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Pros and Cons of being a salon booth renter

July 10, 2011 | 10:11 AM

Booth renters, also referred to as "independent contractors," lease space from a large salon or a suite of small salons. If you choose to go this route, you won't be an employee; rather, you'll be your own boss and pay a landlord either a flat rate or a percentage or your business.

suites to the sweet

One common work environment for the "indie" is a small mall of salon suites, rented separately and housing one or two stylists. Included in the rent are utilities, furniture, cleaning services and sometimes reception services. Indies with a clientele rent the space, come and go as they please and run their own businesses. Some of those with double suites hire assistants or sublease the second suite.

In some cases, every independent contractor has a key; in others, the mall posts working hours and hires people to open and close. Another difference involves the extent of perks that come with the lease. You may have access to health insurance, continuing education and other benefits that are more affordable through a group purchase than an individual one.

IRS watches

When you lease your space, it's important to make sure that your contract complies with very strict—and monitored—rules set by the IRS. You must really be running your business. You should be responsible for buying your supplies, managing your books, keeping track of your inventory, pay your own business taxes and advertise and market your business.

Keeping the distinction between indie and employee protects working stylists, because no one can take advantage of them. A salon owner cannot have it both ways. For example, the owner cannot operate as a regular salon business—setting hours, having a dress code, requiring attendance at staff meetings and so forth—and then claim that it's a booth rental salon and fail to pay workmen's compensation and business taxes for each stylist.

advantages and disadvantages

The biggest hurdle to become a booth renter is building a book. You have to recruit all of your own clients. A walk-in isn't unheard of for any business with the word "beauty" or "salon" on its sign, but you're still not going to attract a huge walk-in clientele when you're an independent contractor. Other disadvantages include:

  1. You'll have to budget for Yellow Book and other advertising expenses.
  2. You won't have the name recognition and reputation of larger salons.
  3. You should stay up on the latest salon software to make it as easy as possible to keep your inventory, client records and expense/income reports.
  4. You may be surprised at how much time it takes to run a business really well.
  5. You must take the time to perform "ownership" tasks like meeting with distributors and ordering products.
  6. Other than perhaps a colleague down the hall, you never have anyone to cover for you if you leave the salon to get continuing education, stay home with a sick child or take a vacation.
  7. You may need to hire business advisors such as a lawyer or accountant to help you with responsibilities like doing your taxes, making sure you have adequate liability and other insurance and checking your lease and everything else you sign.
  8. By the time you pay for your business expenses, your margin of profit may be a lot less that you'd hoped.

But there are advantages as well, most resulting from the flexibility that comes with the tremendous freedom you have as an independent contractor.

  1. You can set whatever hours you choose and work as little or as much as you want and as client demand requires.
  2. If you like, you can come in only when you have clients. With a cell phone, you can be available for clients 24/7 from wherever you are.
  3. You can wear what you like.
  4. You can use and sell whichever products suit you best.
  5. You can target a specific clientele without worrying about who the greater salon attracts.
  6. This valuable business experience can prepare you for opening a bigger salon with employees.
  7. It's not forever; when your lease is up you can always get a job again and take your clientele with you.

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