Pay rise or self employed

[The skin therapist]

I’ve read through a lot of these threads and the advice given is really good. I’m currently in a conundrum of whether to seek a much higher pay rise or request to move into a self employed role at the same location.
I’ve worked in my current location for 8 yrs but have over 15 yrs industry experience. Very specialised in facial treatments and have a really good strong loyal client base. It’s just me and my boss who work and treat from our salon and offer the same treatments. My treatment price is lower than hers but still both booked out weeks in advance. We both work part time roles and over the past year I’ve taken on the responsibility of doing laundry run, stock checking, ordering as well as some mail outs/SM posts.
I’ve been pondering the idea of converting to self employed for a while for my gain and to help with the VAT threshold I know we are going to breach by the cut off for this tax year.
After doing some analysis of my treatment and retail takings I’m set to make my annual part time salary in the first two months of this year. Yet only get my monthly salary which works out at a little above minimum wage. I do get a commission for hitting treatment target of £150 extra and a % on retail sales. It’s getting to be a bitter pill to swallow knowing from March I’m effectively working for free. Obviously know and understand the costs of running the business and am aware of all our running costs and over heads as I file most of our invoices and payments for stock, consumables etc.
think I’m struggling with broaching the subject with my boss as we’ve got a good work ethic together and good relationship. I like the benefits of working employed for someone but can’t always turn a blind eye to the fact I’m making the business a lot of money that I’m not seeing a reward from.
Any thoughts words of wisdom gratefully received!

 

[FayeElizabeth89]

I’ve read through a lot of these threads and the advice given is really good. I’m currently in a conundrum of whether to seek a much higher pay rise or request to move into a self employed role at the same location.
I’ve worked in my current location for 8 yrs but have over 15 yrs industry experience. Very specialised in facial treatments and have a really good strong loyal client base. It’s just me and my boss who work and treat from our salon and offer the same treatments. My treatment price is lower than hers but still both booked out weeks in advance. We both work part time roles and over the past year I’ve taken on the responsibility of doing laundry run, stock checking, ordering as well as some mail outs/SM posts.
I’ve been pondering the idea of converting to self employed for a while for my gain and to help with the VAT threshold I know we are going to breach by the cut off for this tax year.
After doing some analysis of my treatment and retail takings I’m set to make my annual part time salary in the first two months of this year. Yet only get my monthly salary which works out at a little above minimum wage. I do get a commission for hitting treatment target of £150 extra and a % on retail sales. It’s getting to be a bitter pill to swallow knowing from March I’m effectively working for free. Obviously know and understand the costs of running the business and am aware of all our running costs and over heads as I file most of our invoices and payments for stock, consumables etc.
think I’m struggling with broaching the subject with my boss as we’ve got a good work ethic together and good relationship. I like the benefits of working employed for someone but can’t always turn a blind eye to the fact I’m making the business a lot of money that I’m not seeing a reward from.
Any thoughts words of wisdom gratefully received!

Are you allowed to take your clients with you, or are they customers of the salon, in which case would you be looking at starting again?

If memory severs me correctly, you wouldn’t be allowed to take away any data that belongs to the salon so you wouldn’t be able to take client data from the salon and into your possession.

Approaching your boss about it can be difficult but given that you have a good working relationship, you need to just brave it and go from there.
“Hey XX I just wanted to let you know that I’m looking at going self employed at some point this year.” You don’t have to elaborate further than that to begin with, see how they react.

 

[TheDuchess]

Hi The Skin Therapist and welcome.

Speaking as an experienced salon owner I would be in heaven if an employee came to me having looked at my business figures and undertaken similar analysis.

It may be that your Boss isn’t particularly focussed on the business side of things. I am concerned that your Boss hasn’t worked out that she isn’t paying you fairly. I always checked the percentage of monthly takings that I paid my employees. I aimed to pay 37%. If the business is going to VAT register then your “share” should drop to around 25%. It sounds like you aren’t getting this fraction.

I’d definitely have a sit down with her - maybe ask her how she is planning to handle VAT registration. She may not realise that making you self employed at that point may be regarded as evasion, A business split needs to be for business reasons unrelated to VAT registration, otherwise HMRC can still tax you on your combined turnover!

If you’re thinking about becoming self employed it won’t hurt to have a chat to an accountant - one that specialises in small business and retail clients (not every accountant understands the best way to advise you). That way you can quote a professional rather than giving your own opinion.

From what you’ve said it sounds like it would work out better for both of you if you went self employed within her business but it’s important to recognise that’s she’s invested in developing her business so she may not want to hand you her profit on a plate. It would be fairer if you made her an offer to buy out your “share” of the business and an accountant could help you think about an appropriate figure to offer..

You need to think about what it would cost you to set up on your own and how much additional work you would have developing your own business and how long it would take for you to be better off than you are now. I slogged away for less than minimum wage when I started and I worked for nothing through the pandemic whilst running up debt to pay my team. Then they left to go self employed.

It’s worked out well for all of us. I became more profitable and they are also doing well, no hard feelings.

 

[Nuriauk]

Hi, if for any reason whatsoever you decide to start your own business, hit me up i have a couple of strings i can pull to help you out.

Hey Jayson, i am really interested on follow this up, could I?

 

[WeltZumerr]

Hi, if for any reason ai background generator whatsoever you decide to start your own business, hit me up i have a couple of strings i can pull to help you out. mage miniatures

That's incredibly kind of you!