April 2009

Lisa Kind - Editor

The Mane Objective | by Marco Pelusi

 

Pros and Cons of Booth Renting

Booth renting, commission, or salary – what’s the best option for you?

It depends, of course, on what is actually allowed in your area, as each state has its own rules and regulations.

For example, in California, booth renting is a very popular option. In other states, such as Pennsylvania, booth renting is not allowed. There are pros and cons for you – as a hairdresser or as a salon owner – in each scenario. Let’s explore some benefits and challenges of each.

In many ways, the salon owner is the one who has it made if his/her hairdressers are salaried employees, as the owner has the greatest control. The challenges for the owner include having sole responsibility for carrying insurance, managing staff and overseeing all operations. However, for a hairdresser without any clientele, this salaried position could be a viable option.

For a beginner stylist, the idea works, such that a constant stream of new clients will hopefully be available. Also there may be health insurance and perhaps other employee benefits. The challenge is simply that less money may be realized for the hairdresser in this setup.

The commission structure is similar to the salaried employee concept in some ways and is more common. Commissions typically start at 50 percent for the hairdresser and perhaps could grow with time and business. Therefore working on commission can be quite lucrative for a hairdresser. This gives the salon owner some control but also more responsibility.

One big responsibility that falls on the salon owner is to provide new clients (which is great for a hairdresser with a small client base). The key benefit for the salon owner here is that a busy hairdresser can provide a constant cash flow, and quite potentially in a big way.

Booth renting can be very profitable. However, you must be a go-getter to rent a station, especially in today’s economy. You need get out there, network constantly, and build your book of business.

But the hunt can be rewarding. On the downside, the challenges associated with booth renting usually center on the business aspects that include securing a business license, controlling your own book and having a constant inflow of new clients.

If you have trouble with self-motivation, it may be tricky to rent a station, especially without several years of working on commission and building your client base. Some hairdressers sort of fall into booth renting after years of working on commission.

Financially it can be quite beneficial to you as a busy hairdresser to be a booth renter. Booth renting may also provide you with a sense of independence, as well as confidence, as you truly need to be your own businessperson to master it. For the salon owner, there are positives and negatives. The positive is there is somewhat less responsibility for the salon owner, because each booth renter is independent, and therefore each hairdresser runs his/her own business.

Each hairdresser rents a space from the salon owner – quite similar to real estate. The salon owner’s chief function here is to be a landlord who maintains a comfortable pleasant chair and environment for booth renters. This landlord role, however, may quite possibly be difficult for some salon owners.

If you’re weighing options, or looking ahead for your career, sit down with your accountant and figure out what will work best for you in the long term. Hairdressing is an art, yes, but it’s also a business. As we move along in our careers, we simply must become good business people.

Marco Pelusi is globally recognized as a haircolor trainer and platform artist. Marco Pelusi Hair Studio, Inc. was named Best Hair Color in Los Angeles 2007 by KTTV Fox11’s “myfoxla Hot List” competition. Pelusi created the Marco Collagen Color Guard HairCare System, the collagen system developed for color and chemically treated hair. For more information, visit www.marcopelusi.com.