In this episode of “Bella In Your Business”, Bella discusses whether you should still offer overnights if you have to pay per hour? This is a hot topic because during this election year many are talking about raising the minimum wage, in some places as high as $15/hour. In California, not only is the minimum wage being raised but they are mandating sick days and other things which are really going to cost businesses more and more money.
Education is Key to This Decision!
Bella emphasizes that you really need to educate yourself on the legislation in your particular state, what risk that implies for your business, and what it will cost your business to comply. She says she really wants you to focus on the right team members (bookkeeper, CPA, lawyer) and to reach out to your state’s Department of Labor. Learn as much as you can and then make your own educated decision. Don’t listen to everyone on Facebook or your competitors! Just because someone else elects to take one action doesn’t mean it’s the right one.
So, should you still offer overnights? The easy answer for some will be no because they figure if they have to pay someone $15/hour for 8-10 hours, they would have to charge at least $200 for an overnight and they believe their clients would never pay that. Bella points out, that could mean you are automatically giving up (what is on average) 20% of your revenue. In short, she recommends that you still offer overnights even if you have to pay per hour.
Put it on your website (with or without the price) and make sure you price it according to the 30/30/40 rule (30% for the business, 30% for you, and 40% for wages). Just be aware of what happens when you get to 40 hours (another great question to ask your state’s Department of Labor).
Remember, you don’t get to decide what is too expensive. Your clients do. If a client does tell you it is too much, simply explain why it is that high. Then offer them a less expensive alternative like 3 visits a day. Let them know that it will probably be alright but if they feel that still isn’t enough then they could try the overnight option.
How To Sell Overnights:
Bella points out that if you don’t at least offer the option then visitors coming to your site looking for that option will “bounce” over to another service’s site. Leave it on there. Keep them on your site. Engage them in a conversation giving them the reasoning and statistics and let them make the decision.
Another question to ask your state’s Department of Labor is whether or not you are exempt from the minimum wage due to the Fair Labor Standards Act (FLSA) which states that people who make less than $500,000 don’t have to adhere to it.
You could also consider additional value for these overnights like perhaps sending video and photos. You might include things like taking out the trash and/or sorting the mail. Add value to the overnights and make them exclusive benefits. Any of these additional values can help make a client feel better about spending the money.
Bella points out that in reality most pets are perfectly fine sleeping by themselves and that the real benefit offered in overnights is making the client feel less guilty about leaving their precious pet. So let’s appeal to them and keep offering this service. Because if you don’t you have no idea just how much money you might be leaving on the table and walking away.
Transcript:
This is episode 17 of Bella in Your Business.
Welcome to Bella in Your Business, where Bella will discuss anything and everything about your pet sitting business to help you land on target. So get ready—Bella’s got your chute. Let’s jump. Welcome to Bella in Your Business. This is a podcast for all pet business professionals, highlighting your questions and giving you resources to make the most of your business.
I invite you to leave me some feedback on iTunes or Stitcher, and if you’re listening on one of those platforms, I encourage you to subscribe so you can always know when there’s a new episode. The show’s format is simple: one topic, about 20 minutes, chock full of ideas and motivation for you to use and think about in your business. I’m Bella Vasta, the founder of Jump Consulting. Why Jump? Well, starting or expanding a business is much like jumping out of an airplane, and I have your chute.
So let’s get into the topic. Today’s topic is a hot one. It’s something that is going to vary across the different states in the country, and it’s something that I really want you to call your state Department of Labor and talk to them about. And then when you hang up, I want you to call them again and again, and I want you to see all the different interpretations that you get. And then I want you to think about it or pray about it and figure out how much risk you’re willing to take.
The topic for today is: Should I still offer overnights if I have to pay minimum wage? And the reason why this is such a hot topic is because during this election year, everyone’s talking about raising the minimum wage. In Seattle, they already have plans flirting with $15 an hour. And when you look at our pet businesses, that’s going to have a major effect. In California, their minimum wage is also being raised and they’re also mandating pay for sick days and a whole bunch of other things. It’s really going to start costing businesses more and more money.
So it’s really important for you to understand the legislation in your own state because it’s state-mandated. And you also need to understand what that risk implies for your business and what cost it means for your business. So I really want you guys to focus hard on attracting the right team members—meaning bookkeepers, CPAs, lawyers, calling the state DOL, Department of Labor. And I don’t want you to be fearful. I want you to be a sponge. I want you to absorb everything you can, and then I want you to make your best own educated decision.
What I don’t want you to do is listen to everybody on Facebook. I don’t want you to listen to your competitors or people around in your city because just because someone’s doing something a certain way, it does not mean it’s the right way. And I would hate to see you make an uneducated decision and then have to pay for it down the road because you thought that’s what the Joneses were doing. So today I want to encourage you to seek out the information you need, figure out if it’s something that will work in your business. And for today, we’re going to talk about the abstract: should I still offer overnights if I have to pay minimum wage?
Here we go. So the very first thing is “no.” That’s the most popular one—absolutely not. I can’t pay someone $15 an hour for eight to ten hours a night for an overnight—hell no, in fact, right? People say it’s too much, I’d have to charge my clients way too much, they wouldn’t pay for it. Just let go of roughly 20% of revenue you create by simply offering it. Basically, I see overnights being roughly 20% of most pet sitting—not dog walking but pet sitting—businesses’ annual revenue. And so if you were to say no, all of a sudden you would be down 20% in revenue. That’s what I see. Maybe it’s different for your business.
So my first question I would ask you is: how much revenue is your overnights worth in your company? I would also encourage you if you say, “No, we cannot offer overnights because we’d have to charge people too much,” I would ask you, what about the clients that are spending $500 a night on their hotel room? Do you go to the Four Seasons right now? It’s going to be pretty close to that. So what’s $200 a night for their precious baby to be at home? And what about all these people that—they’re not even making a conscious decision. It’s not about money for them. It’s about their own conscience. It’s about their guilt trip. They are paying not to feel guilty on their trip that their dog is all alone in their big house at night.
So if you’re one of those people that say, “If I have to pay $15 minimum wage, there goes my overnights,” I would still offer it. You can still put it on your website. You don’t necessarily have to put the price. You can wait for people to call you, but I don’t think that you should not offer it. The people that might say yes, or the reason why I say yes, you should still offer it, is because the ones that say you wouldn’t make any money off of it—that’s because they don’t have the right pricing structure.
If they are charging $100 a night but they have to pay $90 a night for minimum wage or something, that would be a six-hour overnight, right? Then yeah, you’re not making any money. I get it. But if you use the 30-30-40 rule, which is 30% for the business, 30% for you, 40% for wages, and you adjust the price that you’re charging and you examine the amount of hours you’re offering in overnight, you definitely could still charge the right amount, pay what you need to pay. And the only little hiccup that comes in there is what happens when you get to 40 hours.
And that’s again a DOL, Department of Labor, question. But I want to encourage you guys who are listening—don’t just automatically think that you can’t offer overnights. You absolutely could. And it is not your responsibility to say, “Oh, that’s way too expensive.” Let’s examine this a little bit further. If minimum wage is, say, $10, an eight-hour overnight would be $80. So in order to keep true with that 30-30-40 rule, you would have to charge $200 a night. That would be $60 for you, $60 for the business, and $80 for the sitter.
Who are you to say that $200 a night for eight hours is too expensive? I would encourage you to still offer it. If someone says that it’s way too much, you could do a bait and switch. “Oh my gosh, I totally understand $200 a night is very expensive. Let me explain why.” Well, and then you explain, and you say, “But I really want to make this work for you. So how would you feel about three visits a day? We actually experience that most of our pets do just fine that way. And I would encourage you to try it out. Maybe we could try it on a short trip first. I’ll keep close contact with you. And if you don’t think Fluffy is doing okay, we can actually do overnight.”
You never know. I would think that if people are coming to your website and they’re looking for an overnight or a sleepover solution and you don’t offer it, they’re going to bounce to the next site. They’re going to bounce to Rover.com or Care.com. Why not keep them on your site? Have them call you, have them email you and contact you about it. And then you can actually have a conversation and let them make the decision.
Maybe it is too expensive, but at least you have a fighting chance. Don’t ever sell yourself short. Let the client make the decision. Tell them the reasons. Give them the statistics on how well pets actually do at night. Ask them, is there a medical condition that your pet has that prohibits them from being alone at night? Talk them into it. Find the rebuttals.
But don’t simply just not offer it because you don’t know if you can actually afford it. Make an educated decision. Call up the Department of Labor. Ask them if you are exempt because of the Fair Labor Standards Act (FLSA) that states that people that make less than $500,000 don’t have to adhere to that. And that if you want to do piecework, you can.
Now I’ve gotten many different answers from many different pet sitters that are in many different states about this, so you really, like I said at the beginning, have to do this work for yourself. But just because you might be forced to pay by the hour or minimum wage per sleeping hour does not mean that you should not offer overnight. Please, if I can beg you—keep that in your services. You have no idea what people are willing to pay for their peace of mind.
Another way that you could add a lot of value for selling these overnights is offering to send videos or pictures and maybe only leave that for the exclusive overnight service. Or maybe you have an Animoto account and you could send one of those. There are so many different things that you might be able to do. You could say that includes taking in and out the trash. You could say that it includes sorting the mail. You could make it sound like it’s so much more special than just day visits.
Add some sort of a value-based service. You’ll send a one-minute-long video clip for all overnight stays, and this is really important and exclusive if you get those overnight stays because we don’t do it for just day visits. Little things like this will add to people’s peace of mind and will really help add to the value of paying just a little bit extra for this kind of service.
Because at the end of the day, between you and I, a pet is totally fine sleeping at night by themselves. It’s not like a little child—they’re not going to get into things or need another human being there. It’s an overnight; it’s sleeping with pets. And when it comes down to it, it’s really the client’s psyche that is needing these overnights with the pets. It’s their own guilt.
So let’s try to appeal to them and try to offer them this service. Please, please, please, if there’s one thing that you get from this short podcast today, do not ever not offer overnights because you feel that it’s a deal breaker with cost in your company. You have no idea how much money you could be leaving on the table and walking away from.
This has been another episode of Bella in Your Business. Thank you so much for spending the past few minutes here with me. I encourage you to go back and listen to some of the other podcasts that I have if you have not already. They’re chock full of more ideas, tips, tricks, some of my own personal stories, trials, and tribulations. Also, feel free to follow me on Facebook—go search for Jump Consulting, or friend me at Bella Vasta. I love getting to know you personally.
Give me your feedback. Tell me what you want to hear about. I’m always looking for great topics and great interviews too. If you know anyone of interest—maybe it’s even you—you can reach me at [email protected]. And thanks again for listening.
Thanks for jumping with Bella in Your Business. For more information, free articles, and coaching, go to JumpConsulting.net—and remember, Bella’s got your chute.