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A topic has arisen that is a follow on from my earlier posting ownership management chair rental. It’s how we look at salary commission based earning or Chair rental. What is a fair rate a fair way to compensate salon owner and stylist without causing decent and work place break down and issues.
For the most part stylists after training will move around a few times trying to find a fit a work place that allows them to build up a good client base a place they can earn what they see is a good wage.
In many cases as time goes bye and experience is gained and our stylist starts to get busier bring in more money to the salon, as this happens resentment can set in with regard to ratio of pay to turnover.
How can this be prevented what are the signs of an unhappy Staff!
In many cases the staff room gossip signs of apathy lateness, work standard dropping,standard of service suffering.
Most stylist will think about and see things that exist within their work bubble a simple world of I do my clients they pay X at the end of the day i have brought in X and sold Y yet my take home pay is
only X and that’s before i pay Tax, I do all the work it’s not fair my boss should get so much after all what do they do!!
Commission can be mixture of guaranteed basic and commission targets as a productivity incentive or just commission. what is fair well of course as we get busier more established build our client base we can earn more on a regular bases but the thresholds will always be how many clients can we do how much do we charge whilst maintaining standards and service!
It is a natural progression for stylist to look to get a bigger cut of the pie choices start your own business not easier or look at chair rental.
This gets interesting chair rental was when it first came out was quite visionary a stylist pays to rent a chair a space pays X per month and runs a small business within a business. Of course the down side is having to pay that rent whether you are busy or not! having to keep books pay your own tax. stock appointments you are your own little self employed Business.
As an evolution of this a new chair rental business scenario has come to my attention.
A stylist rents a chair fro a monthly fixed fee but also pays a percentage of their take to the salon owner. Hum! for the this owner provides salon reception sales support motivation marketing skills sounds good its seem’s to be a blend between commission based and self employed.
But lets look at this with some bogus numbers.
Lets say our stylist is busy and turns over £1000.00 per week
£1000.00 x 4 = £ 4000.00 Month 50% commission stylist earns £2000.00pre tax
now lets look at chair rental
£1000.00 x4 = £ 4000.00 lets say chair rental £800.00 month stylist take £3200.00 out of this they have to pay all expenses and Tax, insurance, stock assistance, everything. but the larger take is appealing.
£1000.00 x4 = £ 4000.00 then chair rental £ 800.00 month share of commission 50% 50% splits
so our £ 4000.00 a month less £800.00 = £ 3200.00 divided x 2 = £1600.00
This would be £1600.00 for the stylist. £ 2400.00 salon owner.
Although the stylist left the salon in our first example paying commission for a better deal more control a bigger piece of the pie the down side is booking keeping paying tax keeping accounts.
From a Stylist point of view strait chair rental is the best deal but involves a lot more work and commitment from a stylist it’s time to grow up and take responsibility for your self your actions.
The example that seems to offer the worst deal from a stylist point of view is rental and turnover split!
For this to work the split has to be less on the turnover to make it as appealing as just chair rental the split would have to be Rent + 25% take fro the salon owner.
By nature Stylist will always want to move on find a place where they feel they are making a fair wage for there skill, they will always feel they are working making money for the boss or owner it’s natural
not always realistic given the costs of doing business.
In closing I think it is because of the above options many choose to become home based or mobile stylist,
I do however think that there is a fair balance that affords both salon owners and stylist away of coming together to work and create a successful business that provides for all the key is communication honesty, discussing goals oh and not being greedy yep being fair you need each other .
hope this is helpful to all those trying to work out a career or business Move.
None of the above take into account charging VAT and keeping records and paying revenue for this said Tax. you are in essence a tax collector this Money should be put to one side.