Salon Management: Rent a Hairdressing Chair Advice
It is estimated that there are around 100,000 self-employed hairdressers within the UK. Of this number, a good number ply their trade by renting a single chair from an already established salon. This arrangement has dual benefits. Whilst the stylist gains a premise to trade out of, it also affords the salon a passive wage and an option to extend the range of services their salon can offer. There is no reason why chair rental can’t work brilliantly for both parties, it does for hairdressers up and down the country. However, this article aims to explain the pros and cons of this renting out a chair and offer advice on things to consider before entering an arrangement.
How does renting a chair work?
There are three main options when it comes to sorting out an agreement between a salon owner and a freelance stylist. Which you choose depends purely on your preference and which system works best for your circumstances.
- A Percentage Agreement
In this system, rather than charging rent, the salon takes a cut out of the hairdresser’s takings, usually in the region of 40-60%. Whilst this method can lead to big takings if the stylist is flying, there is also a risk of poor income if they go through a quiet patch or become sick.
- A Fixed Rent
This method is the simplest for both parties as the hairdresser knows how much they need to find each week before making profit. Equally, the salon knows what income they will receive each month. Whilst this arrangement guarantees a set amount, it can be a tad irritating for the salon however if the hairdresser is bringing in a lot of money but the salon receives no extra cash.
- Mix and Match
Some salons operate a mixture of both the above systems in which the salon takes a smaller rental fee as well as a percentage of the take. This works well for the salon but can cause resentment on behalf of the stylist.
Chair Rental: The Advantages
1) Save Money
Having self-employed staff can be attractive as instead of having to pay them a wage, you’re actually receiving money for them working at your salon. Also, you save on standard employee costs such as sick pay, holiday pay, maternity and National Insurance.
2) Employment Law
As the hairdresser renting the chair will be self-employed, the salon owner is not bounds by things such as legal dismissal procedure, maternity rights, holiday pay etc. If the situation doesn’t work out, you can make a straight forward decision about the arrangement.
As in any trade, sometimes a fully employed staff member can go through a bad patch and perhaps not pull their weight. This happens from time to time. As a self-employed stylist is working for themselves, logic would state the standard of their work will be high as the end results go directly into their pockets. If you are on a percentage arrangement, this can result in more money for the salon but even if not, the professionalism will still reflect well on your business.
Chair Rental: The Drawbacks
Although there are clear positives to chair rental, it isn’t all plain sailing and there are potential pitfalls to consider.
1) Loss of Control
As a freelances does not work directly for you, you have limited control over some issues that could affect your salon, what hours they choose to work for example. As the stylist works for themselves, they won’t expect you to manage them. This can creates issues surrounding team building and morale. Also, if their service or attitude does not correlate with the culture and standards of your reputation, it is harder for you to correct this as you could with your own staff.
It is important to remember that your freelancer, at the end of the day, is running THEIR own business. Whilst many salon owners and stylists make a chair rental agreement work, it has been known to go wrong too. It can sometimes get a bit dog eat dog, especially if the freelancer feels tired of handing you some of their profits and wants to start going it alone.
3) Customer Poaching
Building on from the last point, if your freelance ever leaves, there is little you can do to prevent them from taking some of your clientele with them, or worse still, your staff.
As you can see, with renting a chair, there are both pros and cons to be considered. To help ensure your business enjoys the benefits of chair rental without all of the risks, here are some steps you really must follow.
For a small amount of expense and effort at the start of the agreement, you can avoid huge headaches and costs later down the line should things not go to plan.
1) Sort Out A Contract
To ensure things run smoothly, it is essential you do the bulk of your thinking prior to the arrangements rather than attempting to put out fires after the chair has already been rented out. It is important you try to envisage the potential pitfalls and agree upon agreed actions such events occur. To help you out and protect your business we have made a list to kick you off.
Things to consider…
Length of contract – 1 year, 2 years, 3 years? How long do you envisage the relationship lasting?
Working hours – Will the stylists work their own hours or match your salons existing structure?
Disciplinary action – imagine the worst and you caught the stylist stealing, what action would then take place?
Sickness, maternity and holiday – People get sick, pregnant and go on holiday, it is inevitable however, these issues won’t present a problem if actions are agreed and all ambiguity is removed from the situation from the get go.
Product and equipment – Whether or not the freelancer has access to your salon’s equipment, products and even the apprentice’s time should be clearly defined from the start.
Product Sales – Will the stylist be paid a percentage of product sales, will they be allowed to sell their own products?
Client ownership – This is a big area of potential conflict if not addressed early on. Does the stylist have access to your database or is their client list entirely their own. Ideally, you want to keep both customer booking systems completely separate but this NEEDS to be agreed upon early doors.
2) Accountancy and VAT
Make sure you speak to your accountant and have a decisive plan on how the VAT returns and takings sheet should be completed. HMRC have strict guidelines on VAT collection for chair rental and is is important you comply so you don’t get stung down the line.
Hopefully this article has given you some advice on how best to ensure renting a hairdressing chair works out to be a great move for your business. If you have any questions or run a chair rental salon/ rent a chair, we would love to hear from you on the comment section below or on Facebook.
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