Rental or % rate?

[kinkyboots33]

Would like to hear the pros and cons on renting a table/room and taking a % of the self employed persons takings please? In the process of buying a shop so would like to hear frm ppl which would be the best option for both parties encoded. I want it to work for the person envolved and not just make the most money out the person. Any advice welcome (on all aspects of opening your first shop)

 

[attitude]

I suggest you do a search. This has been covered many many times. Particularly the self-employment/employed aspect, which is very important.

 

[kinkyboots33]

Thanks attitude [emoji12] Iv read the other posts but thought there might have been some new opinions/advice out there.

 

[Baggybear]

The best advice I can give you is..... Make sure you realise that if you take in self employed therapists you are JUST the LANDLORD.

You do NOT get to decide what treatments they do, what prices they charge, what they wear, when they work or when they take time off, they take their own money and pay you your rent (percent or set rate) at the end of every week.

Having said that if you are taking a percent rather than a set rent you do need to enquire at the interview stage what they plan to charge as this tells you what you can expect to take for each treatment they do.

A set rent is probably the best way as this means you get that amount EVERY week of the year, regardless of if they have gone on holiday or not & the therapist knows what they owe you regardless of how quiet or busy they are.

If you choose a set rent, you can always offer a lower rent to start with set agreed increases at set times so the new therapist can pay a lower rent to start and a bit more after getting a chance to get settled and get new clients & full rent after a set time as they should have built up enough clients to cover the rent.

 

[surf girl]

You should sit with the renter and discuss it if you want it to be fair on both sides, I do weekly rent for my hairdresser but I do %split for my nail tech.

 

[PamieD]

Pros - I've honestly never known this to work in an owner's favour
Cons - If they don't earn, you don't earn. Uncertain income.

 

[surf girl]

Pros - I've honestly never known this to work in an owner's favour
Cons - If they don't earn, you don't earn. Uncertain income.

How is money earned from simply letting someone work in your salon not in an owners favour? It gave me a little income coming in every week in the early days I would have been lost without that, my renters cost me hardly nothing to have there and the team atmosphere is amazing even if we are all self employed. Win win if you ask me

 

[squidgernetball]

I prefer renting. No grey area. They come and go as they please and I have income 52 weeks of the year. My renters get tea, coffee, milk and cleaning included.

If you want to encourage a newby you could do a low introductory rent with clear stages for increases.

Good luck - exciting times.

Vic x

 

[PamieD]

How is money earned from simply letting someone work in your salon not in an owners favour? It gave me a little income coming in every week in the early days I would have been lost without that, my renters cost me hardly nothing to have there and the team atmosphere is amazing even if we are all self employed. Win win if you ask me

Well I guess it's what you want out of the deal, and maybe also the competition for rental space in your area. If you know that no-one would rent it at a set price then a percentage would be better but it's a really tough gig finding a room or chair where I am. Oh dear, I'm such a harsh cow about business haha!

 

[surf girl]

Well I guess it's what you want out of the deal, and maybe also the competition for rental space in your area. If you know that no-one would rent it at a set price then a percentage would be better but it's a really tough gig finding a room or chair where I am. Oh dear, I'm such a harsh cow about business haha!

I don't see that as harsh? I don't really get it tho, What I wanted out of the deal was a beautician in my shop, I can't afford to employ one as there were no customers for beauty, the nail lady was building a client base so I offered her a space on percentage split untill she hits a target amount per week (same as hairdressers rent) then weel change to that when it becomes a regular thing, there's no point me charging her £100 or something rent per week if she only makes £10, she'd just leave, building a business takes time and patience. I've been as fair as I can be to the nail lady she's building her client base slowly, if I wasn't renting to her I wouldn't be getting any income from the empty space & I couldn't advertise beauty from my salon! Wether I get £10 or £1000 dosent matter whilst she's building her business. Residual income is always beneficial I don't care who you are or how much it is lol!

Why is it tough finding a room where you are? Do salons generally not rent out? Or are they already full and there's no spaces?

 

[PamieD]

But you've basically explained why it's not great for the owner: if they can't pay then they can walk away, you're stuck with a lease and an empty space. If you're happy with that, and you know your area and market best, then that's your choice as an owner. Here if you can't pay for a room or space then there are plenty of people who are lining up behind you. I just moved out of my place and it was rented to a new tenant before I'd even disconnected the phone etc.

 

[surf girl]

But you've basically explained why it's not great for the owner: if they can't pay then they can walk away, you're stuck with a lease and an empty space. If you're happy with that, and you know your area and market best, then that's your choice as an owner. Here if you can't pay for a room or space then there are plenty of people who are lining up behind you. I just moved out of my place and it was rented to a new tenant before I'd even disconnected the phone etc.

Anyone can walk away lol it's their right to as a business owner I have to accept that. However a decent contract will ensure the rent needs to be paid for a certain amount of weeks following the date of termination to cover you untill you find someone else that's as good as flogging a dead horse sometimes mind!
I can cover my overheads comfortably without having to rent spaces out, it's residual income for me, a nice little trickle of funds constantly lining my pockets, I think that's actually good as a salon owner not bad.
I've had many many beauticians leave because they couldn't afford a set weekly rent. It's not always the best approach. My current nail tech gets the more patient and nurturing approach by doing a % split. Rather than me awaiting for a lump of cash she dosent have.
if I diddnt rent out space I'd be all on my Todd day after day, right now I have a great team everyone feels encouraged and supported & feels their being treated fairly! Sounds like you got a bum time at that salon :/

 

[Grace_Hair]

I don't see that as harsh? I don't really get it tho, What I wanted out of the deal was a beautician in my shop, I can't afford to employ one as there were no customers for beauty, the nail lady was building a client base so I offered her a space on percentage split untill she hits a target amount per week (same as hairdressers rent) then weel change to that when it becomes a regular thing, there's no point me charging her £100 or something rent per week if she only makes £10, she'd just leave, building a business takes time and patience. I've been as fair as I can be to the nail lady she's building her client base slowly, if I wasn't renting to her I wouldn't be getting any income from the empty space & I couldn't advertise beauty from my salon! Wether I get £10 or £1000 dosent matter whilst she's building her business. Residual income is always beneficial I don't care who you are or how much it is lol!

Why is it tough finding a room where you are? Do salons generally not rent out? Or are they already full and there's no spaces?

Ooh. @surf girl. That's a good idea to have a target and then become rent rather than percentage.

 

[PamieD]

Anyone can walk away lol it's their right to as a business owner I have to accept that. However a decent contract will ensure the rent needs to be paid for a certain amount of weeks following the date of termination to cover you untill you find someone else that's as good as flogging a dead horse sometimes mind!
I can cover my overheads comfortably without having to rent spaces out, it's residual income for me, a nice little trickle of funds constantly lining my pockets, I think that's actually good as a salon owner not bad.
I've had many many beauticians leave because they couldn't afford a set weekly rent. It's not always the best approach. My current nail tech gets the more patient and nurturing approach by doing a % split. Rather than me awaiting for a lump of cash she dosent have.
if I diddnt rent out space I'd be all on my Todd day after day, right now I have a great team everyone feels encouraged and supported & feels their being treated fairly! Sounds like you got a bum time at that salon :/

It was my own place, what I meant was commercial space is hard to find at a good price in my town centre. It's going to depend on what OP wants out of the situation at the end of the day. I was always more than happy to help others with advice, I gave plenty of training and mentoring to other therapists I knew on my road. But things like rents are strictly business imo. Oh well, at least OP is getting a good range of views!

 

[surf girl]

It was my own place, what I meant was commercial space is hard to find at a good price in my town centre. It's going to depend on what OP wants out of the situation at the end of the day. I was always more than happy to help others with advice, I gave plenty of training and mentoring to other therapists I knew on my road. But things like rents are strictly business imo. Oh well, at least OP is getting a good range of views!

Ah sorry I thought you'd rented a table! Yea a good mix of views for sure lol

@kinkyboots33
I just reread this is your first salon, when I opened mine I let a fellow stylist friend rent a chair at a set weekly rent (we set it low, we were both new to this shop after all, she already had a couple of clients so very rarely couldn't afford the rent) I used her income in the early days as a drawing for myself to help out with the food shopping whilst I was settling into covering my overheads with my takings, some weeks that money was all I had to my name so I was really glad I did rent out from day 1, when you run a business you need to explore every opportunity to increase income, renting an area is a no brainer for extra income I think
the hair renting has run super smoothly since day 1 (I'm a hairdresser) were really good friends now (had only worked briefly together before that) she always pays her rent on time without fail, she can open the shop up if I can't & is someone to bounce things off, the beauty side has been a more rocky road with multiple girls coming and going for a variety of different reasons. What I learned from that was that even when they tell you what you want to hear I.e yes I can afford this set rent even if I have no clients, yes I will be here every day, it dosent always work out that way, you may go through lots like I did if they don't have an established client base to bring. My new tech is on % as I said previously and she's there every day hoping to get another new client off us stylists, I believe it's down to the fact that she knows I'm not getting paid if she dosent try hard rather than begrudgingly handing cash over to me she hadn't earned.

 

[RED STAR]

I think a set rent is best.....you both know where you are...
HOWEVER, I agree with SURF GIRL, in that a new set up will take time to build, so the % arrangement will help the newbie starting off.

The problem's occur when you CONTINUE with a percentage, and your renter get's lazy! .....or they decide to spend more of their time working from home!
The salon client's get cross, because there is no continuity, and you get '0' %....!!!

 

[kinkyboots33]

Thanks Guys..
Not sure if we can talk figures on here?

Girl one, use of nails table, bed in beauty room, tea, coffee etc £80 per week and she can work as much or as little as she likes. To be paid weekly 52 weeks of the year, or should I give her 4 weeks where she doesn't need to pay?
Girl two. Nail technician £20 per day for desk rental
I'll then try and have a makeup lady in 1+ day per week 20% taking to me?
Botox lady. Once per month, 20% to me?

I'm I thinking correctly?

 

[kinkyboots33]

Could maybe offer £50 rental for the first 4 weeks?

 

[Grace_Hair]

Thanks Guys..
Not sure if we can talk figures on here?

Girl one, use of nails table, bed in beauty room, tea, coffee etc £80 per week and she can work as much or as little as she likes. To be paid weekly 52 weeks of the year, or should I give her 4 weeks where she doesn't need to pay?
Girl two. Nail technician £20 per day for desk rental
I'll then try and have a makeup lady in 1+ day per week 20% taking to me?
Botox lady. Once per month, 20% to me?

I'm I thinking correctly?

Why would you give her 4 weeks off? If you rent a house, would your landlord give you a month free?!

 

[attitude]

I agree, no weeks off.