The Pros & Cons: Salon Compensation

By: BCN Communications

Category: Professionals, Students

As a professional in the beauty & wellness industry, it’s important to understand the compensation structures that are typically used by salons. Each has its own benefits and trade-offs. As a stylist, determining which is the best choice for you is dependent on your current personal & professional standing.

 

Here’s a roundup of the three most popular compensation structures in the salon industry:

 

Booth Rental

 

Rather than hire employees, booth rental salons lease service space to independent stylists in exchange for a flat fee. As such, the salon owner is also a sort of landlord who collects rent from each of her stylists. The stylists working at these salons are not on a fixed payroll and receive 100% of the earnings from the services they offer to their respective clients.

 

The Pros:

-You are your own boss. (Yay! OR Yikes!)

 

The Cons:

-You are personally responsible for marketing/networking.

-You pay your own state & federal taxes.

-You provide your own benefits (health insurance, disability, life insurance, etc.).

-You furnish all needed tools, products, and supplies.

-You must hold a state sales tax license & collect sales tax on service/retail sales.

-You are responsible for accurate records (accounting, clientele, income, expenses, etc.).

 

Booth rental is most often a better choice for stylists who have an established clientele and/or are financially secure and possess strong management skills, self-discipline, and assertiveness.

 

Commission

 

Some salons are commission-based. In other words, your pay is a percentage of the total sales you perform within the pay period. Basically the more you do, the more you earn.

 

The Pros:

-Your pay should always be guaranteed by, at least, minimum wage.

-Your employer will pay social security and Medicare taxes.

-Your products and supplies are furnished.

-You can participate in free continuing education.

-You’re in a team environment with the opportunity to learn from others.

-As your clientele builds, there may be the possibility to negotiate a better commission percentage.

 

The Cons:

-There’s less flexibility with prices, products, and schedule.

-The salon culture may not be desirable.

-The salon staff may be treated as 1099-employees.

 

Commission salons are typically great for a stylist who is a dependable team player with a cooperative mindset. A new stylist will need to have financial support to subsidize while he or she builds a loyal client base.

 

Franchise/Chain Salon

 

If you are looking for a stable and steady flow of income, then a franchise/chain salon might be the best option for you.

 

The Pros:

-You are guaranteed an hourly rate with potential bonus opportunities &/or a sign-on bonus.

-The clientele is built-in.

-You can participate in free continuing education.

-Your products and supplies are furnished.

-You have available benefits such as health insurance, vacation, 401K, etc.

-You’re in a team environment.

-You may have more flexibility in your schedule.

-There are career path/growth opportunities available.

-You may get assistance paying off your student loans (if applicable).

 

The Cons:

-The salon culture offers less independence/freedom

-The employer determines product and pricing.

 

Franchise/chain salons are often a good fit for a candidate who is new to the industry, enjoys working in a team environment, and needs immediate, dependable cash flow.

 

If you are kick-starting your career as a stylist, devote some time to do your research. Analyze your current life circumstances to determine which structure is best for you.

 

Tags: Stylists, Students, Salon Management, salon culture, Salon, Booth Rent, Commission, Chain Salon, Career Advice, careers