As a salon owner, you make a difference in people’s lives every day. A haircut and style or a new color can put a bounce in someone’s step. Managing a salon has its challenges, though. On any given day, you may be dealing with unhappy customers or diffusing conflict between stylists.
Managing a salon is even more challenging if your stylists are booth renters. They are independent contractors, so your approach to management will be different than it would be in a commission environment. A salon owner has responsibilities to booth renters, and your renters have responsibilities as well. Having clear expectations for everyone can keep your salon running smoothly and keep your salon’s reputation intact.
TL;DR (Too Long; Didn't Read)
When you are managing salon booth renters, keep in mind that they are independent contractors, not employees, and act accordingly.
How the Booth Rental Model Works
In the booth rental model, stylists rent their booth space. The salon owner doesn’t employ the stylists. Each stylist is an independent contractor. This means that you don’t have to provide benefits for stylists, such as health insurance or a retirement plan, and the stylists are responsible for their own bookkeeping and self-employment taxes.
This also means that stylists are not employees, which means that you have little control over their hours, their clients, the styles and services they provide and their training.
Challenges in Managing Booth Renters
Managing booth renters and having booth rental salon rules is challenging because your renters are not your employees. If you attempt to manage booth renters in a way that’s more consistent with how employees would be treated, you could be in violation of state and federal labor laws. You could also have to pay back employment taxes, so it’s critical to work with renters in a way that’s appropriate for their status as independent contractors.
Each state has its own labor laws, and if you are uncertain of whether you are in compliance with those laws, contact your state’s department of labor or contact an attorney who specializes in employment law for a consultation. In general, independent contractors are colleagues more than employees. Since they are not employees, independent contractors are typically not subject to:
- Performance reviews and evaluations.
- Set work hours or a controlled schedule.
- Training by the salon.
- Compensation from the salon.
To protect all parties involved, you should have a clear booth rental salon agreement that’s signed by you and your renters.
Booth Rental Contracts
Your booth rental contract should spell out the specifics of your salon owner responsibilities as well as those of the renter. It should include:
- The amount of rent.
- How often rent should be paid and acceptable payment methods.
- Consequences for late payment.
- The length of the contract.
- What physical space the renter can use.
- What amenities your salon offers, such as a receptionist or a beverage station.
The contract should specify that you will pay for the physical upkeep of the salon and taxes on the salon and that you will maintain the appropriate insurance for the salon. You can also require that your renters display their licenses and have professional liability insurance and that they maintain any physical space that they use.
You can also require that renters work within the hours the salon is open. This doesn’t mean you can tell your renters when to work within those hours, but it’s a reasonable request that they keep their appointments within your salon’s established hours. You can find sample booth rental agreements online, and you may want to have an attorney review the contract as well.
Booth Rental Termination
Your contract should also spell out how you and your renter should proceed when the relationship needs to end. It should specify how much notice each party needs to give and how that notice should be given. You can’t fire independent contractors, of course, but you can let them know if the contract needs to end early.
Be sure to follow the language in your contract if a dispute or difficulty with your renters arises. Keep in mind that they are not employees and follow the language in your contract if your relationship needs to end.
Building Relationships With Your Renters
Even though having booth rentals lowers your overhead as a salon owner, replacing renters can be expensive. This means that it’s in your best interest to keep the renters you have, and one way to do that is through building relationships.
Building a good relationship with your booth renters can be as simple as asking about their day, their families and how their business is going. For example, if they have suggestions for the salon, take those suggestions seriously. If they’re struggling, listen and offer appropriate suggestions.
Consider doing things that show your booth renters that you care. Even a small gesture like bringing in donuts or catering lunch occasionally can go a long way to showing that even though you are not their employer, you still care about them and their success. Bringing all your renters together also gives you the opportunity to foster a sense of community rather than competition.
Providing Services to Keep Renters
Another way to keep renters happy and to help minimize potential issues is by providing services to your renters. You may want to have a receptionist to help schedule appointments and greet customers. Although stylists maintain individual schedules, there are software programs that allow you to see their schedules and add or change appointments.
You may want to offer additional amenities and services, such as a beverage service or offering massages and other cosmetology services. This can help keep your clients happy and allows your stylists and therapists to refer customers to each other. If you do offer additional services, make sure they are mentioned in your booth rental agreement and set your booth rental rates accordingly.
Coaching Your Renters
Your booth renters are the reason you have a salon. If their customers are consistently leaving unhappy, though, it can hurt your salon’s reputation. In situations where a renter is having a negative impact on your salon, you can give her feedback.
Obviously, since the renters aren’t employees, you can’t threaten to fire them. You can talk to them about their challenges, though, and offer suggestions for improvement. For example, let the stylist know that you’re getting negative feedback online and that hurts her business as well as yours. Ask about why that’s happening and listen to her concerns. Give her suggestions, such as offering free services for dissatisfied clients or offering refunds if this isn’t her usual practice.
If there is tension between renters, encourage them to approach their conflict in a professional way. You may need to mediate a conversation, ensuring that all parties can voice their concerns. Ultimately, your ability to manage renters is limited by their status as independent contractors, but by setting clear expectations and building good relationships, you can keep things running smoothly in your salon.
- IRS: Understanding Employee vs. Contractor Designation
- Entrepreneur: This Is How I Manage Freelance Workers and Why It Works
- Harvard Business Review: 7 Tips for Managing Freelancers and Independent Contractors
- Salon Iris: Hiring Independent Booth Renters At Your Salon
- Cosmetology-License.com: Everything You Need to Know about Booth Rental as a Hairstylist