct of everything that you do!

Every decision that you make in business will either inch you closer towards profitability or not. To understand the inner workings of your business and in-particular your numbers, you need to lean in and get uncomfortable with something that may not be in your flow.

This is always the first place to start. If you don’t like numbers or they confuse you, you most likely have not had them explained to you in a way that makes sense to YOU.

Think about it like this; if you are going to implement a profit share system in your business that entirely is based on numbers, and you don’t have an understanding of your numbers it could be a recipe for disaster.

Before you jump in, do the critical thinking first to save yourself from the heartache later. Ohh…. And get an expert to help you.

For more business smarts, you can contact Jay Chapman at jay@zingcoach.com.au