Booth Rental Vs. Commission Salons: Which Structure Is Right For You?
One of the most important career decisions you will make as a beauty professional is whether you want to rent a booth or work for commission. Spoiler alert: there’s no right answer. The best choice for you will largely depend on your individual circumstances. Is working on a team important to you, or are you interested in building your own personal brand? Whatever your needs may be, we are here to help make your decision easier.
Here are a few pros and cons for both environments:
COMMISSION SALON
- (PRO) Your work day ends when you leave the salon. Working for commission means your salon owner handles running the business (marketing, product purchasing, and clientele growth). This allows you to focus on improving your skills and developing yourself as a professional. At the end of the day, there is no need to stress about the logistics of your hair salon booth rental or rental agreement.
- (PRO) Your paycheck is guaranteed. Every salon’s payment structure is different, but many traditional salons offer a salary or hourly wage on top of commission earnings. Additionally, you are not responsible for rent. This means, even if there are days when no clients show up, you are not losing any money on expenses on a hair salon booth rental. Most hair salons also offer health insurance and retirement savings which can add up to thousands of dollars a year.
- (PRO) You have a team. Working with a team of stylists grants you opportunities to learn from your peers, cross promote, and look to other stylists for support and encouragement. Also, if a client ever decides to drop by, a team member is always there to greet them.
- (CON) You run the risk of working for a bad salon. We’ve all heard horror stories about salon owners who take advantage of their employees. It is important to do your research and choose a salon with the right environment and management for you.
- (CON) You have less freedom. As part of a salon, you are required to work certain hours on specific days. You will not be able to market your own personal brand and some stylists find that working for a salon can stifle their creativity as opposed to working as an independent contractor. In some cases, you may not be allowed to add personal touches to your station.
- (CON) You have to share your earnings. Hair salon commision rates can range from 35% – 60%, however, it’s common practice for salon owners to deduct the cost of the products from your paycheck, bringing the total earning down to as low as 25%.
Hair Salon BOOTH RENTAL
- (PRO) You set your own schedule. As an independent stylist, you are able to work the hours that fit your lifestyle best and be available for clients on their time instead of the salon’s. In fact, you could only come into work on the days you have appointments and use the rest of your time working on things like marketing and taking classes.
- (PRO) You control the branding. Renting a hair salon booth allows you to express yourself creatively. You design the aesthetic of your space, you choose the products, the towels, the business cards, etc. You control your image and the style of your services and you can target a specific clientele without worrying about who the salon (as a whole) attracts.
- (PRO) You keep what you earn. This one speaks for itself. In an article by “Revolver,”a stylist that worked for commission for over a decade explains the potential financial benefit of transitioning to booth rental.
“I was charging $50 for a haircut and making 49% of that at my commission salon. If I did $5000 in services in a month average, after commission, taxes, and deductions I went home with roughly $2000/ month (not including tips). It’s enough to live on, but it’s a pretty modest life.
Skip forward to the same service numbers as a booth renter. I was paying $250/week for a chair, plus estimate another $200-400/month in expenses (color supplies, accounting, etc). For that same $5000/month in revenue, I was now keeping $3600-3800 of it, plus tips. That’s 80-90% more money in my pocket at the end of each month for the exact same amount of work.”
- (CON) You have more responsibilities with booth renting. As a booth renter, you are responsible for the upkeep of your own business. You are in charge of growing your clientele, restocking supplies, and keeping up with industry trends. Keep in mind, more responsibilities often leads to more rewards. This valuable business experience could prepare you for opening a bigger salon studio with employees in the future.
- (CON) There are more expenses. You may not have to pay commision as a renter, but you will have several more expenses to keep track of. You will be in charge of keeping revenue reports and making sure you meet your financial goals each month.
- (CON) You won’t have the reputation of larger salons. Reputation plays a major role in the success of a stylist. Many stylists who are new to the industry find it difficult to build a clientele without the reputation of a salon to lean on.
We asked pro hairstylist, Alin Fekete, to share his advice for professionals thinking about branching off on their own.
PRO TIP: “I think many hairdressers go through a similar experience, they work for someone for a while, they build your clientele, and then they hit a wall. There is a freedom that comes with managing your own business but it also comes with a high responsibility.
Take your time – don’t let your emotions get the best of you. When you are working for someone and they are taking 50% it doesn’t feel the best, but make sure you are ready to branch out on your own. Make sure you have a good amount of clients. Make sure, for yourself, that you are actually ready in terms of the talent and experience you have to offer. And that is something only you can answer for yourself.”
Being your own boss is a rewarding choice, but it takes commitment and perseverance. Make sure to evaluate where you are in your career and set goals for where you want to be in the future. With the right tools, no matter which path you choose, there are always opportunities for success.
Thinking about expanding your business? We have the tools to help you get started here.
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