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Hattori Hanzo Shears

Salon Booth Rent Vs. Commission: The Factors To Weigh When Switching From Working As An Employee At A Salon To Booth Rental

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In the hair world, it’s normal to go through the steps of going to school, assisting, working as a commission stylist at a salon, and then going off on your own as a booth renter, suite owner, or salon owner. When contemplating going out on your own, it can seem scary and confusing. Being a commission stylist is a pretty comfortable place to be, but you may be able to make way more money on your own. Going out on your own is no easy task. It takes a lot of discipline, dedication, and funding to leave a commission salon. If you factor in all of these fees, costs, and other variables and determine that it makes sense for you to go out on your own, you will be able to be successful and independent!

How Many Clients Do You Have

The amount of salon clients you have at your commission salon is essential to know when determining your plans because this will tell you how many people you have to reach out to and promote. It is ideal to have an entire book of salon business when going out on your own. A complete book of business for a stylist is generally 100-150 customers. You could potentially have more than this, but on average, that is how many clients you should have to consider going out on your own. Another thing to consider here is that some of your clients may want to stay at the current salon you work at and not want to drive to your new location.

How Frequently Is Your Schedule Full

The next thing you need to consider is how frequently you have a full day of work at the salon. Now you may have 100 salon clients, but they may only come to see you every eight weeks for services. Here is where things can get tricky. The retention of your salon clients is essential, and the frequency of their visits is even more critical. To consider leaving commission and going to booth rental, you should have a pretty consistent and full salon schedule each week. Your full schedule doesn’t necessarily mean you need to be booked solid every day you work, but having a pretty full-on average schedule is a great way to gauge if you are ready to become independent.

How Much Money Are You Bringing In Weekly Before Commission Is Taken Out

The amount of money you are bringing into the salon every month is a variable that is super important to know. To determine the amount of money you bring in monthly:
Start tracking the total of each service you are performing on your phone or a notebook.
Once the month is over, add up the total amount of money you brought in before the salon took out your commission. This amount you find may seem like a lot of money, but once you start to bring in the other factors, you may be surprised. Keep this number saved and move on to the following factors

The Amount Of Color You Are Using And Cost

Professional salon hair color is costly and can add up quickly. To determine if you are ready to booth rent, you need to know the amount of product you are using and the cost. Just like jotting down the money you are bringing in, write down the amount of color, developer, and bleach you are using on each client. At the end of the month, total it up and head to the beauty salon supply store. Check out the price tag on the products you use and figure out how much money you will have to dish out for color and other products each month. You’ll need to deduct this number from the amount of money you bring in each month.

The Cost To Rent A Chair Or Space

Each salon location will charge a different amount for their chair or space. Ask your stylist friends in the industry to see what they are paying to rent their chair. It can range from $250 to $1200 per month, depending on your salon location and what the chair rental includes. To determine how you want to move forward, find a salon location or two that you could see yourself working at and get a cost from them. You’ll also need to deduct this cost from your monthly income.

Business Licencing

Every state differs on this topic, so it’s essential to look into the requirements from your state on what it takes to open your own business or salon. Some states will require you to get a salon business license and permit. These costs also vary and should be taken into consideration when you are making this decision. You can usually find this information online, on your state’s website, or by calling your local city hall. These costs can be hefty, so make sure to find this out before you make your decision.

Insurance Costs As A Chair Rental Stylist

When you work as a commission stylist, you generally are covered under your salon’s insurance. When you leave the commission world, you may have to get liability or business insurance to operate your business and protect yourself and your clients. Licensing and insurance are something you should go over with the salon or location where you are thinking about renting a chair. Some spaces may cover you, and others may not. Insurance will be an additional cost to you as a business owner and must get factored into your income and revenue.

Stylist Retail Product Cost

Determining your salon retail product costs is essential, especially if you plan on selling salon retail in your new chair rental space. You will have to purchase the products upfront and hope that your clients will buy them from you. Salon retail products can put more money in your pocket down the road because you will likely be selling them for a 50% profit. Having some money saved up and set aside for costs like this can be helpful when going independent. The back bar products you use generally get included when you are a commission stylist. As a booth renter or suite owner, you may need to buy your products.

Miscellaneous Fees and Costs Acciocicated With Rent

Much like everything else in life, starting your own salon business will come with surprises and surprise costs and fees. It’s essential to get prepared for these unknowns and unexpected hiccups. Saving up some money on the side for things like this before going out on your own will be beneficial for the future and sustainability of your career and business. The amount of money doesn’t need to be a but just something to have for backup if you run into any issues. Something around $500-$1000 is a good target.

Taxes You Pay As A Stylist Or Business Owner

When you go out on your own and leave the commission world, it means you are no longer an employee; you are an independent contractor or a business owner. Your taxes will be entirely different than they were as an employee. Your Commission salon employer typically takes taxes out of your paycheck for you. This way, you don’t have to worry about it at the end of the year. When you go on your own, you will be responsible for all of that as an independent. It’s an excellent idea to talk to a tax professional about this topic and get a good idea of cost and responsibility. You can receive benefits as a business owner that may make sense for you to go out on your own as well.

Once you have factored in all of the costs and fees associated with going out independently, you will want to deduct that number from your monthly income as a commission stylist. That way, you can see if you make enough money to become a booth renter or salon suite owner. Write down the pros and cons of your decision and weigh in all the variables to see which one makes more sense for you. You may want to stick with being a commission stylist not to have to deal with all of the headaches of business ownership, or you may wish to take independence head-on and become your boss. Whatever makes more sense for you is the right way to go. Remember everyone’s path in life is different, and we don’t all have the same journey. Your success is in your hands and no one else’s.

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