The Pros and Cons of Booth Renting
by Lilly Rockwell on Tuesday, September 1st, 2009
It’s a common crossroad for many established hair stylists: do I work for a salon or become a free agent?
It can be a tough decision for many hair stylists used to the guaranteed income, comforts and camaraderie that come with working at a salon as an employee.Those who strike out on their own by renting a chair from a salon instead will find greater responsibilities and, potentially, a bigger payoff.
The trend of booth renting has become one of the most contentious trends in the industry, with many salon owners citing it as the potential downfall of their industry.
“I think it has to go away,” Ron King, owner of Bo Salon in Austin, Texas, says of the trend. “It cheapens the business. They are one reason people don’t respect stylists.”
For those pondering becoming an independent contractor, there are a number of important considerations.
“Once you rent, you have to buy everything,” said Cala Renee, a curly hair specialist who runs her own salon in Beverly, Mass. However, “it’s a great start for somebody who might be interested in opening his or her own salon.”
By renting, stylists pay to use the chair and provide their own equipment. In turn, the stylists get the freedom of setting their own hours and keeping all the money that comes in for each haircut, plus tips.
Working at a salon means the stylist is part of the staff and paid on commission, typically between 45 and 65 percent of the cost of the haircut, plus tips. The salon pays for your equipment, training and provides personnel assistance such as a receptionist. A salon can also direct walk-ins or new clients your way.
Teresa Callen has done both, and recently opened her own boutique salon called Image Art in Menlo Park, Calif. She specializes in curly hair. The best part about working for a salon is “they do all the paperwork, they deal with all the government nightmare stuff and your taxes are incredibly easy to do.”
“It’s a form of hairdressing paradise if you’re a true artist; it’s fun to just show up and do hair,” Callen said. Still, Callen says she prefers renting a chair. Simply put, a stylist can make more money that way. “There is freedom — you can work whenever you want,” Callen said. But with more money comes more responsibility. That means providing your own tools and products.
“It can be a huge amount to take in,” Callen said. “You have to do everything.”
It can also be difficult to find the right salon owner to rent from.
“It’s very rare to find a really good salon owner that rents out independent chairs,” Callen said. “If you can find them, it’s paradise.”
Cristin Armstrong has worked as a hair stylist for seven years and currently works at New York City-based Takamichi Salon where she specializes in curly hair.
Armstrong recently considered renting a chair, and even found a suitable location, but decided working at a salon is a better fit for her.
“With chair rental it is basically a business-within-a-business,” Armstrong said. “The salon I looked at, the rent was really low.” This salon was asking for $65 a day in rent, considered a bargain for New York. Other stylists said rental fees vary from $850 to $2,000 a month depending on the location and size.
For single mothers or hair stylists looking for a more flexible schedule, booth renting can provide more flexibility as you can determine your own hours.
Working at a salon is best for anyone who is new to hairstyling, or anyone who wants to focus on cutting hair instead of juggling schedules and product inventory.
“For anybody starting out, definitely they want to go somewhere where they can make commission and then consider renting when they are more established,” said Tiffany Anderson-Taylor, who works at the St. Petersburg, Fla,–based Essentials the Salon. Working at a salon gives a stylist an automatic client base to draw from, and exposes them to more experienced hair stylists and training opportunities.
“I could easily look at that option (renting a chair) right now because I do have a big client database and I have a full book right now.” But her salon doesn’t offer booth rentals and she is “really happy” working there.
“The only reason why I’m an independent contractor is I’m a single mother of two,” said Callen, the owner of Image Arts Salon. “If I didn’t need to make more money, I’d love to just show up and cut hair. “
Marty Franco, the owner of Baltimore-based Manetamer Salon, said booth rental could be a financial boon for both the salon owner and hairstylist.
“If you are a stylist and you have a very big book, I recommend booth rentals,” Franco said. A hair stylist with a full book can make about $3,000 a week, he said. While you have to purchase your own supplies, much of that is tax deductible because it is a business expense.
But Franco adds that it can also be distracting for the salon owner and doesn’t make for a very cohesive team when hair stylists are working for themselves.
King of Bo, where two out of the 14 stylists are booth renters, is much more outspoken about the effect on salon owners.
“Independent contractors aren’t team players,” he says. “They all want this beautiful salon to work in, but they don’t realize what comes with it. They want all the profit, but they don’t want any of the expenses. They want to do what they want to do and come in when they want to come in. That’s why I got rid of almost all of them at my salon “
Many hair stylists are happier working in a salon even though they might be able to make more working on their own.
How to Choose the Curly Hair Products that Fit Your Needs
by Lilly Rockwell on Friday, July 31st, 2009
The Styling Hutch in Plano, Texas, has made a name for itself for its expertise in cutting curly hair. So when owner Claudia Phillips was looking for a line of products to use and sell at her salon, she wanted to make sure she chose one that covered the gamut of clients who walked through her door — from wavy to super kinky.
After using products by Ouidad, a New York stylist who has been a pioneer in curly hair care, she decided to get her salon certified to use Ouidad products and cutting techniques. Phillips says she tried several lines, but across the board, nothing else compared to Ouidad.
“The fact that I can use the whole line for all of our clients was my major consideration,” Phillips says. “There was something for everyone, and it really works. Clients go out looking good, which makes us look good. People come from the other side of the Dallas Metroplex to buy more products.”
Walk into a random selection of salons, and you’ll see that the hair-care products stylists use vary dramatically. Their product choices often are influenced on such factors as the type of salon a stylist works for, the season, the clientele, environmental leanings, nearby competitors and even the economy.
For many stylists, picking which products to use can be an overwhelming task. How do you cut through the marketing hype to pick which products to offer clients and which ones to discard? Stylists say this task is made especially difficult when dealing with curly hair. A product that works well with wavy hair won’t necessarily help someone who has tight corkscrew-shaped curls. And often the choice may go beyond the product to the type of support a company offers, such as training.
Some salons carry one line, such as Aveda, exclusively.
In some cases, a stylists may work for a salon affiliated with a certain line of products, such as Aveda, Redken or Bumble and bumble. Others stylists may have more leeway, picking products based on the preferences of their clientele and their own personal likes and dislikes. That may mean picking and choosing products from a variety of brands to find the products that meet particular needs.
Some stylists have intricate methods they go about to select hair-care products.
Teresa Callen, who opened her Menlo Park, Calif.-based Image Arts Salon this year, said she frequently receives sample shipments of new hair-care products and sends some time through them to decide which ones to use. But this can be a chore, she says.
“When you work with a product you have to know it as intimately as the lines on the back of your hand,” explains Callen, who has worked as a hair stylist for more than 25 years and specializes in cutting curly hair. “Some of it is trial and error.”
Callen acknowledges she has made “a ton of mistakes” over the years.
“I first use them on my head, then I have my friends use them,” Callen says.
This process takes two to three weeks, and then her friends deliver what they don’t use and provide feedback. She also has a few select clients try the samples.
“Some clients are brilliant at giving feedback and they love to get new products,” she said.
Jessicurl is among the lines Teresa Callen sells in her salon.
Callen currently offers Jessicurl and DevaCurl products, but keeps a close watch on which products sell faster than others. If sales drop “so bad I can’t move it off the shelf,” Callen’s solution is simple: she stops carrying it.
Picking the right product line can really enhance your business, Callen says, bringing in customers that are loyal to that brand. “In the long run, it can be lucrative,” to stick with a certain product line, she says.
Other hair stylists prefer to switch it up, bringing in new lines to attract clients.
That was the case for American Mortals Salon, a 9-year-old salon in Philadelphia. Co-owner Kimberly Bond says she tried a wide variety of product lines before pursuing Bumble and bumble, after watching one of the company’s “Hair Stories” videos, which documented the company’s history.
“We were riveted,” says Bond. “It was the first time my husband (co-owner of the salon) ever related to something like this. It was amazing to witness a company that had a culture so similar to our own culture. They created a product line based of need from their stylists’ experiences.”
American Mortals made the switch three years ago, and retail sales have responded dramatically, tripling from what it was before they became affliated with Bumble.
“We’re selling more retail than we ever sold before, and we have better access to training,” said Bond, who is a big fan of the company’s Curl Conscious line for curly hair.
Hair stylist Cristin Armstrong, who works at New York City-based Takamichi Salon, loves to try new products.
“I try to keep current and ask my clients what they are using,” she says. “I’m always curious what people are using and what is new.” Armstrong spends time researching new products as well, pouring over reviews online and flipping through style magazines to learn about new products.
Hair stylists said they learn a lot about new products by asking their clients what they use. If they hear a certain name pop up frequently, stylists say they will try it out on their own hair and look into carrying it at their salon.
Some stylists prefer to develop and sell their own products, a trend that has been particularly apparent in the curly niche. Curly hair guru Jonathan Torch, who opened the Toronto-based Curly Hair Institute in 2005, has designed his own product line Curly Hair Solutions.
Torch said developing the product line was key to improving his business. If somebody has curly hair, it needs cutting very seldom, while straight-haired customers may need their hair cut more frequently. Curly-haired customers are more apt to buy styling products and targeted shampoos and conditioners more often, he said.
Salons and stylists that cater to both curly and straight hair say they must offer a wide range of products for their clientele because their needs vary.
Tiffany Anderson-Taylor is in charge of retail sales for Essentials, the St. Petersburg, Fla. salon where she works.
“The lines we carry we felt were more appropriate to handle everybody’s needs,” she said.
Her salon carries DevaCurl, Aquage and Brocato product lines.
“Deva was one of the first to stand up and say ‘look, curly hair is different and you need to respect it for being different,’ ” she said.
In some cases, the decision is based on more than just the product in the bottles. It may be the brand recognition, the business support or the training that help a stylist or salon make the decision to choose one brand over another.
Bond was attracted to the business support Bumble provided as well as the continuing education. “You could see they really supported their salons,” she says.
Being a Ouidad-certified salon has helped The Styling Hutch attract clientele from around the country, says Phillips.
“That affiliation gives us credibility among our curly clients that we know what we’re doing with curly hair,” Phillips says.
Sometimes a salon has to take competitive factors into consideration, such as diversion. This refers to the controversial practice of professional hair-care products finding their way into grocery stores and pharmacies because of lax distribution processes. Walk into any supermarket, and there will be an aisle full of brands that used to be found exclusively at salons — a trend that angers stylists and cuts into their bottom line.
Essentials will only offer products that can’t be bought at your local supermarket, which enhances the allure of the salon, Anderson-Taylor said.
Now that many consumers are paying attention to how “green” their purchasing habits are, many stylists prefer to offer products made organically. Stylists say it’s important to read the product labels to figure out which products truly adhere to organic principles and which don’t.
Cala Renee, who runs her own salon in Beverly, Mass., says she carries the DevaCurl line in to cater to her curly-haired clientele, but also liked the product line’s emphasis on natural plant-based ingredients.
“I searched for a line that is all organic,” said Renee, whose salon specializes in curly hair.
Cala Renee carries Sukesha products in her salon.
She also carries Sukesha, which contains no sulfates and focuses on plant-based natural ingredients. And she offers the Aquage line, which uses organic ingredients from seaweed and algae extract. “I’m trying to go as green as possible.”
Representatives visit her salon every two weeks, she says, pushing new products. Like many stylists, she uses the products on herself first before she’ll consider using them on her clients.
Still, no matter how great a product is, if it’s too pricey, she doesn’t offer it, adding that a salon’s price ceiling can change depending on its location. She also monitors what her competitors are carrying and at what prices.
With all the attention Renee pays to the products she carries, she said she still isn’t sure that they ultimately drive clients to choose her salon over others.
“I don’t necessarily think it’s the product line that gets the people into the salon,” Renee said. “I think it’s the reputation of the hair-cutting and curly hair specialists.”
She hesitates a moment and adds, “And then, they love the Deva.”
The Benefits of Picking a Niche
by Lilly Rockwell on Wednesday, July 1st, 2009
Stylists have found picking a niche works well for their business.
Hair stylist Tiffany Anderson-Taylor’s weekends at her St. Petersburg, Fla. salon are booked a month in advance. She has clients fly in from far-flung states such as Arizona just to get their curly hair cut.
Not bad for a stylist who only got her hair-cutting license two years ago.
Anderson-Taylor credits her popularity to her decision to focus exclusively on cutting curly hair.
“There are so few of us that anyone who has a passion and is serious about doing a good job can do really well,” Anderson-Taylor said.
Picking a niche, whether it is cutting curly hair or a focus on hair coloring, helps to build a loyal clientele willing to pay top dollar for an expert.
“Whether you’re a curly hair specialist or not, you have to get your name out there and differentiate yourself,” Anderson-Taylor said.
Hair stylists suggest if curly hair isn’t your thing, try your hand at coloring or perfecting the art of an intricate up-do. Stylists who have chosen a niche say that it has helped grow their business and helped them better weather down financial times.
Specializing in curly haircuts and styles is especially popular because there is a growing demand for this expertise as straightening becomes less popular.
“Curly girls have always found me wherever I work,” said Teresa Callen, owner of the Menlo Park, Calif.-based Image Arts Salon. “It’s so rare for people to be good at it. Up until five years ago, it was terrible to be someone who specialized in curly and wavy hair. Right now curls are becoming the height of style.”
In the 1990s straight hair was popular and “it was hard to get clients,” Callen said. But in 2000, curly hair really began to catch on, she added. The demand has only increased since then, and Callen said her appointments fill up months in advance.
“Loyal doesn’t begin to describe a curly-haired girl when you do her right,” said hair stylist Laura Vendetti, who runs Fairhope, Ala.-based Laura Hair Co. “They are by far the most loyal clients I have.”
Although Vendetti also cuts straight hair, she said her curly-haired clients are more likely to be repeat customers. Because many beauty schools don’t offer training on curly hair, a stylist who can learn to cut curly hair well is in high demand.
A growing number of stylists are seeking out special training in curly hair cutting. Curly hair expert Lorraine Massey, the author of “Curly Girl,” and the creator of the Deva line of hair care products, offers training at her salon in New York.
Others teach themselves. Curly-haired Vendetti remembers the hairdresser who “butchered” her hair as a child, and it inspired her to perfect the curly hair cut. Anderson-Taylor practiced on friends and models and had them post reviews of her skills on Web sites like NaturallyCurly.com in order to gain more clients.
“Having a niche is important,” said hair stylist Cristin Armstrong, who works at the New York City-based Takamichi Salon. She specializes in cutting curly hair, but works at a salon that works with all hair types. “The curly hair thing has been a really good niche for me because it has helped me build my clientele.”
When picking a niche, find something you feel comfortable doing, Armstrong said. Often curly hair stylists have curly or wavy hair themselves. Others simply gravitate toward the challenge of a curly hair cut or the accuracy that straight hair demands.
“I feel like I have an understanding of it,” Armstrong said. “I understand texture. I like creating simple styles they can create at home.”
She adds that specializing in curly hair helps her stand out in New York City’s crowded, competitive salon landscape.
Some hair stylists have managed not only to make curly hair their specialty, but also have built entire salons that focus on curly hair. Jonathan Torch founded the Toronto-based Curly Hair Institute in 2005, a salon that only cuts and colors curly hair. He also has developed an extensive line of curly-hair products. He said curly hair has always been his passion, and finds the different sizes, shapes, and textures of curly hair fascinating.
“You can’t just wake up one day and open a curly hair salon,” Torch said. “You really have to love it.”
For Torch, developing an expertise in curly hair isn’t about making money, though his salon is doing very well. He likens it to therapy, helping people who have never had a “solution” to taming their curly manes.
“The minute I discovered it, I gravitated toward it because it’s such a rewarding feeling,” says Torch.
Riding Out the Recession:
10 Key Tips
by Lilly Rockwell on Wednesday, July 1st, 2009
Economic pundits often say the hair care industry is recession-proof, grouping it with other solid job-creating industries such as health care or education.
While people may cut back on buying expensive fur coats, the theory is that beauty treatments are preserved because they offer a less expensive self-esteem boost.
But in this Great Recession, many hairstylists say their business has suffered, with clients waiting longer between appointments, and eliminating extra services.
Sales are up 5.2 percent for the personal care industry (which includes hair and nail salons) in the last 12 months, according to market research firm Sageworks. But these gains are modest compared to larger gains — of 8 percent — in recent years.
“(Clients) go a little longer in between hair cuts,” said Washington, D.C., hairstylist and owner of Fiddleheads salon Beth Abroms. “When you find a good curly hair stylist it’s not about going somewhere else or somewhere cheaper.”
Clients are stretching their appointments from every six to eight weeks to even three to five months, Abroms said. About half of her clients are asking for ways to save on color treatments, including suggestions for ways to do it at home.
“It becomes more important to get new clients because people are spacing out their appointments,” said Miki Wright, a salon business coach. “You can keep your income exactly the same by adding a few more clients.”
Although some of Abroms’ clients are going through tough times financially, they have stuck with her because of her reputation as a good curly-hair stylist.
“People are coming in saying ‘I’m not going anywhere else’ because they’ve had such disasters with people who cut curly hair,” Abroms said. “They aren’t trained.”
In some hard-hit areas such as California, hairstylists say while clients are going through trying economic times, they aren’t willing to cut back on hair cuts.
For many, the reason is practical; keeping up personal appearances is considered key to landing your next job. This is especially true for curly-haired customers, who believe that they might be discriminated against if their curls are too unruly.
“I feel like my business is doing great,” said Menlo Park, Calif. hairstylist Teresa Callen, who owns the Image Arts Salon and specializes in cutting curly hair.
But she isn’t totally immune to the economic turmoil — her clients have started stretching the time between appointments to eight weeks and are opting for more inexpensive color treatments. And while the recession hasn’t caused the amount of money flowing in to change, it has caused her waiting list to shrink from 40 to three.
“It’s painful to watch clients who you just love and adore go through a terribly hard time,” Callen said. “That is what bothers me the most.”
This recession has been devastating for some hairstylists, who have watched their business take a nosedive right along with the stock market last fall.
Hairstylist Laura Vendetti is no stranger to tough times — since going into the business in 1990, she has survived two recessions and two major hurricanes that wreaked havoc on her community of Fairhope, a suburb of Mobile, Ala.
She survived those calamities with hardly a blip, she said. In some cases, her business even increased after these tragedies. Then last October, after the sudden drops in the U.S. stock markets and the collapse of several banks, her phone wouldn’t stop ringing with clients begging to cancel appointments.
“It was devastating,” said Vendetti, who specializes in cutting curly hair. She recalls one October day going into work at 8 a.m., checking her voice mail and hearing nothing but cancellations, and “putting my head on my desk and crying.”
Eight months later, Vendetti is still struggling to pick up the pieces. She had to take on a second job doing manicures and pedicures at a nearby salon and spa.
It was humbling to go from running a successful boutique salon to trimming a stranger’s toenails, she said, but she has learned to love her new job and has been able to cut her hours from 20 to 8 a week. “It built a lot of character in me.”
In New York City, the fortunes of the hair salons there are tied with the health of the weakened financial industry. Christo, the legendary curly-haired expert who needs no last name, said his Curlisto Fifth Avenue salon has seen its sales drop.
“I cannot say that we are not affected,” Christo said. “The whole world is affected.”
Christo said that they have fewer new clients coming in and that current clients are postponing appointments for “when they have money.” Still, some of his clients from JP Morgan had lost their jobs and continued to come in for haircuts.
Because of his focus on curly hair, Christo believes he has weathered the economic storm better than the traditional salons in New York.
“When you have a specialty it makes a huge difference in your business,” Christo said. The clients who come to Curlisto are typically very loyal, he said.
But Christo isn’t sitting on his laurels. He is offering free monthly seminars on styling curly hair for potential customers, offering wine and cheese and free samples. These popular talks are packed with dozens of women, he said.
It’s important to market yourself and not be shy of opportunities for free publicity, Christo said. Other hairstylists said they have become more aggressive in passing out business cards, even stopping strangers to ask them to come in for a haircut.
Ten Ways to Boost Your Business in a Bad Economy
Curly hair stylists from across the country shared their advice on how to keep your chair warm and your scissors moving in a bad economy.
1. Clients are looking for a good deal in a down economy. While some hairstylists refuse to discount, many agree that it doesn’t hurt to offer small discounts such as $5 off, or deals that get new customers in the door such as “two for the price of one.”
2. Start a referral program. An example: a free hair cut when you refer five clients. This will give you an instant boost in your new clientele and make your current clients happy at the same time.
3. If a client calls and cancels an appointment due to a sudden job loss, offer a steep discount, or in some cases, a free hair cut until they get on their feet. These clients will be extremely loyal to you when their personal circumstances do improve.
4. Go back to the basics by focusing on the clients you do have. Offer good customer service; cold-call clients to find out how they like the haircut. Don’t keep them waiting longer than 15 minutes and offer additional styling and maintenance tips.
5. Don’t try to push new products on clients. A down economy isn’t the best time to try to sell products because you risk irritating the clients you do have. Do offer free samples and give advice on what products to use if a client asks.
6. Seek out new clients, but don’t rely just on word-of-mouth. In a down economy you might be able to find potential customers unhappy with their current salon.
7. Invest in advertising in your local newspaper or a niche Web site. Or use free services such as Facebook, Twitter and MySpace to advertise your services.
8. Focus on building up a robust savings account that can get you through lean times. Ideally, include at least three to six months’ worth of expenses in the account.
9. If you find yourself with time on your hands, educate yourself on current hairstyling trends. Do find ways to educate yourself for less. Instead of spending $700 on a training seminar in New York City, spend $70 to get the DVD.
10. Offer free consultations or free seminars on how to style and take care of curly hair. Make it a party, with free snacks and hair samples to give out.
of Money Management
by Lilly Rockwell on Saturday, May 30th, 2009
Laura Vendetti says it’s hard to manage finances when running your own hair salon business.
After working for 10 years as a hairstylist, working at salons or renting a chair, Laura Vendetti decided it was time to open her own salon in the Mobile, Ala., suburb of Fairhope.
Not wanting to go into a lot of debt, Vendetti rented a 450-square foot space, filling it with a single chair, mirror, and a telephone with voicemail. She put it all on two personal credit cards, which she paid off in six months.
“Keep it extremely basic in the beginning,” Vendetti said. “Clients won’t notice a $2,000 chair or the fancy lights. They’ll remember the haircut.”
Nine years later, Laura Hair Company is a thriving boutique salon operating out of 1,000 square feet, with clients willing to drive in from other states to get their curly hair cut by Vendetti. She’s hired two other hair stylists who work at her salon.
But salon owners like Vendetti say it’s tough to manage finances when running your own hair salon business. Keeping track of tips and learning to budget can be daunting, especially since most beauty schools don’t offer training on money management.
“Because we’re right brained, it’s very hard for us to focus on accounting and numbers,” Vendetti says.
Salon owners say it’s trial and error that taught them how to run a profitable business. Some suggest hiring a business manager while others prefer to do it themselves, learning how to balance books and manage a payroll.
“It was challenging once we started hiring people,” says Cala Renee, who founded her Beverly, Mass. salon 20 years ago and specializes in cutting curly hair. “I didn’t have a payroll service. I had to do everything at first.”
Marty Franco, who runs the Baltimore-based Manetamer Salon, was fortunate to have some familiarity with accounting when he opened his own salon.
“I do my own books. I could have been an accountant,” Franco says. “I do all my taxes. I’m a little weird as a hairdresser.”
He worked as a manager at several salons, including Saks Fifth Avenue, before opening his own business.
“I didn’t want to die behind a chair, I wanted to own my own salon,” Franco says. “So I went into management first. You might be a great hairstylist but when it comes to managing a salon, it’s a whole different deal.”
Balancing responsibilities such as bookkeeping and managing product inventory is difficult to fit in when you’re also cutting hair full-time, salon owners say.
Renee says the key for her is outsourcing some responsibilities, like payroll, and setting aside time each week to devote to bookkeeping.
“What I found is Mondays I only work a half day. Half the day I’m on the floor and the other half I’m doing my books,” Renee says.
Jonathan Torch has handed the bookkeeping over to an expert.
Jonathan Torch opened his Toronto-based Curly Hair Institute in 2005. His salon focuses exclusively on working with curls, and he also sells a curly hair product line. But he’s also a savvy entrepreneur, and has discovered that keeping his hands off the books and on the scissors works best for him.
“I personally focus on the hair, and I have partners that help control the whole business aspect,” Torch says. “Every hairdresser I know that has to do both. It’s quite a handicap. You have to understand the laws of the land and the taxes.”
Torch said if you’re a hairdresser focusing on business, than your “creative flow” will be interrupted and the salon won’t be able to grow.
“You cannot do everything,” Torch says. “You have to be able to delegate.”
Teresa Callen knows that good bookkeeping practices are critical.
Menlo Park-based hair stylist Teresa Callen recently opened her own 500-square-foot salon, but before that rented booths at other salons. When you’re in business for yourself, good bookkeeping practices are important, says Callen, who learned how to keep books from her sister, a certified public accountant. She hates the paperwork but is diligent about keeping track of every expense.
“I’ve been audited three times,” Callen says. “That is the only reason bookkeeping and accounting exist, to withstand an IRS audit.”
Like Torch, Callen has hired someone to help her schedule appointments so that she can focus on cutting hair. This outside assistant not only takes her phone calls, but also manages her e-mail inbox.
“I’m doing hair and not answering the phone,” she says. “The assistant charges between $300 and $400 a week for her services. She’s worth it. She makes back what I pay her in cancellations.”
Salon owners struggle with whether to rent a booth or pay hair stylists on commission. Some salon owners don’t recommend renting booths because they believe a salon works better when everyone is working as a team.
“My experience is I have to surround myself with a team of people that are working in the same direction,” Torch says. “I find that when people rent a booth, even though the salon is successful, it can be a problem with teamwork. “
During her first several years running her own salon, Vendetti rented a booth to a nail technician, which she used to pay her rent. She currently rents a booth to one of her hair stylists, saying the hands-off approach works well.
What to pay hair stylists working on commission varies. Salon owners and hairstylists said commission ranges from 45 to 65 percent of the cost of the haircut.
“You have to keep in mind what you pay someone and stick to it,” says Franco, the owner of Baltimore-based Manetamer. “You can’t give a hairdresser 60 percent and then change it to 50. You have to be fair and never just hire someone at a super high commission just to get them in.”
Hairstylists say they struggle with how to manage tips. Most say they try to treat tips as income, depositing it into a bank account or using it for basic bills.
Curly hair specialist Tiffany Anderson-Taylor, who works at St. Petersburg, Fla.-based Essentials the Salon, diligently fills out a form each night that records how much she made in tips.
“I treat it as part of my budget,” Anderson-Taylor says. “With tips it’s arbitrary. You never know how much you are going to make. After you’ve done it for awhile, you’ve got a pretty good indication of what your weekly income is going to be.”
Some hairstylists may be tempted to not report their full income from tips in an attempt to avoid paying taxes. But not only does this open you up to the possibility of an IRS audit if your income looks suspiciously low, but it also impacts your Social Security.
“Not declaring all of your tips is a bad idea, for two reasons,” Anderson-Taylor says. “Assuming Social Security is around when you retire, it is based now that you’ve made. If you are not declaring your income, you will get a smaller check.”
And Anderson-Taylor explains that your taxable income also impacts your buying power as a consumer when it comes to buying a house or a car.
“They will look at the income you make,” she says. “If you’re not declaring tips it looks like your buying power is less. “
Hairstylist Cristin Armstrong, who works at New York City-based Takamichi Hair, says tips are “a big part of the income and you definitely want to keep track of that.”
“It might be hard of some people to manage because so much cash comes in,” Armstrong says.
Even if you work at a salon, you have to treat it as your own business, Armstrong said, and maintain discipline over your cash flow. Hairstyling is a great business, if you treat it like one. “With hairstyling, you can make a very decent living.”
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