I'll be honest; I wasn't coaching much to commission-based on ownership or working as a commission stylist in the last few years. Not because I don't like the model; when I was a salon director, I loved how it was blended with commission-based employees with hourly employees and booth renters.
We were living in the boss babe generation, but the trouble is not everybody is meant to be a boss. So we’re now seeing a resurgence in commission-based salons.
I’ve received a couple emails recently from stylists who are thinking about going back to commission and even salon owners that want to move back behind the chair as commission stylists. There are some fantastic perks to working in a commission salon as a stylist., which is why I see such a surge back to commission over the next years.
I know I have a lot of listeners who are in cosmetology school or are new to the industry and are thinking like is commission really the way to go and should I consider it?
Well, heck yes you should consider it. But there are some things to look for in a solid commission salon since it's important to go in eyes wide open and to know what the experience is going to be like. Today I want to talk about solid commissions salon success strategies from all angles: if you plan to own or work at a commission salon, what that looks like, what it will feel like, and how to make the most of the experience.
The Pros and Cons of Booth Rental versus Commission
I think both booth rental and commission have their perks and challenges. And when we're at the crossroads of trying to decide if we want a booth rent or be commission, you have to weigh out freedom and flexibility versus structure and stability.
If you are marketing minded, very driven, super motivated and lifelong learner that will do whatever it takes to make your business succeed, booth rental is a way better option.
But if you're somebody who likes to get work done, go home, and enjoy my free time, commission can be a really great thing.
There is this misconception that booth rental is where the money is at. Yes, there is a tipping point where you do make more money in booth rent, but you also work harder. It depends on the kind of lifestyle that you want to live and what really works best for the way you want to run your business.
Pros: Why commission rocks
When I speak to the idea of commission salon, I am not talking about any kind of 1099 independent contractor arrangement where salon owners are calling their stylists commission, but they aren't paying any of their taxes or giving them regular paychecks with deductions.
I’m talking about when you show up on your first day there’s an established employer/employee relationship: you fill out an I9 and a W-4 so your salon owner can pay income tax for you.
- That 7.5% employee tax is covered. 7.5% is a lot when you start making some money. So the fact that your employer picks that up versus you paying it yourself is awesome.
- The salon is maintained. Color and retail are stocked and ready for you.
- A baseline of minimum wage. Under the Federal Labor standards guidelines, every person in all industries working in the United States needs to be paid at minimum, minimum wage. So even if you take zero clients, you still make some money. That's a really nice safety net.
- Some salons offer pretty amazing benefits. Not all salons offer benefits like health insurance and a retirement savings plan, it’s huge for salons that do.
- Education. Most employee-based salons offer more advanced education opportunities for young up-and-coming stylists than booth rental salons can provide.
- Increased marketing exposure. A commission salon often can afford to have the marketing support that a booth rental salon wouldn't have.
- A lot of the tax prep is done for you. You’ll get a W-2 every January that shows how much tax you've already paid in, so you just have to file your simple IRS form versus when you are a booth renter, you have to keep track of all of your expenses and deduct them against your income.
Cons: The perceived downsides of a commission salon
I say “perceived” because to some people, these wouldn't be downsides. There'd be perks. But I think some of these things that make people hesitate about going commission.
- You have a boss. To me, “boss” is a dirty four-letter word. It makes a lot of us picture a grumpy person who just comes in, doesn't really bother doing anything to motivate anybody, harps on people for using too much color, is negative about the income level in the salon. Nobody wants to work for somebody like that.
But when you think of a leader, you picture a person who is pumped up and excited to do new things for the salon. They want every single stylist in that building to succeed. Working for somebody like that is the best, most motivating thing you could ever do. You as a stylist feel like you’re investing your money and energy into this business and getting what you pay for: a beautifully stocked lab, leadership, marketing, all of the things that you perceive as value as a stylist.
- You can't do whatever you want whenever you want. It's not come and go as you please. You have to request days off and vacation time from the owner. And sometimes you’ll be denied. Would that be frustrating? Totally. Nobody wants to have their vacation time rejected. But the owner is running a successful business, and you are a professional. And that means sometimes we just have to show up and do our job.
- You have to follow the rules. You're going to be told no, that you have to wait on that idea, that that’s not how we do things around here. That's difficult. But a good salon leader will be open to their employees’ opinions because they want to see the business grow with you.
What to look for in a properly run commissioned salon
If you're a commission salon owner, take note: it is time to elevate the bar in our industry and run legal businesses properly. Being a business owner isn't cheap, but what I do promise you is that when you start doing things right and start showing up as a leader, that's when the profit comes.
- Stylists receive a paycheck from the salon leadership team at least every two weeks. Some salons pay every Friday, and that’s fine. But a minimum is every two weeks.
- Taxes are automatically deducted from that paycheck. Stylists should receive a pay stub with those deductions in some form.
- Stylists complete an I9 and a W-4 form when you start working. These forms verify your identity and deduct taxes properly. If you’re located outside California or the United States, it would be whatever documents are required to verify your identity and then your tax deduction confirmation documents.
- A true team environment. As human beings, we want to be part of a tribe. So when we look for that culture and a team at work, a commission salon where everyone's just doing their own thing is going to struggle to turn a profit and maintain staff. There should be shared goals and vision established by the leadership, the feeling that we’re building this amazing salon together.
- Committed to providing continued education. A properly-run commission salon brings in amazing educators for both booth rent or commission stylists.
- A strong marketing system in place and is open to you doing your own marketing. The salon has a marketing system that effectively drives new traffic month over month by trying new techniques and mixing up offers or promotions. They don’t run the typical salon gimmicks or just post on social media about their discounts twice a year. If they don't have a strong marketing system, it's all good. But then the commission salon owner should be open to you doing your own marketing.
You found the dream salon, and you’re ready to get started. Here’s what you need to do first.
- Set up your social media accounts. Even if you're a brand-new stylist, get started. Learn how to take a good photo. Start practicing, start building up your social media. Even as a commission - based stylist, you have to have active and consistent social media to build a clientele.
- Know the kind of clientele you want to attract. You want to work at a commission salon that is branded to attract that clientele. If you're going to do a lot of vivids and you go into like a very clean, polished, all glass salon, it's going to be a mismatch. Make sure you know what kind of clients you want to be working on and find a salon that supports that.
- Be an employee. Realize that when you are an employee, you're not the boss. This is an especially difficult mind shift if you were a salon owner or independent before. You need to be respectful, a team player and realize that person is trying to make sure they can continue to pay you and keep the doors open.
- Be ready to work the schedule. As an employee, you don't just get to come and go as you please. Whatever schedule is assigned to you, you got to work it. It’s not cute to show up five minutes late for your clients; you have to arrive at work early. And if you didn't market yourself enough and the second half of your day is empty, congratulations because you just gained four hours to work on your marketing strategy. But there's a good side to that too: you've committed to this career in a really different way, and you've committed to making it work.
I hope this post has given you some insight into commission salon success, what it looks like in today's industry, and what is expected. I am personally blended salon (booth renters and commission stylists) obsessed. I think there can be a really beautiful balance between commission and booth rent all under one happy roof.