Percentage rental

#1
Hi just looking for some advice if poss? I know the question has been asked but couldn’t get a clear answer on old posts! I’m currently employed as a nail tech but the business owner wants us all to go self employed on a 35/65 percentage split 35 to owner with her supplying all stock, just wondering what other people in this position think of the deal I would obviously still have my own tax & ni to pay! Xxx
 

TheDuchess

Well-Known Member
#2
Wow. As a split this is a good deal. 60/40 to you, is more usual. An employer usually reckons on paying between 25-33% of gross turnover to staff in wages. Taking home over 60% of the turnover after overheads is a really really good deal, but that doesn't mean that it is right for you.

I wish someone had offered me something like this. When you are an employee it's easy to think that your boss is raking it in, but the reality is that small businesses don't make much. Two entrepreneurs sharing premises can go wrong, but when it works well it works brilliantly.

If having your own business has always been a dream you should give this some serious thought. You need to think about how you'll fill your column, you can't rely on her. When you're not seeing clients you'll need to be creating content for social media posts, cleaning and tidying the salon, chatting to people who could recommend or book you and being available to take walk-ins.

I once worked with a beauty therapist who'd moved into a new area. She first set up in a hairdressers. As she didn't have any client base or personal contacts, she agreed a percentage split, in return for the hairdressers making bookings and taking payments.

After 18 months she realised that she was making £40,000 a year. Her hairdresser landlord was taking 20% which she felt was poor value for money so she moved out into her own premises. However she hadn't appreciated how much value her hairdresser landlord had added to her business. She never made the same money after she moved a few doors down the road.

5 years later she was totally broke, exhausted and in debt. The hairdresser hadn't done much better. They both went out of business.

She became my tenant, 2 days a week

A year after I took her in, she asked me if I would accept a split as she was worried about paying rent. She offered me 25%. It was December and she'd had a good few months taking over £500 a week. But she was worrying about being quiet in January. I pointed out that this hadn't worked for her before, but she insisted she'd learnt her lesson.

I built her bookings up to £1000 for her 2 working days. I thought she appreciated the money I was making for her - more money than she'd ever earnt. I assumed she didn't begrudge me my cut.

One day she announced she was moving out! She went bust 8 months later.

The point of this story is that splitting your income with someone who's not part of your business can work really well, but it can also make you feel dissatisfied with your share.

FYI in my business I dream of taking home 25% of my turnover.
 

#3
Wow. As a split this is a good deal. 60/40 to you, is more usual. An employer usually reckons on paying between 25-33% of gross turnover to staff in wages. Taking home over 60% of the turnover after overheads is a really really good deal, but that doesn't mean that it is right for you.

I wish someone had offered me something like this. When you are an employee it's easy to think that your boss is raking it in, but the reality is that small businesses don't make much. Two entrepreneurs sharing premises can go wrong, but when it works well it works brilliantly.

If having your own business has always been a dream you should give this some serious thought. You need to think about how you'll fill your column, you can't rely on her. When you're not seeing clients you'll need to be creating content for social media posts, cleaning and tidying the salon, chatting to people who could recommend or book you and being available to take walk-ins.

I once worked with a beauty therapist who'd moved into a new area. She first set up in a hairdressers. As she didn't have any client base or personal contacts, she agreed a percentage split, in return for the hairdressers making bookings and taking payments.

After 18 months she realised that she was making £40,000 a year. Her hairdresser landlord was taking 20% which she felt was poor value for money so she moved out into her own premises. However she hadn't appreciated how much value her hairdresser landlord had added to her business. She never made the same money after she moved a few doors down the road.

5 years later she was totally broke, exhausted and in debt. The hairdresser hadn't done much better. They both went out of business.

She became my tenant, 2 days a week

A year after I took her in, she asked me if I would accept a split as she was worried about paying rent. She offered me 25%. It was December and she'd had a good few months taking over £500 a week. But she was worrying about being quiet in January. I pointed out that this hadn't worked for her before, but she insisted she'd learnt her lesson.

I built her bookings up to £1000 for her 2 working days. I thought she appreciated the money I was making for her - more money than she'd ever earnt. I assumed she didn't begrudge me my cut.

One day she announced she was moving out! She went bust 8 months later.

The point of this story is that splitting your income with someone who's not part of your business can work really well, but it can also make you feel dissatisfied with your share.

FYI in my business I dream of taking home 25% of my turnover.
Hi

Thank you so much for your reply it’s defo given me good for thought! I’m actually at the moment also self employed from my home salon so I do both at the moment, I suppose my concerns are when I work from home after my products tax man etc the profit is mine but in the salon I will hand over 35% of it albeit my products will be included in this also the use of the salon booking system and app which will take away a lot of time I use booking appointments when clients txt me etc! Ahhhhh decisions lol x
 

TheDuchess

Well-Known Member
#4
Ooh lots to think about indeed. Has she explained why she wants you to go self employed? Is it to avoid registering for VAT?

You could counter offer with a fixed rent per day and supply your own products.

When i bought my salon booking system I didn't know whether this was a waste of money - but I found that my business grew to more than cover the cost. Dont forget that you'll have to register with the ICO re data protection and notify all clients that data is shared between your two businesses.

You could always try it out and if it didn't work you could leave and work elsewhere. Your clients might follow... You might find that your home business grows as well because all of a sudden you can be booked in two locations with some availability most days of the week to suit clients.
 

#5
Ooh lots to think about indeed. Has she explained why she wants you to go self employed? Is it to avoid registering for VAT?

You could counter offer with a fixed rent per day and supply your own products.

When i bought my salon booking system I didn't know whether this was a waste of money - but I found that my business grew to more than cover the cost. Dont forget that you'll have to register with the ICO re data protection and notify all clients that data is shared between your two businesses.

You could always try it out and if it didn't work you could leave and work elsewhere. Your clients might follow... You might find that your home business grows as well because all of a sudden you can be booked in two locations with some availability most days of the week to suit clients.
Yes defo lots to think about and yip it’s VAT! I think I’m going to give it a go as you say I can always go elsewhere! Thanks so much for all your advice it’s appreciated
 
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