Salon owners often rent out empty space to independent contractors. The empty space is rented as a salon booth where salon professionals operate their own business within the greater salon environment. While salon owners benefit from monthly rent and an easier way to diversify their services, booth renters benefit from the ability to work in a salon without the financial investment of owning the facility. The relationship between salon owner and booth renter result in a form of "landlord-renter" relationship.
Obtain licensing required in the state the salon is located in for renting out booths. Salon owners need to be licensed for renting out booths or retail space.
Maintain salon facilities and a business image that attract salon booth renters. Salon owners are responsible for the success of the business as a whole. The facilities need to be cleaned and decorated in a style that represents your business image. Advertise to attract new clients, including booth renters.
Collect money for the rent only. Have booth renters collect payment from clients on their own. Maintain insurance that adequately covers the costs associated with a lawsuit or injury the salon owner may be financially responsible for. Make sure renters maintain their own insurance policies to protect the salon in the event they are at fault.
Charge booth renters an amount that supports the profitability of the salon while still attracting booth renters. Realistically assess how much booths should cost so that the salon can cover expenses, maintain its image and meet your business goals. Charging too little can leave you feeling taken advantage of, and charging too much can leave booths empty or the booth renter feeling taken advantage of.
Maintain an appointment book and records of activity in the salon. This is important in the event the salon is audited by the IRS and any questions surface regarding the status of booth renters. It is also helps you identify salon needs and trends, and gives you a jump on budgeting and forecasting.
Clearly define boundaries, responsibilities, expectations and operations within the salon. Detail everything a booth renter is expected to do in the salon, and what you will provide with the booth. Generally booth renters share common areas. Tell renters your expectations for cleaning common areas or storing and cleaning supplies. Let renters know they're expected to uphold the image of the salon as a whole even though they are technically operating a business within a business.
Draft a contract for the rental of the salon booth. This contract needs to be aligned with state and federal statutes so that it clearly defines a difference between a salon owner's employee and a booth renter. This is particularly important when it comes to the IRS. Consider having an attorney review the contract to make sure there are no complications when filing taxes. The contract should also include the salon owners and booth renters responsibilities and agreement.
Communicate regularly with booth renters or provide accessible communication channels. It is important that salon owners are perceived as professional and fair. Booth renters should not feel alienated, but boundaries should also remain in effect protecting the professional relationship.
Create a seamless salon atmosphere. It should not be obvious to clients that booths are rented by individuals. The salon should still operate under the impression it is a team.
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