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.
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.
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.
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.