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Full Version: former salon owner in a new situatiion..dilemma of booth ren
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I am a former owner of a salon & have relocated to a new city where i would have to build an entire clientele from scratch.
I found a very good location in the downtown of the city and the salon owner is wanting to know which would i prefer booth rent or commission.
I have been out the loop so long that I do not know which is better for me at this time.
what is the going rate for a nail tech doing booth rent or commission?
i would rather booth rent but don't know if that would be beneficial for me at this time with ZERO clientele
Asked for 2 free weeks & then to continue on with whateva we decide
please any advice QUICKLY would be greatly appreciated!
There's a salon owner in our area who does something really creative.

She charges 50% for each service for booth rent till the nail tech or hair stylist builds her clientele.

For example, if a new set is $50, the tech pays the owner $25. If a fill is $30, the tech pays the owner $15. When the tech has met the payment for the booth rent, then she doesn't pay anymore. If the booth rent isn't made in a month, then the salon owner only accepts what the tech has paid for her services. This part of the contract goes on for 6 months. The next part is, if the tech and the salon owner want to continue, there is a discount on the rent if it's all paid at once. By then, the tech should have enough clientele to make it worthwhile to pay a monthly rent. Or, the tech can back out of the contract and move on. As far as I know, no one has left her salon and the owner has always had the rent paid. People seem to be very happy!

It's not commission. The tech buys her own supplies and she runs her own business.

Maybe your salon owner would be open to something like this! It's a great way to attract techs and help them build their business!
Oh, and accounting-wise, the 50% paid to the owner is considered rent, while the other 50% is considered income for the tech.
Harmonysky, this is very confusing to me. I thought that there was either a flat rate booth rent or it was considered commission. I thought that any time you control their money that would be considered commission regardless if they buy their own supplies or not? I wonder if its legal because she has the contract explaining all of this and both have signed it?

Guest

Harmony's suggestion is exactly what one salon did for me when I was new. It was still my business, I paid for my own supplies, I kept track of what I brought in, paid her a percentage in what I made, but not more than my booth rent. If I made less then that is what my rent was.

From what I read the original poster said nothing about signing a contract. Even if they did it would be written into the contract.

Not sure how the IRS would view this, but since she is not getting a check from the salon owner I don't see how they could view it as commission.
Quote:I thought that there was either a flat rate booth rent or it was considered commission. I thought that any time you control their money that would be considered commission regardless if they buy their own supplies or not?

It's booth rent but not "flat rate". The tech pays the owner instead of the owner paying the tech. That would be commisson. It's rent based per service rather than monthly. The owner doesn't control the tech's money,but accepts the rent in smaller increments than one monthly payment. The benefit to the tech is that for 6 months, the tech only pays the rent for each service performed up to the normal amount of the rent. If the tech doesn't have any clients for a day, then no rent is paid. After 6 months, the tech has built a clientel and the tech starts to pay monthly, monthly rent is discounted to entice the tech to stay. I doubt the owner loses money with this. People are still there and are very happy!

I think it's a great way to help people get started in this industry!
In dollar amt what is the going rate for rent? Or commission?
I was recently at a shop for a short time & was paying $100/wk but if I made $300-400/wk that really hurt. is $50-75/wk pushng it? That seems more do-able starting off. I just don't want to hear $150/wk yet..maybe in 6 months and by then the weather will be warmer.
Thank you all for your advice
da nail lady :
> In dollar amt what is the going rate for rent? Or commission?

It is based on your location. Since we don't know where you are, you probably won't get any replies that are meaningful to you. Tell us where you are and hopefully someone will be able to help Smile

Guest

da nail lady :
> In dollar amt what is the going rate for rent? Or commission?
> I was recently at a shop for a short time & was paying $100/wk but if I
> made $300-400/wk that really hurt. is $50-75/wk pushng it? That seems more
> do-able starting off. I just don't want to hear $150/wk yet..maybe in 6 months
> and by then the weather will be warmer.
> Thank you all for your advice


It really does depend on your area. Best suggestion I have is to shop around in your area and see what the average rate is.
My salon owner has this same booth rent agreement with any new stylists she gets: a percentage of each service up to the price of the booth rent. Her tax guy confirmed it as legal. We're in WA state, if that helps.

Also, in WA, the average booth rental is probably somewhere around $400- $500 a month, depending on the location and quality of the salon. I personally am at $350.
Ok thank u all for your responses.
I will take all of your good info into consideration when she comes with an offer. I def want a 6 mos contract to give me time to build clientele before going up on my rent. And I will def try to pay a % of what I' make til weekly rent is met. Thank u ladies!
As for as $$ amounts go they can run a whole range of rates withing a 50 miles radius.

I live just outside Nashville, TN and pay $500 per mo (OUCH! considering I will have been there a year in December and still cannot make my rent!) But there are areas with salons that are only $50 per week and some in Nashville Metro area that are $350 per week. Crazy really.

It is really difficult to pay a monthly rent knowing that I can pay for my own, larger space, somewhere else. It's a Catch 22 really. You can either be off on your own paying the rent, fees for common areas, maintenance, utilities and so on, etc. but then have to pay for and really work hard to advertise and promote and so on too. Then, you can be in a salon where you are with like minded professionals (hopefully lol) and hope to pull from each others clients.

So far the later does not seem to be working for me. I am at the same position I would have been in before my Groupon ran - a mere trickle.
Growing very impatient. I realize the economy and back to school and so on but really getting hard looking forward.
Hi Harmony,
Ive been saving to go out to work. My job just cant cost us anymore...lol I love that arrangement that you posted! Im going to look around to see if i can find a situation like that.
Thanks
Cindy
Harmony, I think this is a great way to help someone succeed in this industry when they are starting out! In theory, I think this would work. I wonder though, what happens when the tech or stylist does not come in often and so therefore the owner is losing out on income. Do they only sign six month contracts so if it is not working they can both be free of obligation? I'm only wondering because the owner would not have control over hours so could not ask the tech or stylist to be there, but if they are not there obviously the owner can not make money on the booth and also could not rent to anyone else. I think this could become an issue with this type of set up.
Nail Raising :
> As for as $$ amounts go they can run a whole range of rates withing a 50 miles radius.
>
> I live just outside Nashville, TN and pay $500 per mo (OUCH! considering I will have been there a year in December and still cannot make my rent!) But there are areas with salons that are only $50 per week and some in Nashville Metro area that are $350 per week. Crazy really.
>
> It is really difficult to pay a monthly rent knowing that I can pay for my
> own, larger space, somewhere else. It's a Catch 22 really. You can either be off on your own paying the rent, fees for common areas, maintenance, utilities and so on, etc. but then have to pay for and really work hard to advertise and promote and so on too. Then, you can be in a salon where you are with like minded professionals (hopefully lol) and hope to pull from each others clients.
>
> So far the later does not seem to be working for me. I am at the same position I would have been in before my Groupon ran - a mere trickle.
Growing very impatient. I realize the economy and back to school and so on but really getting hard looking forward.

Anna Dea, I remember when you ran the Groupon promotion and how busy you were with it. Did you get any regular clients out of it??
Yes, I did Laura, but would not say many or even enough. What I find most interesting is that the last third I have done so far have been much more 'likely' if not already to rebook.