Advice on treatment room opportunity

[Essential Bliss]

Hiya
I currently work at a salon full time and have lately felt my wages etc don't reflect the work I put it, i have been here 5 years and ran the salon for the past two years.

I have been offered a small one room salon, the landlord being a close family friend. I'm saving for a mortgage too so he said would help me out with accounts to show an advisor when the time comes.

He's offered me rent free but him taking half of what I earn to start out with, is this a good deal? I am meeting with him Monday to find out more information such as who will supply stock etc.

The salon is based in a village but next to a hair salon which may bring in clients, I have a small client base who will follow.

What I really would like is advice on rent etc and people's own experience?

Kayleigh xxx


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[BannerPenguin]

Hmmmm tbh a few things concern me. If you are trying for a mortgage and going from employed to self employed you are going to struggle. It doesn't matter what the landlord says your business accounts will need to be high and you'll need to be earning very good money for 3 years normally before a mortgage company will consider you.

Also if it was me I would much prefer to pay rent rather than 50% and it's a fair assumption that you'll earn far less starting out on your own for first couple years compared to your current wages (presuming they are reasonable and you're full time).

 

[Beckybee]

You also need to know who pays the bills etc. will you have to pay the bills out of your 50%?

As a landlady myself, the biggest concern is when a property is empty, you still have to pay business rates, while not getting any rent for it. so getting a new tenant in ASAP is paramount.

I think the agreement is more for benefit than yours.

 

[Essential Bliss]

I met with him on Monday and have just about made sense of it haha.

He will be setting up the salon himself and paying for the bills, rates, products and equipment etc whilst paying me a wage which is yet to be discussed.
I will have shares in the business which he is happy to increase once I am willing to go self employed and then profits will be split, so he would be a business partner as such eventually.
He knows next to nothing about a beauty salon but does have an extremely successful business of his own so I have control of the set up. Obviously, I am expecting there is going to be no profits in the first year or so, so my income is my wages. He's knows I'm willing to work hard to get the salon known and established and he has said he is willing to take a risk.

Please ask if any of this doesn't make sense as I am also trying to get my head around it lol. I haven't agreed or signed anything yet so any advice or more questions about things that don't make sense or I have been forgetting will be appreciated xxx

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[Myarka]

I will have shares in the business which he is happy to increase once I am willing to go self employed and then profits will be split, so he would be a business partner as such eventually.

Take legal advice about the entity status of the business and what type of shares issued.

Close business relationships are great when everything is going well, but hell when they break up. So make sure you're protected.

 

[Essential Bliss]

Take legal advice about the entity status of the business and what type of shares issued.

Close business relationships are great when everything is going well, but hell when they break up. So make sure you're protected.

Thank you! Everything will be written up into contract which I was planning to get checked over by a solicitor anyway so I will definitely make sure this is all checked out too xx

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