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Full Version: Time to raise the rent! Opinions please.
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It has been six years since the rent has been raised. I provide everything for the salon except the stylists own station supplies and tools. I supply...the stations themselves, all back bar supplies including shampoo/conditioners/deep conditioning treatments wax machine and supplies, washer/dryer, towels, soap and bleach, credit card machine, all cleaning supplies, paper towels/kleenex, coffee, tea, lemon aid, water, all break room supplies and condiments, business cards and salon menus. The salon is in a great location and even offers a back patio for clients to sit outside while they wait if they would like. I feel that in the six years at the same rent so much has gone up and i need to raise rent in order to maintain the environment that they are all accustomed to having. I need to raise them by $25 a week and i am afraid some of them are going to be upset with the increase. Do you think that it is fair to raise the rent this much being that it has been so long since I have? All opinions appreciated. Thank you!
hmmm... not sure what area of the country you live in but it does sound like a big raise to me, 6 years or not ...maybe you could ease into it somehow? Maybe start w/$15 a week ...and/or maybe reduce some of the extras to help compensate?? I'm assuming each stylist has a dry booth since you supply backbar? It seems you are supplying an awful lot. When I worked in rental situations - and is the common setting here - stylists have a wet booth and supply everything - I mean everything - for themselves. The salon owner did supply bathroom needs, cleaning products & cover the phone (no long distance calling permitted) ...every girl shared in cleaning but that can be tough as you always have someone who does nothing and someone who does way more ...good luck with this decision!
It's time to go up. Just let them know you will be doing this, it may be time for some of them to look at there does sound like you supply a lot . People not crazy they know thing go up . 25.00 is just one more hair cut for most a week or fill in for nails . I know we feel bad when we have to do this but bills do go up and come in every month
I guess it depends on what $25 a week looks like as a percentage. For instance, if your weekly rent is $200, then that is a 12.5% increase - which may be too high. It also depends on what rent is going for in your area for a comparable booth rental salon and how easy it might be for them to jump ship. The real trick might be doing incremental increases every two years instead of waiting 6 years. As a salon owner, I'm assuming that you know to the penny what you pay for each of the above mentioned amenities, averaged out over the course of a year.

If I booth rented, I would have those costs tallied, plus the built in profit amount to the salon, plus a reasonable wage to yourself for the time that goes into running the place (which is different than the profit).

So, if your average costs are $2,000/mo, and you spend 25 hours per month just running the salon - at let's say $18/hour, and you wanted a 10% profit margin, and you have 4 spots available to booth rent it would look like this:

$2,000 + $450 (hourly wage) + $272.22 (10% profit) = $2,722.22 needed each month

Then total booth rents would need to be $2,722.22 * 12 (months) / 52 (weeks) = $628.21/wk / 4 spots = $157.05/wk per technician

Obviously I made up these numbers, but the formula would be the same. Just make sure that you are accounting for all costs, including an average amount spent on repairs and replacing equipment, furnishings, signage, website maintenance, advertising, etc. on top of the routinely monthly costs. Just like with service pricing, if you have a formula using real numbers to calculate what the booth rent needs to be in order for you to maintain a profit as well as getting paid for your time in running the place, then charging the appropriate rent becomes a no-brainer.

What you supply is incredible.. I own a booth rent salon and I supply wash/dryer , towels, detergent, cleaning supplies, big bottle water for drinking, magazines, bathroom supplies, the stations and cart . Back bar, business cards, break room stuff, that's all on them.. Everyone takes turns washing the towels and taking out trash, and straightening up the common areas .
Why would you supply part of their business back bar bus. cards? credit card machine... they all need square up.. You might be considered and employer acording to IRS i don't know...
Ten years ago we used to supply all that, but it stopped when we took over didn't want any trouble with IRS...
They are booth renters.. that should be on them.. I look at it like this... times are hard still... what do you get if you rented space at a flea market? space and electricity? I might be wrong but I've been doing it for 10 years with most of the same people... Hope this helps...P