June 2012

Lisa Kind - Editor

The Mane Objective | by Marco Pelusi


To Booth Rent or not to Booth Rent; That Is the Question

As business owners and managers, one of the biggest decisions we have to make in our career is what is better for our business – booth renting or commission?

To complicate things even further, there is also the third idea of salaried employees. As hairdressers, the choice can also be challenging.

Whichever business employment structure you choose, it is important to do your research, be prepared, and instill related opportunities with your hairdressers and entire staff.

Booth Renting – Is it right for me?

The salon owner rents space/stations and acts as a landlord with the hairdresser as the tenant.

HAIRDRESSER — If you're a hairdresser and booth/station renting is possible and allowable in your state, this can clearly be most profitable and most exciting. However, you must be a go-getter to rent a station. You'll need get out there, network constantly, and build, build, build your book of business. After all, you have to pay your rent.

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 simply 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 business person to master your business.

BUSINESS OWNER/MANAGER— For the salon owner, there may be somewhat less responsibility for you, because each booth renter is an independent contractor, and therefore each hairdresser runs his/her own business or his/her own booth.

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

Commission – Is it right for me?

The commission structure is similar to a salaried employee concept in some ways, and is much more common.

HAIRDRESSER — Commission typically starts around 50 percent for the hairdresser, and perhaps could grow with time and business. Therefore, working on commission can be quite motivating and lucrative for a hairdresser. As a hairdresser, especially if you're building your client base, it is easy to have incentives in this situation.

BUSINESS OWNER/MANAGER — This scenario gives the salon owner some control, but also more responsibility – as this basically sets up the hairdresser as an employee. One big responsibility that falls on the salon owner in this situation is to provide his/her hairdressers with new clients (Note that this is great for a hairdresser with a small client base).

A big pro for the salon owner here is much money can be made with a strong hairdresser. A busy hairdresser in a commission situation can provide a constant cash flow for the salon owner, and quite potentially in a big way.

Salaried Employee – Is it right for me?

Hairdressers are hired on as formal part-time to full-time with an employee/employer relationship.

HAIRDRESSER — For a hairdresser without any clientele, this salaried position could be a viable option. For a beginner stylist, the idea works, as a constant stream of new clients will hopefully be available. Another positive element for the stylist is possibly a health insurance plan, and perhaps other employee benefits. A negative is simply that less money may be realized for the hairdresser in this setup.

BUSINESS OWNER/MANAGER — In many ways, the salon owner is the one who has it made if his/her hairdressers are salaried employees, as the owner truly has the greatest control. The challenges for the owner in this scenario include having sole responsibility for carrying insurance, managing staff, and overseeing all operations.

If you're weighing options, or looking ahead for your personal 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 forward in our careers and businesses, we simply must become good career-minded, 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 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.



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