March 2013

LeAnne Velona

The Beauty Professional| by Fred Jones


Salon Owners Business Acumen

While there are plenty of advanced certifications for the behind-the-chair beauty professional, there aren't as many easily accessible seminars and educational opportunities for salon owners.

What follows is merely a brief outline of some weighty matters that all establishment owners should be familiar with and should continue to brush-up on. Some deal with legal and regulatory mandates, others with ways to protect one's investment from non-governmental risks inherent with beauty businesses.

Given the complexity of many of these topics, I can only touch upon them in this short column. There are many professional services available to help shed further light upon any of these topics should you feel inclined to seek more detailed assistance.

Government Mandates

All responsible salon owners need to be compliant with applicable laws and regulations governing beauty establishments. Some of these rules focus on licensing and display requirements; others focus on client and occupant safety; and still others on employee and independent contractor responsibilities.

A word about each of these broad, government-imposed categories:

Permits and Posters: All states require salons to have municipal (i.e. city/county) business permits and applicable state-issued licenses. In addition, all technicians and stylists working in the establishment must be licensed, usually with a state agency dedicated to cosmetology (i.e., "State Board"). Most states require these licenses to be prominently displayed to the public. There are also many "human relations" related material that must be posted in the place of business where employees gather, detailing things such as workers' compensation information, overtime standards, and other employee rights.

Occupational Standards: There are several municipal, state and even federal agencies concerned about the safety of your patrons and salon professionals. Beside your state's licensing agency, there are Occupational Safety and Health Administration (OSHA) agencies at both the state and federal levels, and City Administrators and Fire Marshalls at the local level. OSHA agencies lay out strict safety standards for such things as required ventilation, limits to chemical exposure, personal protective equipment and safety protocols. So compliance with State Board regulations is not sufficient to cover all of the necessary "red tape" governing your salon business.

Tax Compliance: And then there's the "tax man", ever vigilant and increasingly active in our world of beauty. In my state of California, the Legislature and Governor recently provided our state taxing agency added power to pursue business owners who wrongly classify independent contractors; this could mean steep penalties and back-taxes for salon owners who have booth renters operating as de facto employees (the key consideration is whether the owner exercises significant control over the booth renter's work). And another new law requires employers to provide their employees with written contracts for any agreements that involve commission payments. At the federal level, salons have been under increased scrutiny, particularly those with booth renters. So whether your state is cracking down or not, the IRS appears poised to pounce on salons operating with loose operational terms.

Risks and Rewards

Beyond the heavy hand of Big Brother, there are other matters that all responsible owners should be attentive. The following questions are meant to focus attention on some of these important considerations to protect and enhance your salon investment.

• Have you closely reviewed your lease to make sure you and any booth renter operating in your salon are not in breach of any provision?

• Is the salon adequately insured against property damage, client harm, and employee injuries, and are your policies specifically tailored to beauty salons?

• Does your place of business sufficiently brand its services to the community, so that your salon stands-out from your competitors?

• Do you require your stylists to seek continuing education -- and do you assist them with monetary or promotional incentives to keep evolving their skills?

• Do you belong to professional associations, such as your local chamber of commerce, as well as trade associations specific to beauty, with a firm commitment to your industry and the understanding that a rising tide lifts all ships?

While the professionals working in your salon need to stay on the cutting edge of industry trends, techniques and technology, you as a salon owner should also continue to perfect your business acumen and practices. Whether it's the threat of a government regulator, a hungry personal injury attorney, or an act of God (that damages your salon facility), you need to protect your investment and plan for its growth and success.

Fred Jones serves as Legal Counsel to the Professional Beauty Federation of California, a trade association singularly dedicated to raising the professionalism of the beauty industry. To learn more about the PBFC and receive further details about the subjects contained in his column, go to