The Great Debate:Rental Vs. Commission
There are two main options when you are working has a hairstylist. You can choose to join a salon as an employee paid on commission or choose to rent a chair in a salon. When I was in cosmetology school I thought I would absolutely rent a chair. In school I learned about the value of completing an assisting program and continuing my education which is the path I ultimately chose. Having been in the industry for nearly ten years now, I can see the pros and cons to both working rental and commission so let's clear up the great debate a little bit.
Rental Salon Pros
- You can make your own schedule. This is probably the biggest pull for most people especially if you have kids or a busy social calendar.
- You can offer whatever services you want at whatever price point makes sense to you.
- You are essentially a business owner so you can design your website, business cards and other marketing materials however you'd like.
- All of your income is yours to keep and do with what you want. You don't need to tell the owner of your salon how much money you make nor do you owe the owner a percentage of your sales.
- Business owner tax perks. You can write off the cost of purchasing haircolor, retail products, marketing materials, rent, education, education travel expenses to name just a few.
Rental Salon Cons
- You need to generate your own business. Since you are just renting a chair, the owner won't generally do much to help you get clients so you'll need to work hard to market yourself.
- You need to create a system for ordering and organizing your stock of color and other backbar products. If you aren't organized or don't create a system for yourself you could potentially run out of colors or over purchase and end up wasting money on products you don't use.
- You'll need to plan for a trip or two to the beauty supply store each week to stock up on haircolor and other products.
- You need to pay taxes quarterly. You'll have to keep very detailed records of your expenses and income and estimate your annual income in order to pay taxes annually. If you don't pay enough quarterly, you'll have a huge bill to pay at the end of the year.
- You won't receive any benefits like insurance coverage, vacation days, free education, a retirement account so you'll need to set aside money and pay for these things yourself.
- If you should get pregnant and have a baby, you won't be able to file for maternity leave benefits from your state because you don't pay into the state disability account. You will also most likely still need to pay your rent even if you are out on a maternity leave.
- You'll be responsible for paying rent regardless of how many clients you have. If your rent is $300 per week and you have a slow week and only generate $400 in services, you'll be left with only $100 in your pocket to pay for your haircolor, groceries and any other personal expenses you have.
Benefits of working on commission
- You'll receive a weekly or bi-weekly paycheck from your employer with taxes already deducted and accounted for.
- Your hair color, backbar and retail products will most likely all be purchased by the salon owner for you so you won't need to be making any trips to the store to stock up.
- You can potentially receive benefits like vacation pay, medical or dental insurance, contributions towards your retirement account, free education, free station products.
- You'll be a part of a team all working towards the common goal and believing in the culture of the salon. Often this leads to less drama and a more peaceful working environment.
- You may have the potential of having an assistant. Working with an assistant potentially doubles your income because they can be applying you haircolor and doing blow-dry styling while you focus on foiling and haircutting.
- You don't have to pay rent and often times your commission is supplemented with hourly pay if you have a slow day.
- You'll be contributing towards the state and federal benefits systems which means that you can file for short term disability benefits if you want to take a maternity leave or if you injure yourself on the job.
- All of the marketing materials will be provided including a professional website, business cards, brochures, gift certificates, etc. The salon should run monthly specials and promotions to help you increase sales and build clientele as well.
Cons of working on commission
- You'll most likely need to work a structured scheduled based on whatever hours your employer requires.
- You will have to use whatever hair color and retail lines the salon has selected to bring into the salons. It is very rare that a salon would make an exception to this rule.
- A portion of the proceeds from each service will automatically be kept by the salon owner. The portion that is kept is used to cover all of your benefits and the cost of having you working in the salon and a small portion is profit to the salon owner as well.
- Your service pricing is determined by the salon owner and generally can only be raised and lowered on the discretion of the salon owner.
- You must request and be granted time off if you wish to take a vacation or an extra day off.
- Your salon owner can determine how you dress, what your marketing materials will look like and the decor of the salon and you won't have much say about it.
Whichever arrangement you choose, make sure that you sign an employment contract that details exactly what you will and won't be responsible for upfront. If it's not in writing, it's meaningless so get organized from the start and be clear about what you're signing up for. xoxo