It seems like no one wants to work in a commission salon anymore, but is working as an independent stylist the freedom and payout stylists think it will be?
As a salon owner, and educator I've seen the trend swing quickly from commission salon models to booth rent and in this episode we’re exploring the pros, cons and things you might not have thought about if you're trying to decide what's best for your career and growth as a stylist.
Can I ask you a favor? If you enjoy the show, will you follow us and leave a 5 star review? This helps our show move up in the charts to help more stylists. Thank you!
It seems like no one wants to work in a commission salon anymore, but is working as an independent stylist the freedom and payout stylists think it will be?
As a salon owner, and educator I've seen the trend swing quickly from commission salon models to booth rent and in this episode we’re exploring the pros, cons and things you might not have thought about if you're trying to decide what's best for your career and growth as a stylist.
Can I ask you a favor? If you enjoy the show, will you follow us and leave a 5 star review? This helps our show move up in the charts to help more stylists. Thank you!
Welcome to the Aspiring Stylists Podcast with Tracey Franklin. Where to begin, grow and aspire to become the best stylist you can be. Whether you're thinking about becoming a stylist opening a salon, or developing your skills as an experienced stylist the next step of your beauty career starts here. Each week we'll discuss strategic ways to design, plan and execute on becoming a stylist that excels behind the chair and above the bottom line. Here's your host, Tracey Franklin.
Tracey Franklin:
Today I want to talk about how the changing stylists preferences and the industry trends are shifting more towards booth rental, we can no longer deny it. Salon suites and independent stylists models are in high demand. I've personally noticed this shift myself, the desire for style independence, it's always been there, but it's definitely grown and it continues to grow now at a rapid rate. I hate to be the person that brings up COVID. But I've noticed the biggest shift in this post COVID generation of stylists COVID forced us to figure things out for ourselves. So many of us stylists were out of the salon for 246 months, we had to figure things out without the guidance of leadership and salon owners. And we did it as a stylist. We did it and it's made everyone more independent. I want to talk about the main differences between commission based and booth rent salons. Now, if you've never been a salon owner, you don't understand the numbers. I mean, why would you as a commission paid employee, the owner of the salon is paying you anywhere from 40 to 50% of the services you perform. And for that exchange, everything will be taken care of for you. They're going to put clients in your chair, they're going to make sure you have the products you need, they're going to have someone taking care of the business end of all the transactions. And if that salon owner is good at what they do, they're also going to offer you continued education opportunities and help you track your numbers and set your goals, they're going to be a huge cheerleader for you and support system. If you're an independent stylist, you either rent a suite of your own or you rent a chair in a salon, you're gonna collect 100% of your earnings. And you're also responsible for 100% of your success. I think social media changes everything. And you see what you want to see when you're looking. I think social media has definitely brought more light to both models, not just focusing on commission based salons or independent models, you're really seeing a lot of both now, there are very few stylists out there that aren't marketing their self on social media. And that's good, we need to be doing that. With the rise of independent stylist and the rise of Instagram, where it was mostly big salons in the past and the feed you were seeing now there are so many more independent stylist and they're showing up as well. I completely understand the allure of being your own boss. I mean, out of my 23 year career in the industry. So far, I've been the boss for 21 and a half of that I get it. But being the boss is hard. Whether you're a team of one or a team of 12, you have to be so dedicated to the success of this team. If you're highly motivated, super fierce, you're a go getter, you're a good business person, then you're probably going to be alright. If you're confused, and you don't know how the system works, or you're just out there hoping it all works out. I wish you luck. So what are stylists even looking for? What are they looking for in their work environment today that they weren't looking for in the past? It's simple freedom. They want the freedom to work when they want to work. They want the freedom to wear what they want to wear. They also want the freedom to align their self with the brands that they believe in. I feel like in the past stylists were kind of willing to exchange this freedom to be part of something bigger to have a safety net a strong start. You know, that's what commission salons offer. But now more and more stylists are taking this leap into independence right out of the gate. One day, they're a student in beauty school and the next day, they're a small business owner, this can all feel very overwhelming. In the beginning, it's unlikely that you have a clientele. You have some friends and some family members and there may be a few clients that you recruited at school but you do not have a full book, okay? You just don't. And whatever you have. If you think it's enough, I promise you you're going to need more. Well, maybe you've been at this a while When you've been considering going independent, I encourage you to take a good look at your clientele. Find out how did they end up in your chair? Did the salon recruit them? Or did you? That's important to know, if the salon has put most of the clients in your chair, the chances that they stay at that salon are good. Do they absolutely love the salon space or the brand of products that the salon carries? I can speak to this we've had many stylists leave through the years as they do. People that are dedicated to the way we do things and the Aveda brand typically stay with the salon. I think stylists are surprised by that, I asked you to consider all of these questions, because they're big indicators of whether or not a client will follow you or stay at the salon, you're going to need to know approximately how many of these clients would follow you if you decided to leave. If you've spent very little time recruiting your own clients, you're going to need to consider ramping this up big time. It won't be hard, it won't be hard to go through your book and analyze and see how many of these clients you recruited for yourself and how many the salon put in your chair. There are a lot of considerations that are going to influence a stylist decision to maybe move away from a commission based salon. If you're a money motivated stylist, then you're probably looking at that split and you're thinking I can do better than that. Maybe you can. But I do think the numbers will surprise you. If you're running your chair, like a small business, doing all the things, tracking your numbers tracking your expenses, then you're probably going to find very slim margins, you could potentially earn seven to 12% more as an independent stylist working the same exact book. Does that number surprise you? It did me? Now you're going to need to ask yourself, if seven to 12% more is worth all the extra work that you're going to have to put in to earn it. So if you're thinking about going independent, you're probably wondering, what are these initial costs, what's this going to cost me? Well, it's going to vary, and it's going to vary depending on the space, you're going to rent. If you're going into a suite where your salon chair, your station and your shampoo bowl are included, you're gonna save a lot of money. Now, these items are expensive. And if you're just going to be renting a room, you're going to be responsible for this equipment, plus any plumbing and electrical expenses. But perhaps maybe you're going into a fully functioning salon and you're just renting a chair there, then all the above will be included in this model as well. Either way, you will still be responsible for obtaining your business license and an insurance policy that supports your new small business. You will also be responsible for stocking your color bar, your back bar products and any retail items you hope to sell. This will be a surprisingly large expense, you're going to need to consider any specialty equipment that the salon you currently work in offers. So if you intend on offering any of these specialty services, you're going to have to buy this equipment for yourself. And this can range anywhere from processing lamps to hair extension equipment. If you're working in a commission based salon, you probably have no idea what it costs for you to perform your services there. So this is going to be a really hard comparison. But with ongoing expenses. If your book stays about the same at the Commission salon that it does independently, then your ongoing expenses are going to be very similar. An independent stylist is going to have to effectively manage their finances in order to guarantee any kind of profitability. Now this will probably be easier for somebody that takes the time to manage their home finances. If you're on top of your game with your own personal budget, you know exactly what your expenses are every month and how much you're going to have leftover then this may not seem like you know a big deal to you. If that's a no. If you're living paycheck to paycheck and you have absolutely no idea what your monthly budget should look like then you've got a lot to learn before considering an independent model. So again, taxes let's talk taxes. How does commission versus independence really play out? Well, when you work at a commission based salon your taxes are taken care of for you during payroll. The owner of the salon is withholding these taxes from your check contributing half of your Social Security and making sure those get turned in properly. As an independent stylists. You're going to be responsible for all of your taxes and making sure they're paid on time. My recommendation is to find a good accountant with a small business experience. What are some of the benefits and downfalls of these two models? Well, the potential financial benefits of independence are that seven to 12% we talked about earlier. And please remember that is under the best circumstances and you're going to have to put in the work. operating independently can also have its downfalls. If you don't create a sustainable budget and track your expenses, you're also again going to need to double down on that self promotion. Without the salon phone ringing and placing clients in your chair. Every client you recruit, every client you're going to need is on you. So without a big salon with a solid reputation marketing on your behalf, what is this going to look like for you? Well, if you're an established stylists with a full book of loyal clients willing to follow you anywhere, then recruiting a whole new band of clients isn't going to be a huge concern for you. But if you're a brand new stylist with a wide open book, I encourage you to rethink independence. At this time, you're going to need a salon with a marketing strategy and a solid reputation to help you establish yourself. Depending on the services that you offer, you're going to need four to six clients a day, and you're going to be needing them sooner than later so that you can provide for yourself. Building up a clientele this size isn't something I recommend you take on alone, there's going to be challenges of managing all the aspects of your role. Whether you're a small business owner, you're renting a booth, you're working in a commission salon, being a commissioned stylist for the most part, well, you're able to come in and work your magic and then go home, your salon owner is taking care of everything from product orders to the appointment confirmations and all that marketing I mentioned before. As an independent stylist, you will be responsible for all of it, running to the supply house, making sure the bills get paid, creating content, making sure your clients are confirmed, booking all the appointments, the list goes on and on. You're gonna have to be really good at managing your time in order to make all of this work so that it doesn't feel like a huge burden. So I want to talk about that team feel in an independent setting. I feel like this is actually pretty easy to create if you're a good person. I know a lot of stylists that rent salon suites and have built friendships and support systems with their neighbors. And this can be even easier in a salon setting with booth rent, you still get to be part of a team while maintaining that more independent structure. So if we're talking continued education, we all know this is going to play a huge role in your success. No matter what business model you use. In a commission salon, the owner will likely facilitate the majority of your continued education at their expense. I've also been willing in the past to contribute to advanced certifications that I feel like are going to be a good fit for my salon. As an independent stylist you are still going to need continued education maybe even more than a commission based stylist because you're going to need to stand out, you will have to create reasons for people to want to sit in your chair. Again, you're not going to have the benefit of the salon placing clients in your seat. I feel like the points of difference between a commission salon and an independent salon used to be a lot greater. There used to be amenities commission salons offered that weren't often seen in independent salons. Things like specialty equipment, coffee bars, massage chairs, these are just a few of those amenities that big salons offer that you're seeing more of now. I think the biggest components of a great client experience can be offered anywhere. Your clients deserve a clean and beautiful space to receive their services, quality services and product availability and an amazing connection with a stylist who is passionate about what they do. This is a secret sauce guys, and it can literally be created anywhere. I've often wondered, you know, do client expectations change when you go to a booth rent model? I really don't have a lot of experience with this. I feel like building a loyal clientele is totally possible as an independent stylist. I mean, it absolutely is. You just have to be willing to put in the work. I've said it I know I'm getting redundant at this point. But you have to be willing to put in the work. You have to keep in mind all the things that the salon owners do to build rapport in the community. So maybe you need to volunteer for a cause that means something to you or join a networking group for Small Business Owners. You certainly need to be maintaining a strong presence on social media. People need to know who you are, where you are and what you're About and you're not going to have that big salon reputation to fall under anymore. Luxury services, I think are something that can be experienced anywhere. On a much smaller scale, of course and an independent model. Luxury is an eye of the beholder. You know, I want to talk about a time when I went to a day spa and Knoxville, I was completely blown away by this place, they had these blue marble walls, and it just looks so high end. And so luxury, I couldn't wait to spend the day there, you know that that was my perception of it, someone else may come in and think it's very average. Again, it's it really is up to the person, I will say a lot of luxury product lines are exclusive to big salons only. So getting a well known luxury product lines probably going to be kind of difficult for an independent stylist. But the products that you use are only one component of the luxury experience. So you can definitely make this up to them in other ways. So we know that the beauty business is a highly competitive market. And there's going to be challenges with client retention. And it's difficult under the best circumstances. I mean, people are really moody, you know, I have clients that have remained loyal to me throughout my entire career. I've had clients that have left me for long periods of time and come back and of course, some that came once and never came back. And at the end of the day, you're going to have clients who are extremely loyal and won't stray. And you're also going to have clients that are all over the place and don't mind bouncing around from stylists to stylist. If you're considering moving away from a commission based salon, you need to do your research, and you need to do the math and you need to be honest with yourself. Do I have what it takes to be successful independently? I think the answer is yes. If you're willing to do the work and the numbers had up I think the answer is yes. But it's not a decision that needs to be made in haste. Don't make this decision based on one bad day or one thing your boss said that you didn't want to hear. So what is the future for commission based salon? Is there a future in this industry for this model? Maybe it's because I'm so deeply ingrained in the commission model because I've never experienced anything else. Or maybe it's because I know how beneficial this business model can be to people who need guidance, leadership and accountability. I still have hope. But I can't ignore the evidence. Our industry is shifting as it so often does. The best thing that we can do is keep our hearts and our minds open to the limitless possibilities our industry provides.
Morgan Franklin:
Thank you for joining us on this episode of anytime soon. The Aspiring Stylist Podcast with Tracey Franklin. If you enjoyed listening and you want to hear more, make sure you subscribe on Apple Podcast, Spotify or wherever you find your podcasts. The Aspiring Stylist Podcast with Tracey Franklin is a Morgan Franklin Production. Today's episode was written and produced by Morgan Franklin editing and post-production by Mike Franklin. Want to find out more about Tracey and the Aspiring Barber and Beauty Academy go to aspirebarberandbeauty.com