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Booth Renting vs Commission employees
07-25-2011, 01:27 PM
Post: #1
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Booth Renting vs Commission employees
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Hi Guys,
As from my previous posts you might know that I am new to the nail salon business and I have a lot of questions.
I would like to know some of the benefits of renting booths or to have hired employees. As the salon will be new do you recomend having more or less booth rentals or more comissioned employees?
What are the benefits of having a booth rental vs comissioned employees for a new salon?

Thank you guys for your help.
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07-25-2011, 02:04 PM
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Footie and Nailgirlerika are very knowledgable in this area. I hope they see your posts soon. You will at least be able to get a few different thoughts soon. Im a booth renter and I have no wishes to own a salon, maybe my own single person studio so I cannot say what the benefits are for each. I can say from a renter and previous employee stand point that I prefer being my own boss, setting my own hours, and menu, dress code and controlling my books, money, vacations and so on. But I also think there is something to be said for going to work, clocking in and having the stress of business on someone else's shoulders.
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07-25-2011, 02:22 PM
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Thank you sobeit.
I look forward to their answers.
Im looking for answers from an owners point of view.

THANK YOU
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07-25-2011, 08:51 PM
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I've had my own salon and had employees and I'm a booth renter now.

the benefits of employees is that you know they're going to be there during certain times. You set the hours and they're going to work those hours. You can control the product and services, so you're able to maintain a certain level of quality control.

With a booth renter, you will get no income from them other than the weekly rent. Whether they work one day a week or 7, the rent remains the same unless you write it in the contract differently. You have no say so at all as to when they work. Most have a key and so can come and go on days the regular salon might be closed.

The salon I work in is set up in two sections, the main salon behind a different set of doors that are locked when the employees leave. The rest of the cubicles are in an adjacent larger room. They're set up like a mall, the rooms are 10x10 and we have keys to lock our rooms.
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07-25-2011, 11:27 PM
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From another post:

"I do not have experience in the nail business but i am business savy and my wife is very artistic and loves to deal with clients. I want to open a salon because it matches both my and my wifes skills, plus independence from the rat race."

Let me start by saying I am totally unfamiliar with Canada's laws and regs for licensing, taxes, etc...so I'm going to comment based on the information provided. If you have no training, and zero familiarity with the industry in which you are starting a business you should strictly booth rent and hire a manager who is licensed. If you are opening your own business to make mass amounts of money and have more time off, then in my opinion (no matter what the industry), you are starting a business for the wrong reason. You'd be better suited as a venture capitalist.

I also saw another post on asking for a sample business plan. There are many sites on the web which provide that information. SBA here in the states has quite a few useful tools on their website. Also, your banker and accountant can be good resources as well.

When you said that a nail bar matches your and your wife's skills, which skills would those be? That might provide us with more information that could help us guide you in the right direction.
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07-26-2011, 10:55 AM
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Thank you Donna and nailgirlerika for your answers.
Thank you Donna for the answers, I think I will only have 3-4 booth renters ( i do not like the idea of having anyone else coming in the salon after its closed but we will be open late anyways) to advertise the salon a little bit and to bring in the steady cash flow to cover the fixed costs. I also want to employ a more experienced nail tech that will help me and my wife run the salon. I also want to employ 2-3 newer nail techs who can be mentored by the more experienced Nail tech. I only look to pay the employees commission on both services and retail so if I make money, they make money.
The nail bar will be no more than 1000 square feet so its small and cozy with a homey feeling.
Please let me know if you think this employee and BR structure might be a good idea.

Thank you nailgirlerika for your response. I am thinking of hiring more BR now so that they bring in that cash flow.
As for the skills. My wife is really creative, she paints, she loves to deal with customers and has great customer experience, she loves fashion and everything around it. As for myself, I work in the banking industry, so I am good with numbers and financial statements.
I was having problems finishing the sales forecast spreadsheet bc I did not know how many services on average are being done per week or month, but i HAVE FIGURED IT OUT.
I am looking to open a nail bar for the creative aspect for my wife and for the business aspect for me. It blends both of our passions and its doable even if we know little about the industry (we are fast learners). I want to create a nail bar that has low overheads and can be easily re-created (yes I want to open more nail bars all over toronto).
The main reason people get into business IS making lots of money and independence (whether they succeed or not, that is a different story).
And do not go to your banker for this type of things because unless they can sell you something, you are waisting their time, trust me I know. Most bankers that you and me have access to are financially illiterate.

Thanks for the responses, your time is appreciated
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07-26-2011, 11:22 AM
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Hi Manag00, I'm in the GTA, what area are you looking at to open your business? I admire your enthusiasm and drive Smile I am self employed and have my own studio in Ajax. If neither you nor your wife have any experience in the nail business I would strongly suggest you hire a consultant to make sure you're going down the right path. You have to know who your competition is (and more importantly, who it is NOT). There are a few good nail bars in Toronto, I'm sure you've probably checked them out already. I wish you and your wife the best of luck !

Laura Merzetti
http://www.scratchmyback.ca
CND Education Ambassador
Toronto, Ontario Canada
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07-26-2011, 11:53 AM
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Hi scratchmyback and thank you for your response. I would not mind working with a consultant however I do not want to spend an arm and a leg. Do you know the average fees for such a service?
I have looked at my competition and my "non-competition". I am leaning towards a nail bar that offers mani, pedi (axium and Shelac), waxing , facials and tinting. I am not looking to offer gels or acrylics for now. I know of few salons that do not offer those services and do fantastic.
I really like the ten spot in toronto and rouge in montreal. I will be going for that kind of "feel" for the salon.
I will not compete with the Vietnamese salons who do an aweful job, no comfort, no ambiance... you know the story.
Please let me know if you have checked out those salons and what you think. I would appreciate it.
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07-26-2011, 11:54 AM
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Ohh and to answer your question.. I am looking to open in the downtown area, maybe in th king east or queen east area, even queens quay area where there are the new developments.
What are your thoughts scratchmyback?
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07-26-2011, 01:26 PM
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Just wondering, as I don't think I saw it: is your wife a licensed nail tech? Or, if you don't require licensing in your area, does she have experience doing nails? If not, I definitely encourage her getting training--and it wouldn't hurt you to get a bit, as well. Not that you'd be doing any clients, but so you would know the lingo, so to speak. You'll need as much knowledge about the industry as possible! Smile

Elyse in WA
http://www.elysiumnailstudio.com
The Nail Princess is in.
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07-26-2011, 03:57 PM
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Hi again, I am familiar with the Ten Spot - that was along the lines of what I was hoping you were trying to achieve Smile I don't know any local consultants, I totally get that you don't want to spend a lot on that, I suggested it only because neither of you have any background in the industry. I think you are talking about Leslieville -right? That would be a great choice I think, and yes Queen's Quay - but totally different clientele in both areas. Thinking of only the rent, I would assume it would be more affordable on Queen east. I'm also glad you understand what kind of business you want it to be, and who your market is.

Elyse, we don't require licensing here....but your suggestion is valid.

Laura Merzetti
http://www.scratchmyback.ca
CND Education Ambassador
Toronto, Ontario Canada
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07-26-2011, 04:32 PM
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Thank you for replying scratchmyback.
The leslieville location is acctualy larger than I was thinking. I was going thinking about the queen west location. It small intimate and verrrrrryyyyy busy. The queen's quay location would be more expensive but it would also give me access to a more younger crowd, although the queen east is slowly starting to be like queen west (i live in king west liberty village).
Check out rouge in montreal http://www.rougenailbar.com if you have time, its really cool the way they have the layout set-up. They have expanded in 2 years to 3 locations.
Do you think the nail bars would be more profitable than you regular nail salons? Just cause it tailors to the hipper younger crowds.

PS. me and my wife do have it planned to attend courses nail tech courses.
DOES ANYONE KNOW OF SOME GOOD CLASSES THAT ARE ON THE WEEKENDS OR NIGHTS????????? PLEASE LET ME KNOW

Thank you again guys.
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07-26-2011, 04:50 PM
Post: #13
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manag00 :
I also want to employ 2-3 newer nail techs who can be mentored by the
> more experienced Nail tech. I only look to pay the employees commission on
> both services and retail so if I make money, they make money.
>



Good luck with that. You expect nail techs to work as an employee on commission only just starting out and want an experienced tech to mentor as they work for no pay.

I'm not sure I understand your line of thought here but experienced nail techs with a client base will probably not be willing to share any of their income with you. The thought of them mentoring newbies is great but until you establish your salon, having techs expecting to be there certain hours with no clientele won't last long. Booth renting might be a better way to go if you build an attractive salon and offer a decent contract to an experience tech.

Ellen Torchia
Owner Too Much Fun
President SB&S Graphics, Inc
Replicator Graphics

Former Top 10 Competitor

"A mind once stretched by the imagination never regains it's original form."
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07-26-2011, 05:59 PM
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OK, I kind of think you are working backwards. You're picking all great locations within the city, and you understand the market there, which is obviously important when you're opening a new business. But without a background in the industry, you're really going to need either a consultant, or find a nail tech who might want to partner with you and your wife (or someone you can pay to manage your business for you) because I can see you are struggling to understand some basic aspects of our industry already.

Any experienced nail tech with a following is not going to come and work for you unless you make it very attractive for them. They also will not be interested in mentoring anybody without extra compensation. You don't want a bunch of inexperienced nail techs working for you, as you struggle to find your niche. If they are only being paid commission, they won't last very long without someone to guide and mentor them. Without the background yourselves, you're going to need experience working for you, and that costs money, plain and simple. I know you're not planning on offering nail enhancements, just mani/pedi, gel polish, that kind of thing but still - you want competent people who can quickly and efficiently do a service with a minimum of supervision.

As far as nail technology courses, I know George Brown offers one, through the Yorkville School of Esthetics, very flexible hours, you can do days, evenings, weekends I think. Here is the link: http://coned.georgebrown.ca/owa_prod/cew...ode=PS0146

I didn't go there, but it's probably the most convenient for you.

Laura Merzetti
http://www.scratchmyback.ca
CND Education Ambassador
Toronto, Ontario Canada
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07-26-2011, 06:56 PM
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This has been a fun thread to watch. You're in the banking industry but you think bankers are financially illiterate? Maybe you need to switch banks.

I have many friends who are successful business owners in a variety of industries. You have to have a passion for what you do, not just a passion for making money.

Being in the banking industry and a wife with good customer service skills...why the beauty industry? With those same qualifications and passions you could just as easily go open a restaurant, or a car dealership, or a hotel. Why the beauty industry?
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07-26-2011, 08:42 PM
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Thank you for your reply nailgirlerika. I suppose you are living in the states so my following comment will be: why do you think the states is in the mess it is? most bankers are financially illiterate (most people for that matter are as well), the so called bankers you visit at your local branch are sales people not people who study finance and people who can give you advice on how to build a business plan, etc. I dont expect you to know this since you haven't worked in the banking industry. Anyways this is not a thread about banking so lets drop the debate.

I just want to say that me and my wife will be taking courses on mani/pedi so we will know the basics. What I am interested in knowing is: is it better to have, at the beginning, more booth renters and maybe one nail tech that knows how to do mani/pedi, waxing etc. and paid commission?
It seems like this is the best combination. The booth renters will bring in steady income and the nail tech will try to build clientele.

Just please let me know if that will be best.

Thank you
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07-26-2011, 08:56 PM
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Here's the thing I'm not sure you're understanding, your booth renters will probably bring in their own clientel. Now, I don't know about there but here, once you get a pretty good clientel established, you generally go out on your own UNLESS the business you work for can provide incentive to stay an employee...that means, vaca time, sick time, paid con. ed. and even possibly ins.

Your booth renters will likely be better than your employee because it's mostly newbies looking for a quaranteed paycheck who are looking for that kind of position. With your b.r.'s better than your employees, it's going to be hard for employees to build a clientel. If you want to keep them, you'll need to pay a guaranteed salary which I'm thinking you don't want to do.

I would suggest you make the place really nice to attract the upper level of nail techs, but since you don't want to do gels or acrylics.....there'll be some that won't come becausse of that. So at best you'll only get beginners, imo, not good to start with.
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07-26-2011, 09:16 PM
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Hi Donna, thanks for the coment.
I understand what ou are saying. Do booth renters take walk-ins as well? If they do then yes the nail techs will have to compete with th B.r's. Im not looking to get nail techs straight out of school, I am looking for some experience but not where they have their own clients.
Do BR's stay in the salon even though they do not have any clients for they day?
I can offer soak-off gels, the menu has not been fully set in stone yet.
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07-26-2011, 09:39 PM
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Booth renters are responsible for their own business and yes, most will leave when they're finished for the day. The salon I'm in has a rule that all walk ins belong to the main salon. Only once it's been determined that none of the employees can do the client, does the recptionist will see if any of the b.r.'s can take the client. But, most of them are booked during that time and it's rare that they can.

The whole reason for being a b.r. is that a person can better control when they work and how much. As an employee, there's a lot of down time usually and since you're talking comm. only and no salary, that means time spent wasted making no money. So once the employee builds a clientel, then chances are really good they'll leave and take the clientel they've amassed with them. Money lost for you. I think the only way to avoid this would be to make a great place to work so they don't want to work anywhere else. Legally, the walk-in clientel belongs to the business but you sure can't stop them from leaving to follow a favorite tech.
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07-26-2011, 09:45 PM
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In the states, ( my only way to create an example) booth renters are self employed, only renting space you provide. Sometimes they even bring their own table, chairs, lamps on top of providing everything they need to service clients and run their business within you salon. There was an issue we discussed about keys for renters, and as a renter I would not rent someplace where I could notnhave access to MY belongings at all times. But u can understand salons not wanting people coming in when the shop is closed. But since a renter runs their own hours, what happens if they are busy until 9 pm? But you want to close up at 7pm. They need to make income so making it impossible to be there when they can make money could be an issue.
Renters will give a steady rent check ( if all goes well anyway ) but can also leave you high and dry. Sad. Renters also own all the client information and are soley responsible for ads and building their clientele. You wouldnt be very welcome to control anything for a renter, from a renters view. I know I am not an owner, but I think I can bring some food for thought anyway.
Employees, they will rely on you to bring clients in, and you will be the one taking the financial burden of taxes and supplies, back bar and so on. Here employees provide their own tools like nail brush, nippers, clippers, while you provide products, nail files, chemicals, disinfectants. Renters supply all that on their own. As a renter I would take a walk in as long as I had an opening, but I would not sit around waiting for one all day every day. If I weren't as busy as I would like, I would hustle clients into my chair. ( I have been a tech for 18 years, I paid those dues of waiting and being available during my stated open hours, no I work by appointment only, unless a walk in comes in while I am open.) does that make sense?
There are benefits to both, my salon I rent in now has a few employees, and the rest are renters. The renters come and go within their own desired hours to work, we rent our space for the entire week, an do not share. I personally need my table available to me at all times. But some renters may share space, and work around each others time. That's up to you all.
If you want ultimate control over product, dress code, hours, prices, services and so on, then employees are for you. If your open to both, that's great too. And all renters, means your not booking their time ( unless things are different where you are ) and you don't get to set their rules of business practice. Kinda scary. Renter and employees alike want a nice, clean, appealing, great location to work in. Speaking from that employee, and now renter view. I know you want owner perspective.
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07-26-2011, 10:17 PM
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WOW, thank you Donna and sobeit. I learned sooo much from you guys. Thank you.
The location im looking to open in is downtown where there is high foot traffic (so I know B.R. will want to work in). The nail bar will have a very relaxed athmosphere and clients will want to come in. My wife is a very good decorator. The location will not be a problem and I know I can get B.R.'s to come and work there.
The work space will be a little different because I will not have pedicure chairs but sofas with portable trays and foot massager and soak (belava foot soaker and massager, if you know the product). this will allow me to use the sofas as manicure and pedicure spaces. I will have a long manicure bar where there will be 5-6 manicure spaces to work in. The nail bar will be something like http://rougenailbar.com
Let me know what you think about the idea.

thank you guys again.
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07-26-2011, 10:53 PM
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Very cool place to use as inspiration.
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07-26-2011, 11:35 PM
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.....
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07-27-2011, 06:41 AM
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manag00 :
> What I am interested in knowing is: is it better
> to have, at the beginning, more booth renters and maybe one nail tech that knows how to do mani/pedi, waxing etc. and paid commission?
> It seems like this is the best combination. The booth renters will bring in
> steady income and the nail tech will try to build clientele.
>
> Just please let me know if that will be best.
>
> Thank you

If you have mostly booth renters, they will be controlling your business, not you. You will only be collecting rent from them. Any clients the booth renters bring to the salon, will be theirs, not yours. The walk-in clients will be yours, and your employee can provide their services, and you can pay them commission.

If you need to have strict control over what services are offered, when they are offered, what products are used....then you want employees.

Laura Merzetti
http://www.scratchmyback.ca
CND Education Ambassador
Toronto, Ontario Canada
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07-27-2011, 11:22 AM
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Okay; from reading this Post, I'd say, honestly, you need a Consultant..no offense. And yes, I'm considered "wet" behind the ears here because I'm newly minted as a Nail Tech, but in my old Career, I helped launch and build/develop businesses and I've owned businesses as well (just not a Salon). There are so many hidden costs in this Industry first starting out, and to get a real "picture" of what it all entails w/o being in the Industry for awhile...vs. just looking at architecture and demographics/etc. you need someone that's "been there, done that": Trust. Smile


I wish you the very best of success, I truly do, I hope you blow the gates off all the busy places in your Neighborhood. Smile

<3
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