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Pros and Cons of Booth Renting

Victoria Wurdinger | March 31, 2014 | 11:36 AM

Deb Hunt, owner of Spa Business Solutions in Vista, California, says stylists often go solo due to frustration. “They add up their tickets and think it’s a lot of money they can keep themselves,” Hunt says. But rental is a different business model, and there’s more to consider than income.

Pros and Cons of Booth Renting

Renters rent space from a landlord who has no say about how they work. They buy all their own supplies, obtain and book clients, pay for education, need a business license and insurance, and do almost everything else a salon owner does. Renters cannot receive unemployment or workman’s compensation. They also pay double the social security taxes to cover the employers’ contribution.

Employees are paid a commission or salary and have to follow someone else’s rules. They receive training and various benefi ts. Depending on the salon, these include paid vacation, free education/training, mentoring, health insurance and backbar products. Of course, they get client referrals and help with retention. A good salon provides support in every area, and often, a stylist’s level of success is due to that support, Hunt says.

If you’re considering renting…

• YOU MUST HAVE: The ability to run every aspect of your business. “Be an ambitious self-starter, highly motivated, social media savvy and goal-oriented, all while delivering consistently excellent services,” says Tanya Ramirez, a renter at Untamed Instincts in Los Angeles.

• YOU MUST HAVE: A strong client base. You should be booked at least 80 percent of the time. Tamara Dahill, who owns the rental-based Tamara Dahill Salon in Los Angeles says a good benchmark is that you must be able to pay your rent on 30 percent of your gross. The rest, she says, goes to expenses and yourself. “You need to set aside estimated taxes and budget for supplies, insurance and more. Make a list of all your costs!”

• YOU MUST HAVE: Marketing abilities. Not all of “your” clients will follow you, and your former employer will try to keep them.

• YOU MUST HAVE: Savings. At minimum, have three months’ worth of living and business expenses. What’s next? Make a list of the pros and cons of both situations. Consider your personality, says Dahill; only you know what is right for you. Then explore options.

Ask potential employers about: Training, mentoring and apprenticeships, dress codes, rules and regulations, pay and benefi ts, the salon’s culture, your responsibilities and opportunities.

Ask landlords: To see the space and the lease; share the latter with an attorney. What are you responsible for? Can you sublet or use an assistant? Also check booth rental rules at the IRS’ website.

Pros and Cons of Booth Renting

“Booth renting offers the chance to run your own business without the added stress of running an entire salon,” Ramirez says. “If you are business oriented, set up a business- growth plan with defi ned goals, and promote your work everywhere online.”

“Don’t assume renters must go it alone, Dahill adds. “Having someone cheering you on boosts success.” Dahill invites her renters to education—they often behave as a team by choice. Suggesting that the culture of a rental business matters just as much as that of an employee salon.

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