The Hidden Cost of Commission: Why It Nearly Broke My Business and What I Did Instead

When I opened my salon in 2010, I set up my team on a commission-based pay structure.

Why?

Because it’s what I knew. Every salon and spa I’d ever worked in paid commission and I assumed it was the only way.

At first, it worked.But within a year, the cracks started to show.

The competition between team members was spilling into the client experience.Tensions over who got what sale and which retail credit went to whom were growing.

Some of my staff were earning 50% commission, and they still wanted more. But if I raised their percentage, I would literally lose money.

Something had to change.

That’s when I got curious:Was there another way to pay a team; one that allowed them to grow without breaking the business?

What followed was an 18-month transformation.

I audited every part of our operations. I started making small shifts daily, quietly laying the foundation for something much bigger.

We began evolving our culture.

Eventually, we were ready for a new pay structure: one that included livable wages, profit sharing, bonuses, and a crystal-clear path to growth.

My employees knew:

• When raises and promotions would happen

• Exactly what they needed to do to earn them

• What was expected of them at every level

We introduced open book management, where everyone became financially literate. The team didn’t just understand numbers, they were invested in them.

And here’s the thing: By the time we officially switched over to the new pay structure, the culture already reflected the future we were building.

A commission model might feel strong, but that doesn’t mean it’s sustainable.

If you want a company that builds loyalty to your brand instead of to individual service providers…If you want to reward your team without sacrificing your profit margins…If you’re ready to lead your business, not just manage it…

This kind of shift is possible.It's not easy. It takes daily leadership and hands-on coaching.But it helped me grow a team culture I was proud of—and a business that became 200% more profitable annually, while keeping service provider payroll under 30% of revenue.

Ready to explore what’s possible in your company?

Book a complimentary discovery call and let’s talk about your pay structure, team culture, and the sustainable growth you actually want.