How to Figure Rent for a Salon Booth

by Shelley Frost; Updated September 26, 2017
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The booth rental method simplifies the financial aspect of owning a salon. You provide the space and charge each stylist a set amount for rent each month. To succeed, you must set the booth rental prices low enough to attract stylists but high enough to make a profit for yourself. Local rates, your expenses, the number of booths and the style of the salon all play a role in setting your booth rental prices.

Step 1

Calculate all of the costs associated with running the salon for the month. Include electricity, water, building costs, insurance, advertising and paying receptionists or other staff members.

Step 2

Add in an amount to create a profit for yourself as the salon owner. According to Entrepreneur, a net profit of 11 to 15 percent is the average for salon owners. Determine your desired profit percentage. Multiply that percentage by the costs to run your salon to estimate the profit amount. Add that number to the total expenses to get the total amount you need to receive each month from booth rentals.

Step 3

Divide your total expenses and profit by the number of booths or chairs you have available for other stylists. This tells you how much you need to charge for each booth to cover your monthly expenses to run the salon and make a profit. If you have a chair yourself, leave it out when calculating the booth rental so that anything you make is purely profit.

Step 4

Compare the figure you calculate with booth rental prices for other salons in the area. Keep your costs competitive while still allowing for a profit.

Step 5

Evaluate your booth rental fees at least once a year to determine if you are still charging enough to cover your expenses and profit. Track turnover and listen to feedback from your stylists to determine if your rates are too high.

Tips

  • If you are starting your salon from scratch, you'll also have the expense of furnishing the booths, and will need to recoup that cost over time from the booth rentals. Keep that in mind when calculating the basic rent charges.

    Charge all stylists the same amount of rent even if they only want to work part time. Avoid cutting costs for certain stylists, as that will cut into your profits and set a precedent for other renters to ask for lower rates.

    You can likely charge more if your salon is located in an upscale neighborhood and is outfitted with upscale decor. A salon with larger booths may also have the option of charging higher rent because of the extra space.

About the Author

Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience come from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.

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