Do you love where you work? Have you ever wondered if there was something else out there better for your career? Or have you just graduated Cosmetology school and find yourself confused on what the next step is?
There are two main kinds of salons: commission-based, and booth- or suite-rental. In this week’s post, we’ll be going over the differences between the two, so any students, recent graduates, or stylists looking for a change can make the best decision for their future and career! The Beauty industry has so many different routes to success. They don’t all have to look like being a business owner. You can be a part of an amazing team and contribute to something much bigger without having the stress and risk of owning. The Amanda Moncur Salon is a commission-based employer, and we want to help you decide which option will give you more freedom and money in the long-run, so you can spend your free-time wherever you want!
Products to sell:
At a commission salon, all the products that you sell for retail are provided for you. The ordering, stocking, and inventory is all done for you by staff paid for by the salon, and you also get a 10% commission paid for on all your sales.
In a rental situation, the stylist is responsible for investing in any retail products they want to sell, ordering them, receiving them, and stocking them. One of the most difficult aspects of working a rental salon is that you’re all on your own in many respects.
Advertising & New Guest Recruitment:
At a commission salon, your advertising, scheduling, and phone calls are all taken care of for you by the salon’s receptionist. You also benefit from the paid marketing done by the salon, such as Yelp ads, Google ads, email and text marketing, referral and rewards programs, social media advertising, Youtube presence, as well as brand recognition associated with the salon!
In a rental salon, the stylist not only needs to invest their money to pay for ads and marketing across any platforms they want to advertise on, but they also must invest a great deal of time to create content to advertise with, in addition to whatever time is spent behind the chair.
Credit Card Fees, Accounting & Taxes:
In a commission salon, all credit card fees are paid on your behalf, and the fees do not come out of your paycheck! It’s similar with taxes–your employer will match your taxes from your paycheck, lowering your tax burden and your tax bracket. They also pay taxes for you on all sales. Accounting is worry-free, as you just need to take home your employer-provided W-2 at the end of the year!
As a renter, credit card fees come out of each transaction you do, making your bottom line shrink. Additionally, as a business owner, cash apps such as Venmo and PayPal now report all of your transactions as taxable income. You’re also responsible for paying your own taxes, meaning you have to set aside at least 35% of every paycheck to pay your taxes quarterly and at the end of the year. You’re also responsible for paying monthly sales taxes. Filing your taxes becomes complicated, meaning you may need to hire an accountant or a tax professional to help you.
Color & Backbar Supplies, Extension Inventory:
In a commission salon, you don’t need to worry about supplies! All color, caps, gloves, cotton, bowls, brushes, whisks, trays, shampoo, conditioner, styling products, treatments, hair extension stock, and hair extension installation supplies are ordered, received, stocked, and inventoried at no expense to you, so you can just show up to work and do your job!
In a rental, you’re responsible to invest in all of the above products, and spend your time ordering, stocking, and inventorying everything. This is an investment of time and money, meaning you have to spend time on your business even when you’re not doing hair.
Beverage Bar & Other Salon Amenities:
All amenities are provided for you in a commission salon! At the Amanda Moncur Salon, we provide any beverage you can imagine, including Nespresso coffee, soft drinks, hot chocolate, and ice water. All of these supplies are paid for by the salon and re-stocked for you.
In a rental, you are responsible for paying for, re-stocking, and providing whatever amenities you want to offer your guests.
Booking Software, Website, & Front Desk Staff:
These expenses are taken care of for you in a commission salon! We provide all booking software to make your scheduling easier, along with a receptionist to manage all booking and phone calls for you. We also pay to provide a website with online booking functionality to make your client’s lives even easier!
As a renter, you are responsible for handling all of your own booking, paying for a scheduling software/online booking, paying for a website, and paying for a receptionist if you want any help with managing your online systems and phone calls, meaning further time spent on your business when you’re not behind the chair doing hair.
Assistance within the salon:
At a commission salon, we hire assistants for the express purpose of helping you with your clients! Someone will always be there to help you wash, blow-dry, style, check-in, and check-out your guests. This greatly reduces your work-load, and frees up your schedule, so you can take on more guests, increasing your paycheck.
At a rental, you are on your own. You are responsible for handling all of your guests from the moment they walk into the salon, unless you hire an assistant out-of-pocket. Without an assistant, your schedule isn’t as open, meaning you can’t take on as many clients.
Rent, utilities, insurance, & business licensing:
At a commission salon, you don’t have to worry about any of these things! All rent, utilities, licensing, and insurance are paid on your behalf, so you don’t have to worry about anything.
As an independent renter, you need to spend your free time paying all these bills out of your own paycheck, and finding a good self-employed health insurance and renter’s insurance. You also must do all the paperwork to license yourself as a business.
Education and personal development:
At the Amanda Moncur Salon, we provide a guest artist once a month, plus weekly training and team travel opportunities to shows and classes, all at no cost to you! You also get to learn goal setting & accountability strategies from a seasoned business owner, which teach you how to earn money more efficiently.
As a renter, you must find and pay for any additional educational opportunities, and hire a business coach to learn what Amanda would teach you for free.
What does it cost you to work in a salon?
In a commission salon, the cost for having all of these services provided is 50-60% of your service sales while you work behind the chair. This may seem like a lot, but the biggest benefit is that you get to keep all of your free time. You get to come to work, do hair, and then go home to your family and spend your time however you’d like!
Renting a booth or a chair at a salon, you’ll have to invest 50-60% of your income back into your business, along with all the time that must be spent running and managing everything, which you don’t get compensated for. Rather than spending time with family or friends, you’ll have to spend your time managing your schedule, placing product orders, organizing and inventorying your rental space, cleaning your space, and managing your marketing.
So, which option sounds better to you? We may be biased, but at the Amanda Moncur Salon, your free-time, work-life-balance, and continued education mean the world to us. We want you to be compensated for the time you spend working, and we want you to be able to make the amount of money you want to make.
The hair industry is truly unique in the sense that you can make as much money as you want! It all directly connects to how much time and effort you put into it. However, time spent doesn’t always equal money earned. You can rent a suite or a booth, spend 80 hours per week working yourself silly, and still have less to show for it than if you work 40 hours per week at a commission salon. It’s all about working smarter, not harder. Why work harder for the same amount of money?
We hope this article was insightful for any professionals out there looking to make the best choice for their future! If you’d like to join our team, please visit www.amandamoncursalon.com/join to check out our available positions! We’re always looking to elevate the industry by training the next generation of hair masters!
