Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How a Dog Groomer Scaled to 10 Million by Fixing One Metric
Transcript
- Lucas: We've spent nearly a hundred episodes watching small service businesses hit that ten, twenty, fifty million mark — and the pattern is almost never 'open more locations.' Luna: Right. It's usually something boring and operational. Which I mean as a compliment. Lucas: Exactly. Today's case — a dog grooming business in Columbus, Ohio. Started by Jenna and Mark Rivera out of a single shop. By year six they were doing one point two million in revenue. Nothing special. Same eight grooming stations, same neighborhood, same basic pricing. Luna: And they hit ten million without a second location? Lucas: Ten-point-six, actually. All from that same eight-station shop. They did it by obsessing over one metric: technician utilization rate. That's the percentage of a groomer's paid time that they're actually grooming a dog — as opposed to waiting for the next appointment, cleaning up, or standing around. Luna: So the classic utilization problem. Most shops run at what, sixty percent? Lucas: Fifty-five to sixty-five percent is typical. The Riveras got theirs to ninety-two percent. That's the entire story. Luna: Okay, I want to know how. Because you can't just schedule tighter and tighter — dogs aren't predictable. Lucas: They couldn't. That was the starting insight. Jenna told me that early on they tried thirty-minute slots for small dogs, hour slots for large dogs, and it was chaos. A matted golden retriever would take ninety minutes, then the next customer shows up early with a nervous Yorkie — and suddenly the groomer is rushing or the Yorkie is waiting. Luna: So utilization tanks because you can't control the variability. Lucas: Right. So they did three things. First, they introduced tiered pricing and tiered appointment lengths based not just on breed size, but on behavior and coat condition. A 'low-maintenance' small dog — say a well-brushed Miniature Poodle — gets a thirty-minute slot at forty-five dollars. A 'high-maintenance' small dog — same breed but matted, anxious — gets a sixty-minute slot at seventy-five dollars. Luna: So they're charging more for the variability that hurts utilization. That's smart. Lucas: And it creates a self-selection effect. Customers with easy dogs gravitate toward the cheaper, shorter slots. Customers with difficult dogs pay more, but the groomer gets adequate time. The key is that the pricing reflects the resource consumption, not just the dog's weight. Luna: Did customers push back? I'd imagine someone with a matted cockapoo might feel penalized. Lucas: Jenna said the first month was rough. But they framed it as a quality promise — 'we want to give your dog the time they actually need without overbooking.' And they offered a free fifteen-minute touch-up if the dog wasn't perfect. That disarmed most objections. Luna: Second thing? Lucas: They built a simple internal software tool — just a web app — that tracks real-time utilization per groomer. Each station has a tablet. The groomer taps 'start groom' and 'end groom.' The system logs every minute against that appointment. At the end of the day, each groomer sees their utilization rate, plus the shop average. It created a little internal competition. Luna: Gamification. Did that work? Lucas: Absolutely. Groomers who were at seventy percent saw they were leaving thirty percent of their earning potential — and tips — on the table. Because the Riveras also pay a commission on each groom. Higher utilization means more dogs, more commission. It aligned incentives perfectly. Luna: And the third thing? Lucas: They changed the intake process. Instead of the customer dropping the dog off at the front desk and a staff member walking it back, the groomer comes out greets the dog, does a quick two-minute assessment of coat and behavior, then tags the appointment with the tier. That assessment happens while the customer is still there, so if the tier changes, they can discuss it immediately. Luna: So no surprises later. The groomer has a clear expectation of what they're walking into. Lucas: And the customer sees the groomer interact with the dog, which builds trust. It also means the groomer has ownership from the start. They're not just handed a dog they've never seen. Luna: Now, the utilization number — how did it actually move over time? Lucas: First year of these changes, they went from sixty-two percent to seventy-eight. That alone pushed revenue from one point two million to about one point eight million, because they could fit more appointments into the same day. But the real leap came when they reached ninety-two percent. At that level, the eight stations were generating the equivalent of nearly thirteen stations at baseline utilization. Luna: That's the math that matters. Ten million from eight stations means each station is doing over one point two million a year. That's incredible throughput. Lucas: The average grooming salon in the U.S. does about one hundred fifty thousand per station per year. So they're roughly eight times more productive per station. And they didn't expand hours significantly — they were open eight to six, same as before. Luna: If today's episode was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. It's what keeps this show ad-free and independent. Lucas: Yeah. If these conversations have moved your work forward in some small way, that's where you can support it. Genuinely appreciate everyone who does. Luna: Alright, back to the groomers. The utilization data also helped them solve a hiring problem, right? Lucas: Big time. When they were at sixty-two percent, they thought they needed more groomers. Turns out they just needed better scheduling. But once they hit ninety-two, they genuinely needed to add capacity. The data told them exactly when to hire — not based on a feeling, but on a consistent overflow pattern. They added a ninth station, then a tenth, by reconfiguring the floor plan. Luna: So they did eventually add stations — but only after they proved they could fully utilize what they had. Lucas: Exactly. They didn't add the ninth station until the eight were consistently above ninety percent for six months. That discipline is rare. Luna: What about customer satisfaction? Did the focus on speed hurt the experience? Lucas: Jenna's data shows the opposite. Their Net Promoter Score actually went up. Because customers got more consistent appointment times — no more long waits — and the grooming quality improved because groomers weren't rushing to catch up. Luna: So utilization isn't just a productivity metric, it's also a quality metric. Higher utilization means less chaos, more predictability. Lucas: Right. And the software tool also gave them data on which groomers were fastest with certain coat types. They started matching dogs to groomers based on that. A groomer who's great with poodles gets poodles. That further improved throughput. Luna: That's almost a just-in-time manufacturing approach for dog grooming. Lucas: It's exactly that. The Riveras never used those words, but they essentially built a lean production system. They eliminated waiting, reduced variability through tiering, and aligned incentives. Luna: I wonder if the same playbook could work for other personal service businesses — hair salons, nail studios, massage therapy. Lucas: I think so. The key elements are: a discrete service that can be timed, variable complexity that can be priced, and a technician whose time is the bottleneck. That describes a lot of businesses. Luna: And the software doesn't need to be fancy. They built theirs with a contractor for twelve thousand dollars. Lucas: We'll link to a case study on the show page. But the bigger takeaway is that the metric itself — utilization — is so simple it's often ignored. Everyone focuses on revenue growth, new locations, marketing. The Riveras focused on the gap between what they had and what was possible. Luna: That gap was worth almost nine million dollars. Lucas: And they didn't need a single new customer to start. They just needed to serve the customers they already had more efficiently. Luna: Alright, next episode we'll look at a plumbing company that used a similar utilization fix but with a different twist — they focused on travel time between jobs. Lucas: That's a good one. For now, if you run a service business, check your utilization rate this week. If it's below eighty percent, there's probably a million-dollar fix hiding in plain sight.