We were a commission salon (with a few booth rentals in the mix) for over 6 years at both of our Salon Dajay locations. I was working steadily behind the chair, unable to stop to smell the roses and realize how appreciable renting really was for our stylists and myself! Instead, we listened to a few well meaning leaders in the industry and began to steadily weed out our rental stylists in hopes for a commission only salon to create more uniformity and profit!
But it was the same thing everyday, employees didn’t show up, receptionists didn’t clock in, no one wanted to work Saturday’s, a client was upset about their hair, an appointment was scheduled for the wrong date, this one’s kid was sick, that one’s car broke down, everyone wanted more commission, she needed a longer lunch break, he wanted off on Friday’s, it literally NEVER ended. No one was happy and all the while, everyone was also suffering financially, including myself!
It took removing myself from behind the chair and a lot of time to think, but fast forward to today, and we finally have it down pat with a model that is the very opposite of the commission salon we set out to become! We are now chair rental only at both Salon Dajay Rental locations and I think I can speak for myself and all twenty nine of our stylists when I say “what a WORLD of difference it has made”!
When we switched business models, we threw this on our stylists rather quickly, giving them a choice to rent a chair from us or eventually find another commission salon to call their home. Thankfully, all of our girls stayed with us (love you guys), even though I knew some of them were a little weary of being on their own in the beginning. The tremendous benefits these women (and myself) have gained over the course of a year while becoming their own boss in the salon industry are startlingly impressive! If you’ve been on the fence about switching from commission to booth rental, read on about the advantages I’ve witnessed over the last year and you may just jump on over…
Set Your Own Schedule
This is probably the most beautiful thing about being the President of your own company! If you aren’t morning person, you don’t have to be anymore! Hate working Saturdays? Don’t. Want to take a two week vacation? Go right ahead! When you work for yourself, you literally work whenever you want (as long as you pay your rent, of course). I talk to a lot of commission stylists that have a hard time wrapping their head around the fact that they don’t have to come to work if they don’t want to – probably because it does sound that amazing! Whether you are part time and have availability to use your chair three day a week or full time and could come in everyday, it’s completely up to you! Would I advise coming in everyday that you have your chair and make sure you stick to some sort of schedule? Yes. But that doesn’t mean a sick day or broken down car won’t come up once in awhile and now, without your boss getting pissed!
But I want to use Redken haircolor! So do it.
Most commissions salons tend to be loyal to one brand or another. So what happens if your salon uses Paul Mitchell but you want to use Redken? Well, you might want to find a different salon. Getting a salon owner to change their entire line because of what you favor is probably not going to fly! But guess what? Ding, ding, ding – that’s right! When you work for yourself, you can use any product line you want! Wow, this rental stuff is really starting to sound amazing, isn’t it?
How much money can I really make?
If you and your salon were 50/50 split, you would be taking home $40,000. However, with the cost of overhead, most salon owners tend to do a 60/40 split with their stylists, meaning you would only be taking home $32,000. And let’s not forget about taxes!
Employee taxes at around 23.61% means your would be subtracting a whopping $7,555.20 for the IRS.
This would leave you with around $24,444.80 If you have kids, own a home or any other large tax write offs, it could go up to around $26,000 for that year.
Pre tax and pre expense, you would be taking home $80,000.
Minus major write offs:
- $150/week in rent (150*52 = $7,800 for the year)
- $5,800 in product cost (estimated based off of ~3 colors a day)
This brings us to $66,400 for taxable income, minus 15% self employment tax, which leaves us with $56,440. We would then subtract your expenses from your take home pay ($56,440 – ($7,800+$5,800) =$28,400) leaving you with $42,840 per year, possibly up to $45,000 if you have kids, own a home or have any other large tax write offs.
As the numbers speak, you would earn over 50% more per year renting as opposed to working in a commission based salon. One of the other great things about being your own boss – you collect your own payments! Most of the girls at our salon use square to process credit and debit cards (get yours here : https://squareup.com/i/DCED5156 ) and funds are available the very next day as opposed to getting a check every one or two weeks when working in a commission salon!
You aren’t held by the balls when you work for yourself.
I met with a stylist today interested in renting a chair from us who was attempting to leave her current commission salon. She has been working at this salon for several months, fostering relationships with new clients and building off of them in hopes to one day do something bigger and better. Now she wants to leave and begin working for herself. No big deal, right? Just pack up your stuff, inform your clients and come on over! Not so fast. In order to inform her clients, she would need to contact them and let them know where she was going and unfortunately, at her current salon, she isn’t allowed to give her clients her phone number or take theirs.
When she started to think that her current salon may not be the right fit for her, she also realized that when she leaves, clients won’t be able to follow her! This is a standard school of thought in many commission salons but is actually very unfair to all parties :
- The client – we all know, when a client finds someone who can finally do their hair, they will follow them to the end of the earth. Now, the client will be forced to try a new stylist in the same salon when 9 times out of 10, they won’t be happy and will begin searching for their previous stylist.
- The stylist – the stylist has worked month after month retaining their clients and when they decide to make a change in their career, they are left with nothing and have to completely start over.
- The salon owner – I can attest to the thousands of dollars that can be spent trying to get clients in the chairs of your new stylists only to have them all take their money elsewhere when your stylist finds a new home! It’s pretty unfair for the owner to lose the income that their hard earned money was spent to attain.
So how do we fix this problem? It really doesn’t seem like anyone comes out on top in this situation unless the stylist stays with one particular salon for their whole career, and we know how realistic that is. My suggestion? Everyone should be their own boss (also unrealistic, lol). But really, working for yourself and taking your clients anywhere you go VS being virtually married to the salon you work at as they are hold your clients over your head….Hmmm, I would definitely take the latter.
I can finally brand myself!
How awesome is it when someone recognizes you for what you do instead of the salon that you work at? I’m not saying that the salon should never be recognized, but we all want to stand out in this big world and be able to take credit for the amazing work we do! When you work for yourself, it’s much easier to branch out and become your own brand. You can do hair your way, use the products that exemplify your innate creativity, work at times that you’re at your best, and create an outcome that totally screams “I did that” instead of “my boss stood over my shoulder and made me do that”!
And those tax benefits..
I can tell you from experience that taxes scare A LOT of hair stylists and may keep some of them trapped in employment. We are creators, not counters, right? First and foremost, please don’t let taxes scare you! That’s why we pay these wonderful people called accountants to guide us in the right direction and make sure we don’t pull our own hair and everyone else’s out!
Second, you can actually save quite a bit being your own boss! You can write off multiple items that most people would have never dreamed of : your car, home office ($5 per square foot with a maximum of 300 square feet), any office furniture, salon furniture or equipment, software and subscriptions, gas, travel, meals, entertainment and gifts, insurance premiums, retirement contribution, social security and telephone and internet, just to name a few! When you work for someone else, the boss gets to write all of these things off! When you work for yourself, you get to!
For those interested in being a little more involved in your taxes, Quickbooks is a great tool for the self employed and it’s only $5 per month! Get yours here https://www.referquickbooks.com/s/jaceycurd.
You are in control of your destiny!
Ultimately, you are always in control of your own destiny. However, sometimes we get ourselves in situations in life where we don’t feel as if we are in control anymore (and we really aren’t). When you work for yourself, you control how much money you make! Sounds kind of crazy, right? It’s not, it’s completely up to you. If you’ve always wanted to drive a nice car, work harder and get it! If you’ve dreamed of building your own house, put in an extra day every week and start saving! Nothing is out of reach when you are working for yourself because there are NO LIMITATIONS! No one is drafting your schedule or setting your prices or feeding you clients, you are doing all of this for YOU.
Now I can definitely see a negative side to this working for yourself thing – you know, those people that like to talk about all of the awesome stuff they want in life but have no self motivation to actually work for it. Not to sound negative, but if that’s you, you’re better off staying in your commission salon because your business will die very quickly without someone holding your hand.
No one is going to work for you but you and you sure as hell aren’t going to get handed anything so don’t sit around and wait for things to happen. MAKE things happen and take control of your destiny!
Go make your plan!
I wake up every single day knowing what I live for, work for and what is important to me. I have a PLAN. I know my family always comes first, I know that I love helping stylists and salon owners become successful and watching them grow, and I know that someday I want to franchise my salons and continue developing the careers of stylists! Everyday, I work toward these values and dreams. I make sure that every step I take is a step toward what I want my life to be like. Think about your own life for a moment. Are you living by the values you’ve set for yourself? Are you happy with the career path you are on and the hours you are putting in? If you can say yes, then don’t change a thing! If you can’t, take a moment and write down your values and dreams or make a vision board and hang it on your wall so you look at it everyday! Don’t let life slip by without knowing you gave it your all, it can happen so quickly!