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Commission vs. Booth Rental: Which is Better for Stylists?

By: Ashley Smith (SALT Administrative Manager)

When it comes to getting work as a hairstylist, you’ve got a number of options to consider. The two most common options include either renting a chair or booth at an established salon, or working at a salon as a commission-based employee. 

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If you’re just starting out as a stylist, deciding between rental and commission can be an overwhelming decision. You want to start making money, but you don’t want to lock yourself into the wrong kind of agreement, and you’re probably asking yourself questions like:

  • How is renting a chair different from working for commission?
  • What is each situation like?
  • How much will I money can I realistically expect to make in each scenario?
  • Etc.

What you’re trying to decide is: Which option is right for you?

The truth is, there are pros and cons for both chair rental and commission-based work. One is not necessarily better than the other; it all depends on where you are in your career, what you hope to get out of your relationship with the salon, and how much risk you are willing to take on. 

Below, we explore the pros and cons of both chair rental and working for commission so that you can make the right decision for you.

How does renting a chair in a salon work?

Chair rental (also sometimes called booth rental) is a lot like a tenant/landlord kind of relationship. The stylist is the tenant, who is renting the chair or booth from the salon owner, who is the landlord.

In this scenario, you have complete control over your business as a stylist. You control payment processing, you make your own appointments, you interact with your own clients, you handle your own branding and marketing, you manage your own retail and backbar product, you track your own business expenses and pay your own taxes. You do everything that you need to be successful. 

In exchange for operating in their salon and using their space, you will pay the salon owner rent each month, which is typically outlined in a contract or agreement set at the beginning of the lease. 

Pros of Chair Rental

As a stylist, renting a chair offers you:

  • Complete control over your work schedule 
  • Complete control over your rates
  • More flexible work environment, which can be easier for juggling a family or school
  • The opportunity to be your own boss
  • The opportunity to avoid the start-up costs of opening your own salon

As a salon business owner or someone thinking about opening a salon, renting out a chair or booth within your salon offers you:

  • Consistent, regular monthly income in the form of rent
  • Less responsibility in the form of staff management

Cons of Renting a Chair

As a stylist, some of the drawbacks of chair rental include:

  • Whether you succeed or fail will be completely dependent on your own abilities
  • You must pay rent regardless of how many appointments you schedule or how much money you make
  • Can be difficult if you do not have a regular clientele to support you
  • You are responsible for your own supplies, inventory, and general upkeep of your business
  • You will not be able to rely on your employer for marketing, training, or other forms of support
  • You will need to source your own health insurance, retirement plan, and other benefits
  • You are responsible for paying the employer’s share of taxes

As a salon owner, some of the drawbacks of chair rental include:

  • You are more limited in terms of what you can control within your own space
  • People are running their own businesses within yours, which can cause some issues

How a does commission-based salon work?

A commission-based salon is a lot more like a traditional employee/employer relationship. In this scenario, the salon owner is the employer, who hires the stylist as an employee to work within their business.

Usually, stylists working in a commission-based role will earn a base salary, as well as a percentage of the revenue they bring in through sales of product or performance of services for clients. The exact percentage of the commission will be established in a contract that the stylist signs when they join the team. 

In addition to a contract, the stylist will also typically receive a set schedule every week where they will be expected to work, an employee handbook with rules they are expected to follow, a dress code (and possibly a uniform), etc. 

The salon is responsible for all client communication, including scheduling, rescheduling, cancellation, payment processing, enforcing salon policies, etc. They will also be responsible for paying the employer’s share of taxes and may provide benefits like health insurance or retirement plans.

Pros of Working in a Commission-Based Salon

As a stylist, some of the advantages of working for commission include:

  • Earning a more steady, reliable base salary
  • No risk of a hefty rental fee
  • The ability to make more money for being more productive
  • Avoiding the stress and complexity that comes with running your own business
  • Not needing to restock inventory, equipment, or supplies
  • Having a full salon to fall back on for training and support
  • You have the opportunity to learn about all aspects of running a salon, which can be helpful if you plan to open your own in the future
  • Benefits from your employer such as health insurance, retirement plans, and training

As a salon owner, some of the advantages of running a commission-based salon include:

  • You retain the ability to brand and market your entire salon
  • You have complete control over what happens in your business, including branding, aesthetic, salon culture, and overall vision

Cons of Working in a Commission-Based Salon

As a stylist, you should consider the potential cons of commission below:

  • You may not have full control over your work schedule
  • You may not have control over your rates 
  • You will have limited opportunities to be your own boss

As a salon owner, the biggest con of running a commission-based salon is the fact that it adds a whole lot of responsibility to your plate. More control comes with more responsibility: To yourself, your business, and your employers. Owning a commission based salon with a full staff is truly a full time job but such a rewarding one! Make sure you are ready for the challenge and ready to potentially give up some of your time behind the chair as a stylist yourself.

Renting a Chair vs. Working for Commission

In the end, whether it makes more sense to rent a chair or work for commission will be a personal decision. Every stylist is in a different point in their career, and has goals for themselves which will be different from other stylists. Remember, you can always make the transition from one position to the other; it's just a matter of determining which style works best for you at that time. 

That being said, a commission-based position would likely be better for stylists who are just starting out and trying to build a clientele, because it removes the added stress of paying for overhead. It also allows the stylist to really learn a lot about the inner workings of a salon, which is incredibly important when someone is first starting out. This way when you do decide to venture out to a rental-based position you know exactly what you want to incorporate within your business and what you don't.

For salon owners, deciding whether you want to rent out chairs within your salon or take a more hands-on approach by offering commission depends entirely on the kind of business that you want to run and how much control you want to retain. There’s no right or wrong answer: It just depends on your own personal goals!

Want to learn more about the salon business? Whether you’re a renter, a budding salon owner, or someone in between, you might like the Salon Consulting Program, with Society Manager Ashley and SALT's Marketing Manager Sarah. These calls are customized specifically to your business situation! Learn all about creating a healthy and vibrant salon culture, performing a pre-screening consultation video, cancellation policies, and more!

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