Salon booth rental is a system in which a salon owner can make money by renting out chairs or booths at a location. In contrast to typical salon business models, booth rental businesses don't actually employ any stylists. Here's how it all works.
Important statement: This article is for guidance purposes only and you should check local labor laws in relation to renting a booth in a salon.
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- How Does Renting a Salon Booth Work?
- Pros & Cons of Owning a Booth Rental Salon
- How Do You Attract Salon Booth Renters?
- How Much Does It Cost to Rent a Salon Booth?
- What Are Booth Renters Responsible for?
- Do Booth Renters Need Insurance?
- Can a Salon Owner Fire a Booth Renter?
How Does Renting a Salon Booth Work?
So what exactly is salon booth rental and how does it work? Well, booth rental, also known as chair rental, is a simple concept. The salon owner rents out booths or chairs to independent stylists. An independent hair stylist can therefore rent their own space in the salon to use for their own business.
The stylist can rent per hour, day, week, or month, as required. They keep all the profits from the work they do and can manage their own clients and schedule. This allows the stylist to operate as an individual, without any commitments to the salon except the rental agreement and payments.
Pros & Cons of Owning a Booth Rental Salon
Flexibility - As a professional chair renter, this model gives you a lot of flexibility. You may choose how to manage your space, who to rent to, what sorts of terms and prices you want for each space, and so on. You aren’t limited to a set staff of full time stylists and all the constraints that go along with that.
Less Responsibility - Salon rental business owners also have far less responsibility than regular owners. You don't have to worry about managing your staff, handling their schedules, worrying about marketing, managing online booking systems and website post updates, and so on. It’s up to each of your independent clients to manage their own services and attract their own customers.
Less Risk - In many ways, running a rental is less risky than running a traditional salon. For example, a regular business offering hair/beauty services must bring in clients and sell them services each day to turn a profit. If you run a rental, it doesn't matter how many clients get through the door - you'll still get paid.
Fewer Costs - You may also have fewer costs when running a rental. You won't have to worry about liability for managing things like healthcare, taxes, and retirement plans of the stylists in your salon. This is because they'll be working as independent professional contractors, rather than full-time hair stylists. You won’t have to cover commission costs either.
No Revenue Growth - One of the downsides of rental businesses to know is that there’s a cap or limit on how much revenue you can effectively make with this model. Once you’ve rented out all of the chairs or spaces in your salon, there aren’t really any extra ways for you to grow revenue, aside from raising rental costs.
No Upselling - Following on from the previous point, you also won’t be able to take advantage of any kind of upselling with this model. Upselling services and products is a great way for salons to make money and can be a key part of their business strategies.
No Loyalty - At traditional beauty salons, owners can build strong bonds with their staff members. Over time, loyalty can grow between the staff and the business. At a chair rental salon, there’s not really any loyalty between clients and owners. Each client is running their own business and simply uses your location as a building to style in.
Difficult to Build a Brand - It can be hard for these kinds of businesses to grow and develop as brands in the same way that regular beauty salons can. At rental places, there’s a lack of consistency and workers are independent, so clients will care more about the actual stylist they’re working with, rather than the overall business.
How Do You Attract Salon Booth Renters?
If you’re running a daily salon booth rental business, you must find a good way to actually draw renters in and keep them around. There are several methods available for booth rent or commission businesses to do this. Here are a few examples:
Craigslist - Craigslist and similar sites are a great way to advertise if you have a salon booth rental available. Many hair and beauty professionals use these kinds of sites when looking for renting a chair in a salon. You can make a post with the exact terms, rates, and details of your offer and wait for people to get in touch with you.
Recruitment Websites - Posting on recruitment websites is another good option to use when you want to attract renters. Again, renters who are looking and want to find a salon to work at will frequently use these sites to search for the best job opportunities in their city or local area.
Word of Mouth - As your business begins to get bigger, you don’t necessarily have to worry too much about marketing, as word of mouth will help you get more contacts. Stylists often know other stylists, so they’ll be able to use their own networks and refer people to you if they have great experiences working at your location.
Business Website - Every salon professional should know the importance of having your own business website. It’s a must for rental business professionals too. You can use your website as a marketing tool to find the best renters and for building your brand’s appeal over time. You can even set up useful tools like an online booking system for renters who need a job.
How Much Does It Cost to Rent a Salon Booth?
Many people have questions about contract prices and the average chair rental cost, and one of the biggest questions is “How much do I need to pay?” Well, the truth of the matter is that it depends. Various factors can come into play when working out the cost of a chair rental contract.
One of the big factors is location. Contract rates can vary from state to state. In one city, you may find that you have to pay twice as much than you would in a smaller town. You may also have to pay extra if the salon is in a prime spot, like right in the heart of downtown, easily accessible for local clients looking for the best hair and beauty products and services nearby.
The type of salon and facilities of the salon may also impact the days, week, or month rental rate or overall salon booth rental cost. If the salon is a new, large, well-equipped building with lots of new items and the best set of gear, the owner will usually want a higher rate from each client. You can save money by looking for a smaller, simpler building that isn’t as new or isn’t in such a good spot, but this may impact your own chances of making money with your products and services.
A useful tip is to search on Craigslist or similar sites for general costs of rentals in your area. Take a look at a few local proposals and work out the average to see how much local owners want from each client. You can then evaluate the type of rental you have to pay, compared to the income you expect to get. Finance software can be of help here too. With finance software, you can evaluate how much income you’ll require to cover the costs.
What Are Booth Renters Responsible for?
This depends on the specifics of your contract. But in general, your main commitment to the salon owner is to pay the agreed rent on time. Aside from that, you're on your own. It's up to you to handle things like contacting clients, getting bookings, marketing your services, managing your finances, getting salon software for booth renters, and so on. You also have to think about doing your own taxes, pension, etc., because the building owner won't have a legal right or need to handle any of that.
Do Booth Renters Need Insurance?
Yes, those who rent booths or chairs typically do require booth rental insurance and it’s important to get it. This is a specific type of policy that is designed to offer coverage for independent beauty professionals.
As Insurance Bee explains, “You could be a manicurist, barber, hair stylist, esthetician or cosmetologist. Whatever your specialty, you need your own insurance. Because most salon owners don’t provide it.”
Can a Salon Owner Fire a Booth Renter?
No, renters cannot be fired, because they aren't technically employees. The only way to get rid of an unwanted renter would be to evict them, according to the usual terms and procedures of eviction and depending on the details of the salon booth rental agreement. A booth rental termination will also be dependent on landlord/tenant laws in your state.
Rental businesses can seem complex and confusing at first, but hopefully, this guide has been of help to you in figuring out how they work and what pros and cons they can offer to both owners and renters.
Renting a booth can be a decent option, especially if you want to open a hair salon with little money, but you have to take all of the different factors into account and remember that you won't get a prime spot in a top-tier place for free.
So, whether you’re an owner or a renter, remember to use salon software and take your time to work out your budget, and discover if renting is really the right move for you.
When considering salon booth renting as the option for your business do not miss our post on salon apps for booth renters.
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