Salon owners face many tough decisions from choosing the right decor to finding the perfect products. One of the toughest and most important decisions is what to do with that empty chair.
To rent or not to rent
It’s not just new salon owners struggling with this decision. Established salon owners who have lost a trusted employee can also have sleepless nights trying to decide what to do with that empty chair.
Get the right stylist and you can enjoy watching your profits and reputation increase. Get the wrong stylist and you might lose valued customers or even other employees.
Regardless of whether a salon owner decides to rent the chair to a self-employed person or hire an employee, there will always be an element of risk involved.
Risky Business
So is hiring an employee or renting a chair more risky?
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Many salon owners have a gut feeling that if they rent out a chair, they’ll be giving away some control over their business. If you really want to lose control of your business, hire an unmotivated stylist. The
- Behaviours of an unmotivated stylist
- Arriving late for shifts
- Not keeping the station tidy
- Speaking inappropriately to customers
- Not dressing appropriately
- Too much time off sick (especially on Monday mornings)
- Taking a lazy approach to work
- Keeping customers waiting unnecessarily
- Not listening to customers’ requests
- Taking long lunch breaks
- Poor quality work
- Upsetting other employees
biggest risk to any salon owner is an unmotivated and unmanageable stylist.
There is always a risk that you might get unlucky and bring a negative person into your salon, but who is more likely to be highly motivated to succeed, an employee or a self-employed stylist?
If an employee loses customers, they will still get paid. If a self-employed stylist renting a chair doesn’t take pride in their work, they will lose customers. Without customers they won’t be able to rent the chair or remain self-employed.
Employee related costs and responsibilities
As an employer, you’re responsible for paying National Insurance, PAYE, sick pay, holiday pay and maternity cover if required. You still have to cover all of your overheads, too.
All of this extra expense means your employee’s take home might not be enough to really inspire them. This can be a major factor in your employee’s motivation and how long they will continue working at your salon.
You also have to ensure that you follow employment law. For example, when hiring, you must be aware of equal opportunities. When firing, you must ensure you have followed disciplinary procedures that are in accordance with the law. Get it wrong, and you could face a lawsuit that could close you down for good.
Two heads are better than one
If they take time off, you can stop worrying about that empty chair, because you have already collected their rent. This stylist may work differently, but as long as they keep their customers happy, it’s good for the reputation of your salon.
Having a professional colleague working beside you can be fun and help keep you passionate about driving your business forward.
Employment contract and HR documentation vs. Chair rental agreement
Whether you rent a chair or hire an employee, it can be an enormous risk to your business if you don’t plan and prepare the correct documentation.
Hiring an employee – What’s needed?
If you do decide to hire an employee, a well written employment contract is a must.
Make sure your expectations are clearly defined in writing. Have planned disciplinary procedures prepared in case you do need to fire an employee. Be compliant with equal opportunities. Keep the Inland Revenue happy. Make sure you get payroll right. Do your homework. As an employer, it’s your responsibility to follow employment law.
Renting a chair to a self-employed person – What’s needed?
To rent a chair, you simply need a chair rental agreement. We have prepared a legally binding chair rental agreement that was drawn up specifically for salon owners.
Buy it. Sign it. Collect your rent.
Emily says
Hi, i am thinking about renting a chair. I’m currently employed and I just want to know hidden costs and is it best to rent a chair? Ill be moving to a new salon 20 miles from my current one now. Help! I’ve been hairdressing for 3yrs now and I’m scared incase it’s the wrong choice?
Mick Say says
Hi Emily
Renting a chair is like being self employed, you have to report your own earnings to the HMRC and pay your own taxes, which is not particularly difficult but should be taken into account.
When renting a chair the salon the salon owner will ask you to pay “rent” for the chair, which you have to pay whether you are busy or not..
These are not hidden charges but you may not have thought of them.
Chair rental is really popular these days, and it works well for most people so it’s nothing to be afraid of. Just be aware that when renting a chair there will be more onus on you to find new clients for your own column.
Click here to see our chair rental agreements and drop me another comment if you have any more questions.
If I was a hairdresser today – I would want to rent a chair and be fully in control of my own destiny.
I hope this helps – Mick
PS – If you go for it make sure you get a copy of the Stylists Business Development guide, it will help you to build your column..
june says
I will be going to school for hairstyling in Montreal and have been asking myself this question. Direct employee or chair rental? I’ve been leaning towards chair rental for several reasons. I am a highly motivated single parent. I need flexibility and an environment which allows me to make adequate money. I like the idea of being in control of my situation and am willing to work very hard to provide the lifestyle i want for myself and my child. I’ve been looking for info that will tip the scales. I realize both have there pro’s and con’s. Do you have any useful info/links or suggestions for me that might help me decide what will better suit my needs as a new hairstylist?
Mick Say says
Chair rental puts you in control but soaks up a lot of admin time and extra responsibility – in my experience try to find an employer who is happy to take you on with flexible hours.
lebo says
im sorry but its hard for me to believe rent a chair works maybe for other contries but here in africa i dont find that as a working business concept to run for ‘i say this because no matter what you say on the contract once that stylist know that she or he has rented a chair they believe they can do whatever that suits them so my question is do you wanna run a profesional business or be a salon agent….think about it this way you have four chairs rented under one roof and evantually they start competing agains each other obviously customers will definitely notice that and eventually that can even dent your brand….! so my question is how do you control that and calculations to lastly come to a rental figure?
Mick Say says
Hi Lebo
There are a great many very professional salon businesses who operate chair and room rental agreements, ultimately I personally think that they can work but it is fair to say that some stylists will abuse the system and it is up to the salon owner to interview and select the best partners. I do agree with you though – I would prefer directly employed people.
Thank you – Mick
Leanne says
I have a rented chair at my salon, but with no formal contract set up the stylist reduces the rent paid per week when she chooses to take time off. Is she able to do this legally? I need to know before a contract can be drawn up in future.
Thanks
Mick Say says
Hi Thank you for your question.
Yes she is legally allowed to do this. Because you have no contract your chair renter has no obligation to you and can make up her own rules as she wishes.
Hope this helps – Mick
James Slayton says
I’m working with a client who wishes to start her own salon. She plans to use Direct Employee
as opposed to Chair Rental. I understand that when a direct employee stylist receives a tip, according to the Internal Revenue Service, it is income for the employer (salon owner) and that such “phantom revenue” must be taxed as income to the owner. In effect, the owner is taxed on income they never receive. Is there a commonly used method in the industry for the receiving of tips by Direct Employee stylists? For example, are all tips placed in a common account or “tip bowl” that is later divided among the stylists and owner? The Chair Rental agreement is the dominant system in my area, to the point that I cannot find any salons that use the “Direct Employee” arrangement.
Mick Say says
Hi there
Thank you for your question. Unfortunately there are differing rules and regulations dependent on which country, county or state your clients business is located.
Can you please let me know where exactly in the world your client is?
Thanks – Mick