Is renting out one of my salon chairs right for me?
As a salon owner, the best way you can determine the right person to
work with is by conducting a rigorous interview process. Because
freelancers work on their own terms and aren’t bound by salon rules,
i.e. treatment menu and dress code, it’s vital they work well with
your employed stylists in order to avoid any tension. During the
interview, try to include your employed staff as much as you can in
any decisions so that they feel involved. Consider also having a
three-month probationary period to ensure a smooth leaving process if
things don’t work out.
What matters the most when filling in the paperwork for HMRC is the
transparency of your working relationship and the freelancer’s job
title. Elements they will observe include:
- Working hours
- Setting prices
- Providing/paying for training
- Wearing a uniform
What are chair rental laws?
Before you make your decision on renting out one of your salon chairs,
the first thing you need to agree on is a service contract (not to be
confused with a contract of employment). Not only do they protect the
rights of both the freelancers and salon owners, but they also ensure
a smooth process in case the former decides to move their business
elsewhere.
Some of the arrangements to consider when writing out your service
contract include:
- Terms of agreement
- Length of contract (open or specified)
- Client payment methods
- Rent amount
- Use of premises (the parts that they can use)
- Expense you’ll cover (for example travel)
If possible, have a legal professional review your contract before
getting it signed. This will ensure you haven’t missed any important
terms and it’s fair to both parties.
Pros and cons of renting a salon chair
PRO: Saving money
Salon chair rental is a low-cost option for both owners and
freelancers. For owners it avoids paying a wage, holiday pay, sick pay
and National Insurance. For freelancers it means saving on business
expenses and allows more time to work efficiently, and so make more
income.
PRO: Flexibility
Freelancers can massively benefit from renting salon chairs as it
allows them more flexibility to work the hours that they want,
compared to working door to door. As lots of clients enjoy getting
their hair done in a salon setting, freelancers can work during peak
times when they can make maximum earnings for both themselves and the
salon they’re renting the chair from.
PRO: Self-motivation
Sometimes employed stylists can have their personal low days, which
may impact business income. When bringing in a freelancer, who works
on their own terms, they can actually end up demonstrating the high
standards your employers should also be showing. If you and a
freelancer are on a percentage agreement, you’ll be able to see the
difference this makes when your earnings rise.
CON: No tools provided
This depends on your contract terms, but one of most important things
to remember is that a freelancer often isn’t given access to the
salon’s tools or products. In the same way as if they were working
mobile, freelancers need to bring their own hair and beauty products
for each client that’s booked in with them. On one hand it means
freelancers won’t be able to use the free in-salon products. On the
other hand, freelancers may end up using products unavailable in your
salon that could potentially prove popular with clients.
CON: Fluctuating income
This is something both salon owners and freelancers can face from
chair rental. On one hand, a freelancer’s income is directly in
proportion to the number of clients who go to them, and they may
experience business slumps compared to the security of a fixed income.
On the other, salon owners may see more clients going to the
freelancer and so potentially their own available profits will
decrease.
CON: More/less control
One of the main pros of being a freelancer is you are not restrained
by your salon owner’s menu. You have full control to perform your own
treatments using products the salon may not have available. However,
your contract may also prevent you from using certain salon spaces and
also charging for treatments, so make sure your agreement suits. For
salon owners, this freedom may cause a strained working relationship
with employed staff if they haven’t had the situation fully explained.
How much do chair rentals cost?
Rental charges for salon chairs depend on the location and the income
a freelancer can reasonably make per day/week. For example, high-end
salons in highly populated areas may charge £150 a week while a
smaller salon in a quieter neighbourhood could ask for £75 a week.
Location really will play a large part in the salon’s charges.
Whichever you choose, there are three options when arranging rental
payments for a salon chair.
1. Fixed monthly payment
This method is the simplest for both salon owners and freelancers. A
set amount ensures the salon knows what they will receive each month
while the hairdresser knows how much they will need to earn before
making any profit.
2. Percentage agreement
Instead of charging an up-front rental on a chair, the salon owner
takes a cut of the freelancer’s earnings. This normally falls in the
40%-60% region. This choice can be good for both parties if the
freelancer’s business is thriving, but it can be risky for the salon
if the freelancer has quiet patches or becomes ill. It would mean that
there is no rental income coming from the chair.
3. Mix of both
Some salons offer a mixture of both payment methods and take a small
rental fee while also taking a small percentage of the freelancer’s
earnings. While this can work well for salon owners, it may cause
confusion and upset for freelancers due to the potentials of an
unstable income.
Accountancy + VAT
When looking after accounts, freelancers need to remember that they
need to take care of their own taxes while renting out a salon chair.
This is normally a straightforward process as the business will be
structured in a way that’s easy to follow. However, it’s still
important to check you’re saving enough tax at the end of each month.
Freelancers also need to remember to take out mobile hair and beauty
insurance in order to cover personal and public liability.
Conclusion
The most important decision when pursuing salon chair rental is
whether it’s the right fit for you and your needs. It’s not a “one
size fits all” approach, and you need to consider if the pros outweigh
the cons for your business financially, legally and commercially. It’s
a low-risk direction for all parties when handled correctly, and it’s
an amazing opportunity to boost your profits.
