Booth Rent Vs. Commission Based Salons
This is an often debated topic when opening a salon. I want to take a minute to discuss some of the pros and cons of both kinds of operations.
Booth rent salons from my experience seem to lack flow. I think running a booth rent based salon takes alot of control away from the actual salon owner. If you own this type of salon you are allowing your stylist to manage a business within your business. Whatever services they provide good or bad reflects the entire establishment.
Now you can be selective in who you choose to rent to try and keep things together and to provide a common experience with each stylist.
Commission based salons in my opinion operate alot smoother. The salon owner has total control over the salon and provide all of the tool, and marketing needs for the stylist to work and attract new clientele. All the money is handled through a register, scheduling is done to try and keep wait times to a minimum and staff of stylist have standard times where they are at work.
I’ve worked with many salon owners that have strong views for and against each type of operation. I know there are issues with the way taxes are handled and overall business operation of each type of setup.
I am a firm believer in professionalism and consistency with any type of service based business. There are so many salons that lack both of these characteristics, and in my opinion I believe it’s because the salons are based on the booth rent system. I am not saying that renting booths isn’t professional; in many cases it’s just not done right.
I am very interested in feedback on this topic, it is discusses often throughout the world of hair and beauty. Share your thoughts.
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44 Responses to “Booth Rent Vs. Commission Based Salons”
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I was just wondering about salon owners that do commission can make their stylist do things that their not getting paid for,why should we water outside plants , and have notes to us to thoroughly clean the shop every week.I just have different views on this topic,but I was sharing some of the things I go through at my salon based on commission,I dont mind keeping my area clean but why should I have to clean the whole shop and run errands and also help the owner out when she gets overbooked from her own selfishness I mean where do stylist’s stand when it comes to commission.
Are their certain rules we have to abide by ,please help if you can and Thank you.
The pros and cons of booth rental and commission based pay can be sumed up in a few words of wisdom coming from a person that has been on both ends of the spectrum. As a salon owner I found it difficult to motivate booth renters; they thought that as long as they paid the weekly rental fee for the booth, that would also included any advertisments and shop maintanance. On the other hand as a hair care professional my booth rent was in access of $200 dollars per week and I looked for certain entitlements based on my rental fee such as salon advertisment and shop maintanance. What I have since realized that it is perfectly okay to expect certain entitlements from the owner and the booth renter. To build a sucessful business relationship between the two parties certain things should be in place and understood. 1. The owners phylosophy,goals,policies and procedures. 2. The hair care professionals expected role as a team player, and their contributing ability to established clientele. These factors should open up negotiable terms between the two parties which will allow them to complement each other as owner and hair care professional operating in a professional working environment that brings entitlement to them both.
Vanessa
I was forced to work on the 4th of July after having been told I had the option not to. I was asked to commit to 5 days a week 10-3 and often had to stay later just to make sure he did not get behind by shampooing clients. I had the least amount of clients but the most supplies and they were used without my permission. I felt I had to accept being taken advantage of, in addition to the fact I did not make much money.
This is regarding booth renters and being professional. I would like to say that everyone has their own way of running a business. One, of the reason’s why cosmetologist went to school was to be independent contractor’s, and to have the freedom of doing their own thing and selling their own products and not being controlled. However, as a professional stylist. I would not want to run my business like the owner because we might have totally different ways of educatining our clients. For the owner’s that have a commission it’s a mostly about controll over everything. So, booth renters keep doing your thing and have controll over your own destiny that’s what we went to school for.
I’ve been the booth renter, and the owner the past 8 years. All my stations are filled and we are one of the biggest and busiest salons in town. It is a booth renting salon. Over the past 8 years I have found it impossible to make any significant profit. The little bit made almost immediatly goes to maitenence and updating. The only way a booth renting salon can make money is by mass amounts of retail sales. I find it impossable to motivate them to sell product. They are too busy making their own fortunes behind their chairs, with little concern about the whole picture of the salon. I find most booth renters that I come accross have this attitude. Just a little wake up call to the stylist…If all the booth renting salons go out of business from lack of profit, where do you think you will work. The attitude needs to change. If you want to have a salon to work at in the future do your part, sell products and pitch in and be a team player. Otherwise I can assure you nobody wants the headache of running a business with little or no profit as compensation. I live in san diego, and there is only 25% of the booth renting salons still in business that were here 14 years ago. That tells you where the future is headed. So if you want to keep being a booth renter, take it apon yourself to see to it that your salon stays profitable..
Do you think a booth renter should have to pay rent if they do not work. We had a storm and the electricity was out for 5 days and one of my renters decided that they did not have to pay rent for the week. My landlord did not give me a break so where do you draw the line.Please email me with your comments djbullet@eatel.net
if a salon owner has to pay for all business expenses,and their name is on the front of the building don’t you think they should have control over their business wouldn’t it be better to have both,a booth rental with a small commission base that way everyone makes money.
Hi, I am looking into changing my salon over from a booth rent salon to a commision salon and am wondering if anyone had had any experience with KRS consulting. I have been to the week long school and have a consultent coming in a few days. I am concerned about what I would have to pay for taxes and may end up with more of a headache than I planned. I am one of those salons that is busy but still no profit because all the money goes to the girls and they don’t sell much retail. Anybody have any advice???
Like some I’ve been a booth renter for quite awhile however, the owners always wanted you to have your own clientele which was not a problem, but what was a problem was i made more money than the owner and the other stylist so, it created a uncomfortable vibe in the salon never understanding why also, i did pay my rent on time i’ve always believe in team playing. I did open my 1st salon a few months ago and, what came to me is that possibly the reason for the thick atmosphere was it was not enough money to the owner. So i’ve been really thinking about running a commission salon to maybe two women also, VERY IMPORTANT INFO…. MAKE SURE YOU CAN AFFORD YOUR RENT YOURSELF OTHER WISE YOU START SEEKING ANYONE THAT CAN HELP PAY THE RENT
and we all know that is a bigggg mistake no one is happy!Important for us to be happy in our own space!
I currently just got promoted in my salon to salon manager. I have been working at this salon for 4 months. I am new to the business and in school they really didn’t go over pros and cons. Here is our current status at our salon (I’ll try to make it short): We are currently trying to sell our salon (we have a few offers and hoping one goes through), we have 2 owners and recently many of the stylists who were friends before starting this salon (we are a booth rent salon) decide to up and move at last minute notice and open their own salon. Since then the owners have been drowning in all this financial mess. They are good people and really know there stuff-they just weren’t prepared for this. We are hoping that once this deal goes through we can move to a new location, smaller (we currently have 8 chairs, 2 manicure tables, massage and esthecian) Our new location will concentrate on hair (6 chairs) and spa services. I really want to switch it a commission based salon. My last salon used the krs system (from redken). I worked closely with the owner and she told me that she never made a profit when she was doing booth rent, now that she has switched to a commission system she has 45K just in one account. she is able to offer her staff alot of rewards, education. Give me your opinion. I would love for us to switch over to a commission and be able to offer our new staff cool benefits! email: ohiopm58@yahoo.com
I have been in this business going on 16 years and I have done both, In my choosing, it would be commissioned based salon because I am team oriented and I believe that when you hire, you should make sure that the ones you are hiring are also team oriented, share your goals and is looking to help build not your business because it is no longer your business, it becomes our business. I believe when you help the serious employees to understand that the business reflects them as well and help them to understand that they are valuable people not just workers, your business will flow alot better. I am for a commissioned based salon and I am looking to open one in the future.
I OPENED A BARBER SHOP A YEAR AGO, AND PLAN ON EXPANDING AND ADDING A COSMETOLOGIST. SHE HAS NO CLIENTS. SHOULD I RENT HER A SPACE OR COMMISSION BASE? PLEASE HELP.
I OPENED A BARBER SHOP A YEAR AGO, THINGS ARE GOING VERY WELL, SO I AM GOING TO ADD A GIRL WITH A BEAUTY LICENSE. SHOULD I HAVE HER BOOTH RENT OR COMMISSION? PLEASE HELP.
I have read alot of these…my only comment is as a salon owner on commish or hourly you pay payroll and employee taxes thru the nose. I’m thinking of changing over to booth rental because the taxes kill and splitting my mind from owner to stylist to babysitter to stylists is affecting my work.
I’m opening a salon soon I’m still stuck about being a commission salon or booth rental. I really don’t want to pay out the nose on employee taxes. how does a misc 1099 work if your a commission salon. please help.
my wife is a stylist. she rents a booth in a small salon that only has 3 chairs. we’ve never missed rent and never had to postpone rent. so, my question is can the owner tell her when she has to work?
plz email me……
cjvanderford@yahoo.com
I own a small property management company and I would like to rehab a property to use as a salon. I figured using the booth rental system would be best for me since I have only worked in Pharmacy, Property management and property rehab. What would be the best way to learn how to run this type of salon? Would a local school of cosmetology offer any programs?
I am a salon with independent contractors. The salon is open Tuesday through Saturday. Recently one of the IC claimed it was not legal to close the salon to her on Sunday and Monday. She stated that I the owner would be responsible to pay her taxes if she was not allowed to work on those days. Please let me know if this is true.
I’ve worked at commission based salons and the booth rental system. I’ve found that I made more money in the booth rental system than the commission based system because, it was my responsibility to advertise and provide quality, professional service on my own terms. I had more freedom to be creative with my marketing and services. The commission structure is only beneficial to the owner and not the stylist. You only make maybe 40-60% of the money the Salon(not you) charge to do the service. You have to follow their rules for advertisement, services, and the products you use. If you want to make money as a stylist, the booth rent system is the way to go because after your rent, all you make is all you keep.
This comment is for LIZA. If you think twice, you are the genius in your family. People sometimes try to scare you into doing what they want you to do. You do NOT have to pay taxes for anything other than the boothrent you collect and the money you yourself make from your own clients. Think about it the government in its 400+ yrs of existence never made people pay taxes on money someone else DID or DID NOT make! And they never will!
I am in the process of opening a salon and am also finding it quite confusing when trying to choose which type of salon will best suit my business taste. I would love to operate a commission based salon because it seems to be a more unified business plan. On the other hand, it seems like a little less hassle to rent booths and allow stylists to be resonsible for purchasing their own supplies. I’m on a 7 month countdown until my salon opening but can’t seem to sort this problem out. Please help!
Liza,
Put her out and let her find a 7 day a week salon. She sure won’t be on booth rent. I’m sure you told her your hours when she was hired. This is why commission salons are better. Booth renters will drive you crazy with their ghetto ideas. You are the owner, put your foot dow and stand firm! That’s legal.
hairmoods@aol.com
I’m a commission based salon owner and I don’t like messing with paperwork because I am too busy. I hired a salon mgr to come in 3 hours a week and handle that for me. It works out great and also we have online booking which keeps very good records for us.
can you do both with one stylist like booth rent and commission? also with the commission based, aren’t the stylists responsible for their own taxes, insurance and all?
It would be a mess to try and do both. Try and understand the benefits of either option and decide which is best for your salon. With Commission based salons your stylist are your employees; so they are on your payroll and they would get a W-2 at the end of the year. A booth renter has to report their own earnings at the end of the year, and have to get their own insurance. Hope this helps.
i am scheduled to open my salon april 2009 i ran across this web page and i wanted to do booth rent in my salon but now i don’t know this is my 1st salon i have a total of 3 stations including my station as well i have a contract with everything i want and do not want at my salon including rent hair shows the just everything in this contract i guess my question is if they are doing booth rent do they have to follow my terms that i have in this contract b/c on this webpage it seems like i would have to do commission for them to be in this contract also my salon is in a very busy & great location in the city that i live and i was wondering what is a good price for a booth rent maybe 150 – 200 wkly is that two much
I am schedule to open a salon the summer of 2009! It has always been my desire to have a salon that would embody a team spirit and provide a educational bases for the professionals in our salon as well as the cosmetology professionals in our community. The closer I get to an opening date & being a lone ranger in my community where booth rental is so norm I am wanting to know if offering salary plus a strong bonus structure only or to do a combination which is best. I have been in the industry for 17 years but I do not do hair; I have been a co-owner, manager, assistant to stylist, salon designer but I do not do hair and it has presented a problem in that my partners in the past the work as manager, cushion finance person, mantenance, assist, has not been respected because I do not do hair and as a result I have been left holding the bag twice. Please give me guiduance ideas that will make both the salon & myself as an owner successful
I have had my salon almost five years and I do booth rental. Booth rental ha.s stressed me out so much. Stylists seem to come with so much drama, “there own rules” and all kinds of ” I don’t feel like working today!”
I am so ready to switch to comission! I have just about cleared my shop out now I think I will take some business classes and follow my instincts. I don’t ever want anyone else coming in my salon telling me what they are not going to do. The headache just is not worth it. That little bit of money every week is not worth it when you have stylists treating customers any way and then stamping your name on it.
Ok guys n lovely ladies!!!!!!!!! I have been a booth renter for 4 yrs and have worked for 4 different salons in my city. The reason for moving so many salons is because I realize after a while that it is strictly a lanlord/ tenant relationship from owner to stylist. I’m very picky with my surrounding because my clientle for the most part are pretty conservative and I truly believe in the ultimate salon experience….think about it do our guests pay for a haircut or a haircut experience???? So anyway I start to realize I can’t control the other stylists mood,looks and bad attitudes.. also, I can’t control foul language offensive comments children running around in the salon people stealing my color, or anything for that matter…so I jus move to the next hoping for a better environment..well, it jus gets worse and I’ve come to realize I’m meant to open my own salon though small but something that will work for me because some of these hairdressers really give hairdressing a bad name….anyone seen tabitha salon takover…um yea bbbuuuuuttttt!!!!! I’m single living on my own and don’t quite have the money but my cowerker is opening up an amazing huge brand new commission salon in my city and knowing from experience how amazing commission salons are supposed to be it seemed like the greatest oppurtunity for me….now I’m left super stressed and not knowing what to do so tell me what u think…I have a full clientale approx 270 to 290 clients…..part time assistant ….I charge 25 to 40 for a haircut…….anywhere from 65 to 120 for color and make really good good good money…I control my sced….but my supplies which btw I spend very low on color because I try to buy smart and my boothrent is actually very low so I would say I am a very great passionate and well known artist in my area……so ? Is am I crazy to go on commission split 50 /50 percent have all of my clients I worked very very hard for go into a computer system which makes them the salons client where all pitch black everyday and be told when to come and go even when not busy also participate in all education shows etc w no pay…in hopes of this amazing environment???? I’m worried but the numbers don’t lie how do u justify making 5 to 7 thousnad a month and have never advertised to splitting it down the middle…..they say raise ur prices but really by how much in a struggling economy when people r going lower maintence anyway…….I could go on and on I jus need understanding on this because if this doesn’t work I’m building a shampoo bowl in the garage haha thanks people…………I love our industry …..let’s look a bit closer and take the blinders off what’s really going on out there…please comment I’m super anxious anyone going thru the same
I feel u on that , but a legal contract allows the owner to set rules and guide lines to those who wish to come in and work as a team….
I have a salon with eight booth renters. I want to start to change over at least one chair to a commission structure arrangement and need information on examples of commission structures I can implement. Do I do straight commission, an hourly rate with a reduced commission structure? What are my options? Please any advice would be appreciated.
Renting and commissions both have positives and negatives for the salon owner and independent stylists.
Here’s the renting positive for the owner. As you long as the policy and procedures have legally agreed upon and professionally understood, salon owners can have a wonderful partnership with stylist. Salon owners, by creating a nice, pleasing environment can generate rental income from, hopefully, classy stylists who add value to the overall value to customers’ experience.
Here’s the renting positive for the independent stylist. The infrastructure is in place: lights, water, air conditioning, chairs, cleanliness, etc. You can set the schedule that pays your bills and enjoy some independence.
Here’s the negatives for the salon owner. The independent stylist is not professional, not a team player, will not step up to plate in those incidences when you are not available or busy. You don’t need drama kings or queens to disrupt the salon ambiance you chose to set. This brand of independent stylist needs to step…yesterday.
Here’s the negatives for the independent stylist. Make sure salon owner is not abusing your kindness. Since your name is not on the lease, not on the business permit, not who the product reps should see, the owner may try to make you feel guilty because he or she is not managing the business right. If you find yourself losing a lot of money because you are actually “running the salon”, then you and the owner need to conversate…yesterday.
Snap…forgot about the commission side.
Ultimately, the commission side of the business is overall the best option, especially if the salon owner is a student of the business. The commission side works when the salon owner is spending more time developing new business than working behind the chair. Ideally, the salon owner should hire a managing stylist who is paid to handle day-to-day operations of the salon while other junior stylists are servicing customers. New and seasoneded salon owners need to study the business and have a business plan.
I am a soon to be saon owner, vey nw to th business. When you run a booth rental salon, how much do you charge for rent? When you run a cmmission based salon, what precentage goes to t owner and what precentage to the stylist?
I just recently opened a booth rental salon, Jul will be a yr. I have friends that have booth rental salons and those that have comm base. My take on it is either option you choose there are going to be pros and cons. It boils down to you as the owner assessing your own situation to decide which choice will work BEST for YOU. Just because so and so has a successful comm salon does not mean it will be the same for you. There is soooooo much that come along with having a comm salon. Highly organized being top on the list, taxes,taxes and more taxes, high turnover rate of stylist if the’re impatient with waiting on clientele to build if you are a brand new salon trying to establish a name for yourself. Advertising bill, salon software if you want it to operate smoothly, payroll because if you are a stylist you will need a receptionist, An accountant (a good one), and the list continues. Then on the flip side you have the booth rental salon, I believe the BIGGEST problem is you have owners who operate a booth rental salon as if its comm, and you have Booth renters who expect the owner to do what is provided at a comm salon. If you are renting a booth to a stylist they are considered independant contractors. Basically come and do as they please. The irs website define the diff between employee (comm salon) vs independant contractor (booth rental salon). If you are claiming to be a booth renter then you are just that, you are renting space from the owner, whatever you need is your responsibility, including getting your own clients, you should not expect the owner to provide them. As far as the financial side typically an owner does not make money from operating a booth rental salon unless they are a stylist themself or if they’re fortunate enough to find an inexpensive bldg lease and have multiple renters. Which should be the goal because you should not have to close your doors if all of the stylist decided to leave. With a comm salon the potential to make a lot of money is there, but In doing my research it appears that you also need quite a bit of money to get it started if you want to do it correctly.
Hi!! I open a shop up 3 months ago. Well I am only speaking my opinion. I think commission would be better. For my reason is people don’t want to pay booth rent and if you get your money when they make it. Then you can’t go wrong. I think it is selfish for a person not to want to pay booth rent or commision when everything is on the owner. Really the stylist is making all the money. That’s my opinion.
salon owners who are booth renting there is certain requirement that we need to implement in our business what ever it is that you are paying for the space that you lease plus light water etc need to included in you weekly or month rental fee to these booth renter if your lease is say $2000 not include light,water or phone divide by the amount of stylist chair you have say 7 that’s the AMOUNT the need to be charge for booth rental if that were you wont to go if you are looking to build a brand name salon out there commission base is the way to go you have control of you destiny (redken regis aveeda ) just to name a few they dont ever booth rent that’s what make them successful we can’t afraid we can do it if you build it the will come the good one that understand what it takes to run a business successful.
Just wondering whether or not a salon that traditional has always been a strictly commission and/or salary salon can successfully mix the booth rental concept with it’s existing business model?
Need some advise from long term career folks please! I am a makeup artist who was not working in the field for awhile and recently took a part-time receptionist job in a salon. After the owner saw how well I do makeup he has asked me to do several applications for clients. The clients and owner were thrilled with the results. It is a commission salon so I will be getting commission, but the owner has not discussed the split. I’m only 19 and have not negotiated anything like this before and am concerned the owner will try to take advantage of me. Can you lovely ladies and gentlemen tell me what a “normal” commission would be and how to handled being low-balled? All advice will be greatly appreciated! Thank you so much!
Katie
I have work for a small salon as commission stylist, I opened the doors with the owners and built this buisness from the ground. Anyway after a year Im just a busy as my boss but im getting the shaft. About a month ago they stopped paying me for the product that I sell because they are paying intrest on the credit card that they put the product on over a year ago. I just dont know if that is right and i dont know how to approch them. Also they told me that if i want to go to booth rent i would have to pay$400 a month plus utilitys. I was just wondering if thats is right for them to do or should I say something. Please email me back Dklingele21@yahoo.com
I just started work at a commission based salon. I am not pleased after getting in there to find out that if the client pays with a credit card the owner takes an extra 3% of the already 50/50 split we are doing.
And we are responsible for our own advertising and no taxes are being taken out of my checks. She said she will give a 1099 at the end of the year.
after reading all of the other responses I think I am getting screwed??
Opinions? Please email me JenMom2dd@gmail.com
I have been a salon owner for 9 years, I do not feel booth rent or commisson is a good way to run a salon business. I run a team based business and my sylist are paid hourly pay. Pay rates range from 10- 23.00hourly. I provide major medical and dental and 401k retirement plan. I started my business with the intentions of leaving my children a legacy I decided to work hard so they won’t have too. In the salon industy we allow stylists to take to much control away from our businesses. Auto mechanics do not go to the dealerships and rent their cranes or space. You go to school to learn skills to be competitive so that you will be an asesst to a company. The more knowledge and skill one has the more money you make. If I were forced to choose I would choose commission with a hourly rate of minimum wage that way your commission levels can remain around 15-30 percent. More salon owners need to stop partnering with sylists. Start a business not a partnership. You should be able to leave your business at any time and you should be able to return like nothing ever happened. If you can’t do that then you don’t have a business, you just rent a space for all of your friends to do hair in and you all are splitting the bills and the so called salon owner has all the liability.
I am 4 months out of school. The salon I work at is commission or booth rental (optional) Commission is 50/50. When I came to work at the salon, I figured it was a nice clean work environment unlike some of the surrounding salons. I am supposed to only work on commission until I build my clientele; this was understood from day one. While on commission you are allowed to take walk-in. There is no register. All the money goes into her pocket and divided at the end of the night. Still no problem here, cleaning no problem. My issue is I am not the type to sit around if there is no business. She has specials when she feels like she needs them. True she’s in charge of all the marketing, so why am I passing out flyers? She doesn’t want me to get business cards made with my cell number on them. ??????????? It seems to me as if she wants to keep me on commission. My question is why you would want to keep someone beneath you? This is my fault because as intelligent as I maybe. I’m not that good at judging character. An alarm should have gone off when, I found out how many workers she has had in the last year and no one is there now. That shows that the problem my not have been the workers but maybe the management. Agitated and so over being stressed.