Rent a chair or room in your business?
Is This For You?
It’s a decision that’s growing rapidly in the UK from hairdressing salons, barber shops, hotels, spas, leisure centers, gymnasiums the list is growing everyday, with so many benefits to earning money from wasted rooms or space this includes start-ups to established businesses.
There are pros and cons to both business approaches.
So where do you go from here?
How to charge for your salon chair
We often get asked for the best way to charge your rent-a-chair stylist. These are the three main routes:
Take a percentage of the chair’s takings rather than charge a fixed rent.The downside?
If the freelancer goes on holiday, is sick or goes through a quiet patch then your rental income will drop in a big way.
You also need to trust the freelancer implicitly. All invoices need to go through your salon till so you can calculate the percentage due to you. It can be all too tempting to ‘slip’ payments.
A combination of the two. This works best for the salon owner. You charge a lesser fixed sum (but you still have some certain income) plus you take a cut of the hairdresser’s takings. It can be like winning the jackpot.
It can cause resentment as the freelancer can feel you’re having your cake and eating it. ( you’re trying to build a long-lasting relationship, so make sure your both really happy from day one)
Charging a fixed weekly/monthly rent to the freelancer. This works well for both parties as you know what income you’ll receive each month and the freelancer knows exactly what expenses they must find.
It can cause friction as a salon owner to see the rent-a-chair filling with lots of clients and know you won’t get a penny more.( It’s all income though right guys)
Why choose the rent-a-chair or rent-a-room business model for your business?
There are two areas where you can score big:
Salons, Barber shops, Beauty Salons Etc. save money with freelance team members
Filling your salon with rent-a-chair hairdressers can be very appealing, especially when you’re just starting out and money is tight. If you’re based in the UK you’ll save money in these 3 main areas:
- Sickness and maternity:you have no responsibility to pay any Benefits if the freelancer is away from work due to illness or maternity/paternity. Clearly a major saving to your wages bill.
- Holiday pay:likewise you have no legal obligation to pay them for time off or holidays.
- National Insurance:Freelancers have to pay all their own taxes and national insurance so you save on Employer’s national insurance contributions. For most employees in the UK this is running at 13.8% currently so it’s a significant saving. You’ll find the detailed Employers’ NI contributions table here.
Employment law doesn’t protect rent-a-chair hairdresser’s or beauticians rent-a-room
Secondly, a freelance hairdresser is self-employed (not an employee of your business) and so is not protected by, nor has the benefit of, UK Employment law.
This means salon owners are not bound by unfair dismissal procedures, holiday pay and maternity rights for example.
As a salon owner, you’re probably thinking ‘yes’ this makes my life much more straight-forward. And less costly.
And you’re right.
There always is a ‘but’. You and your business have no legal protection either.
What does this mean in practice?
Here are just a few examples. A rent-a-chair can:
- Not bother to turn up after a heavy night.
- Decide to knock off early and go home.
- Worse: they can poach and walk off with your salon clients.
- Worse still: they can persuade your staff to come and work with them in another salon and bring their clients.
The answer to the nightmare?
Have a Service Contract between the two of you setting out the rules of the game. This way you’re both protected and know where you stand.
Rent-My-Chair Rent-A-Room Service Contracts
Thousands of hairdressers, barbers, beauticians and nail technicians manage to make rent-a-chair, rent-a-room work for them successfully. You just need to be aware of the potential problems and take legal advice before taking this route. Don’t put your business in a sticky situation.
The National Hairdressers’ Federation who offer proven contracts specifically for rent-a-chair can help
Yes, it will cost money, but not as much money, heartache and worry as sorting the mess out.
Here’s a list of things to consider:
- Length of the Service Contract. And what happens at the end?
- Could they benefit from selling you products at a discount or percentage rate.
- Ensure they will inform clients of sickness or holidays.
- How do you deal with client payments? Through your till or straight to them?
- Are you responsible for helping them get new clients?
- Will the use of your hair and beauty products be readily available
- Can they use your apprentices and receptionist?
Some of the benefits of being self-employed renting a room or chair:
- High Earnings
- Your Own Boss
- Freedom To Be Mobile As Well
- Meet New Friends and Colleagues
- Build New Client List
- Potential Products Sales To Boost Earning
- Flexible Working Days/Hours