The move from Commission Stylist to Booth Renter is a major one, even a life-changing one.
In this blog we will try and explore the pro's and con's of both systems and we'll try and help you decide which is the right one for your.
How does it work when you're a Commission Stylist?
When you're a commission stylist you are essentially a salon employee.
You can expect to be paid either a wage, along with a commission, or a straight commission.
You can expect most salons to offer you a commission of about 50 percent of the total revenue you generate for the business.
You also usually get to keep all the tips that your client pays you.
But commissions can be lower than if you're just starting off.
And they can go higher if you are a star stylist with a really well-established clientele.
You could also be entitled to a minimum wage depending on the state you work in.
And you would need to adhere to the requirements of the salon (dress code, schedule, practices)
So how does it work in practice?
Let's take a concrete example.
Let's say you do a color for $200 and that your client pays you a 20% tip off of that.
So you make $100 (50% commission) plus $40 tip: $140.
The salon makes $100 (the other 50%). But then it has to pay credit card charges from the color job you just did.
That's usually around 2% of the total spend. So around $4.80, in other words.
The salon is also providing you all the product you used: color, developer, bleach, toner, shampoo at the back wash.
This could easily cost the salon around $25 if this was a double process - bleach followed by toning.
The salon also paid for the hot water, electricity, clean towels used. So, say around $15.
So in all the salon will make $100 minus $4.80 minus $25 minus $15.
So, around $55.20. They probably had a receptionist and they took care of the overall place, for that price.
So all in all, this is a win-win deal for both the stylist and the salon.
And How does it work when you're a Booth Renter?
As a booth renter, you are essentially your own boss.
It is your own business that you are running.
Renting a chair in a salon involves paying either daily, weekly or monthly for the use of a chair in a salon.
Just to be clear, the owner of this salon is not your boss.
You are his or her customer as you are renting a chair from him or her.
In addition to the use of the chair, you generally get use of the hood dryers, shampoo bowls, towels, and the use of the common reception area, if there is one.
But you need to take care of all your supplies.
This would include all products that you use, from color and developer through to shampoos at the back bar and sprays.
What are the Pro's & Cons of being a Commission Stylist?
Pros:
No need to invest in any inventory. Everything that you need gets provided to you.
You essentially get clients referred to you, for free.
This is particularly useful when you are starting out.
And when the salon is a major, high-class salon where a lot of high quality work gets done.
Getting customers referred to you is less valuable when you are at a low-price salon in a low-traffic area.
Another benefit: you get access to any training days provided to you by the salon.
And you can learn from other stylists.
Lastly, you don't get so lonely or bored. There's generally another stylist to hang out with for lunch and coffee breaks.
Cons:
Roughly 50% of your hard-earned income is taken away from you by the salon.
You need to fit in with the style and requirements of the salon earner, even if you do not care to.
You basically have to obey all the rules of the salon.
If you don't get on with any of your fellow stylists, that can be a major issue.
If the salon is a den of negativity, it can be a horrible experience.
A stylist we knew confided to us that at the salon she worked in, the salon owner was "seeing" one of the stylists.
The owner's own wife was the receptionist and she didn't know!
Some of the stylists in the salon knew and some did not.
Obviously, it was a totally bitchy place. Our stylist got out as soon as she could!
What are the Pro's & Cons of Being a Booth Renter?
Pros:
You are your own boss & you keep all the money you make (once you've paid for the rental of your chair)
You can keep the hours and the schedules that you wish.
If, for example, you don't want to work on Tuesday afternoons, that's totally up to you.
If you are a good stylist, with a good base of customers (we'll get into that later), you make far more money.
If you do celebrity clients, you can rent a chair somewhere fairly quiet and secluded.
The same applies if you do make up and weddings.
Cons:
You would need to replenish your inventory of products in time to not run out.
This last point is an important one.
Consumables (color, developer, shampoos & sprays) can easily account for several hundred dollars a month.
It's important not to short-change your customer with poor quality supplies.
Don't forget, that as a booth renter, people are coming because they believe in you and your brand.
It's also important to be professional and buy stock well in advance, not just a few days before you customer shows up.
At Ugly Duckling, we sometimes get stylists who message us to hurry up with the delivery because the client is "due in 2 days time"!
So don't be like that! You need to keep an inventory of all the stock that you need and plan well in advance.
You also need to manage your schedules yourself, pick up calls and messages even when you are doing somebody's hair.
You need to take care of your personal liability insurance & take care of credit card processing fees.
It can be a little more lonely if the place you are renting is a small place.
But on the other hand, nothing stops you renting a chair in a large, vibrant salon. And in general, it is worth while doing so.
Even if you end up paying a few more dollars in rent. You would be benefitting from some client referrals whether the salon owner likes it or not!
So am I ready to transition from Commission Stylist to Booth Renting?
As you can see from the above, if you are a brand new stylist straight out of cosmetology school, you are best advised to be a commission stylist at least for a year or two.
But what if you have some experience and you want to make more money. How do you decide if booth rental is for you?
First Step: Do a Complete Skills Analysis of Yourself
How precise are your cutting skills? Is your cutting known to be awesome?
Can you do radical women's hair style transformations?
Can you also do men's hair cuts? Often they are the most challenging.
If men come back to you for their cuts (repeatedly) that's a very good sign!
Next, how is your coloring? This is really key because these days that's where you make the money. Not cuts!
Do you have a really solid understanding about the way color works?
Are you regularly doing great color correction and color transformation jobs with price tags of $175 and up?
Are you confident bleaching dark hair all the way to level 10 blonde?
What about the less common stuff? The stuff that's not totally necessary but good to have.
Do you have skills in perming, soft perming and chemical straightening (Keratin treatment, Brazilian blowout etc)?
Remember, there are all sorts of hair types to be considered here and each reacts differently: Asian, Hispanic, African-American, North European.
Can you do great hair extensions? That's really in these days. And a lot of women like to do hair extensions at the same time as they do their color.
If you can't do extensions you would not be really credible as a colorist for this customer.
Do you do make-up and up-styles for weddings, proms and shoots?
You don't need to answer "yes" to all these questions. You can of course attend courses and learn.
The more skills you have, and the broader set of skills, the more likely you are to survive and thrive as an entrepreneur.
Second Step: How many clients do you have in your client book?
By client book, we mean people whose contact number you have in your mobile phone.
These would be women (at this stage, only the women interest us!) whose hair you have done.
The women who have been in to see you in the last 6 months, who trust you and whose mobile phone number you have. The women who make repeated bookings with you.
Ideally, these women should be color clients. Women who pay for major color transformations, not just root touch-ups.
In almost all cases these would involve some form of major color transformation job. A cut alone doesn't count.
Check your phone and count how many clients you have.
If the number is fewer than 100, you definitely need to stay as a commission stylist and acquire more clients.
If you are not acquiring at least 20 new clients a month (one a day) where you are currently working, chances are that the salon where you are working is not good for you and you are wasting your time there. You would need to go someplace else where the traffic and the clientele is better.
Try and get your client number above 200.
With a 200 client base, assuming these clients visit you once every other month, you are getting a guaranteed traffic of 100 per month. Or 3 per day.
Assuming these are color customers, and that at least one of these 3 is a major color transformation or color correction (which will take you the whole morning), you will basically be full, or nearly full, from the time you start.
Third Step: Calculate your current Income
The more money you are earning right now, the more it makes a difference whether you are a booth renter versus commission stylist.
As you can see from the below, if you earn $5000 or more in a month, you will make of course more money as a booth renter.
But the difference is not really significant. Not enough to justify investments in inventory and the headache and responsibility of running your own business.
But, if you are earning more income now (say around $10,000 per month), it means your client base is already solid. In which case, it makes a lot more difference to you if you strike out on your own as a booth renter:
What's the most I can earn as a booth renter?
Honestly, it's up to you. The trick is to do quality rather than quantity.
Plus remember, you need to do a lot of hair color, including major color correction and color transformation jobs.
Which is why Ugly Duckling Color was invented, of course!
Do that, and you could be making more than $10,000 per month, or $120,000 a year.
And that would put you in the top 10% of all stylists in the US!
Incidentally, for a more detailed and complete analysis of "Booth Renter Versus Commission Stylist", we do recommend you take our online paid webinar "Double Your Color Income in 90 Days" .
It includes the slides above, more explanations and analysis plus a lot more.
Good luck!
