Booth Rentals

Beauty businesses can be divided into two categories: payroll and non-payroll. Those under the payroll category employ staff who are supervised by managers in the workplace. Meanwhile, non-payroll salons include renting work salons where self-employed individuals can offer their services. In non-payroll establishments, the working manager acts as a landlord and bears no authority regarding the operation of the rented workplace.

ORIGINS OF BOOTH RENTING

Booth renting in salon business industry can be traced back in 1916, based on the story shared by A’Lelia Bundles as told by her great-great-grandmother, Madame CJ Walker.

In the earlier days, booth rentals were widely utilized in the salon industry. However, this model of running a salon lost its popularity by the end of the 20th century. This downtrend in use of booth rentals can be attributed to emergence of various issues, including lack of structure, lack of professionalism of salon workers, feuds, and dishonesty in reporting of incomes. As a result, booth renting was banned in a number of states. However, the problems surrounding booth renting possibly roots from issues on proper execution. Owners and renters of booth salons can succeed in this type of venture if they learn how to properly operate a booth rental business system

BOOTH RENTAL

There are not a lot of information about booth renting, and any information available normally contain incorrectly interpreted data. In booth renting, a salon owner rents his work place and salon amenities to salon-service providers for a certain price rent. For each booth rented, the working technician works on his own to promotes his services to clients and any other products that they may offer. Each salon technician is also in charge in managing his finances and taxes. Running a booth rental requires great discipline and wrong practices and arrangement can lead to its failure. Skilled beauty technicians may not be work well with running booth rentals. However, some individuals have sufficient technical and business skills to succeed in running a booth rental.

RELATIONSHIP OF TENANTS AND LANDLORD

Tenants and landlords must be able to build a good working relationship. Both parties should respect each other. Salon owners must be fully aware of their role as landlords, and booth renters should not forget that they are also tenants.

Meanwhile, in various booth rentals, some tenants and landlords show relationship normally observed between employers and employees. Other tenants, on the other hand, consider themselves as more of a freelance and thus do not consider the rental owner as their boss. Other relationships lying in between such cases can be also observed in other cases.

However, despite the confusion the surrounds the relationship of booth rental owners and renters, the owners should not forget their authority and implement the necessary management practices in their establishment.

Nail Salon Owner Salary

In the US, salon business industry comprises $56 billion worth of salon business, which can be found in over 300,000 locations. Moreover, there are salons that solely offer nail care services. According to the 2010 statistics released by the US Bureau of Labor Statistics, around 51,990 employees are employed as manicurists and pedicurists, whereas a portion of workers in the salon business industry are self-employed. The following are some important data concerning salon owners and employees:

  1. SALARY

In 2010, nail salon owners earned around $40,580. Meanwhile, self-employed individuals are not endowed with benefits. The income normally comes from space rental in case of self-employed nail technicians or through salon profits for employees and salon owners.

  1. JOB OUTLOOK

Between 2008 and 2018, the salon business industry is expected to increase to about 14% to 19%. This growth can be attributed to the improving economy. However, it can also be affected by various factors, such the regulation of government for chemicals, increased taxes, and healthcare costs.

  1. WORKPLACE

Running a salon requires maintenance, bookkeeping, training, loss prevention, and customer service. Salon owners also consider adding improvements or expanding their services, for example, by offering beauty products.

  1. WORK EXPERIENCE AND TRAINING

Nail salon employees or self-employed nail technicians should be properly trained. These people can earn certifications after training for services that they offer. Salons with highly trained staff are more apt to gain the loyalty of customers and thus earn more income.

  1. DIVERSIFICATION

Profits of salons can be increased by offering other forms of beauty services. Some salons offer their own line of beauty products, whereas other salon establishments offer other services, including spa, services and hair styling.

Salon Profitability

One of the most significant factors that will determine the success of a business concerns its operations. In relation to this, entrepreneurs and business owners must consider the number of hours that they allocate for accommodating the maximum number of clients every day.

All people involved in various business industries that they work goes beyond the designated business hours. In case of hair salons, their operation hours normally lasts from 10 am to 9 pm everyday or 10 am to 6 pm in smaller areas. Business hours are commonly the same for establishments located in malls or department stores, whereas others just run until 5 pm during weekends. Salon owners should also particularly pay attention to lunch hours and early evening hours, which are considered the busiest times for such businesses. Meanwhile, in other cases, salon owners may have to open earlier or set a specific time for important clients.

Thus, salon owners who properly manage time in operating their business are expected to earn more profits and be more successful. In relation to time management, salon owners should focus on ensuring that their businesses are in constant operation, that is, all the staff are performing their jobs and everyone in the salon, including them, is doing something worthwhile.

Aside from time-management, correctly priced services also contribute to the success of a salon. Extremely high prices may dissuade clients from making an appointment. However, very low prices may put at risk the profits of a salon business.

Thus, salon owners should ensure that they only offer competitive prices for their services. Likewise, they should consider factors, including labor and supplies, overheard, and profit, that influence prices.

  1. LABOR COSTS COMPRISE SALARY AND BENEFITS FOR STAFF

The salary of owners is a part of the total labor costs, which can be the salary paid to a staff per hour. Labor costs for different salon employees may differ depending on the time they allot for rendering their services to customers.

  1. OVERHEAD COSTS THAT ARE REQUIRED FOR OTHER BUSINESS OPERATIONS

Other contributing factors to costs include mortgage, lease payment, and budget for utilities. Estimate overhead costs should reach 40% to 50% of labor and material cost.

  1. PROFIT

The normal expected profit lies around 11% to 15% of the net profit. When computing for the target net profit, salon owners should take into account the markup percentage factor.

On the other hand, salon establishments must be regularly maintained to ensure smooth operations and clean image. Salon employees should not settle with just sweeping or mopping the floor. They should thoroughly check all nooks and corners to ensure the cleanliness of their workplace.

Meanwhile, in some cases, salon owners avail the services of maintenance crew who are tasked with handling almost all maintenance tasks in an establishment. Such services normally come with a steep price but salon owners are assured that their businesses will end up sparklingly clean. Others prefer hiring one or several employees who are tasked with just tasks related to cleaning or maintaining salons.

Some salons earn additional profits by selling retail products. In such case, staff are trained to promote the beauty products offered by their salons.

On the other hand, gift certificates are another source of income for salons. These businesses may offer gift certificates which their customers can give away as presents to their families or friends. Moreover, production of gift certificates only requires a small capital and thus can be used in generating more profits.

 

Toxin Free Nail Products

OPI’s eco-friendly Infinite Shine nail polish

Oak Cliff is one of the most popular nail polish today because it is toxin-free, fume-free, and all-natural. Thus, people should try this product during their next nail salon appointment.

The use of this product is part of salon owners’ actions toward providing services to customers in a healthier and safer manner.

In this regard, various nail products are now produced without using harmful chemicals, such ammonia, formaldehyde, and other complex and potentially dangerous compounds. In addition, some salon now also offers several variations of their nail services. In other cases, salons avoid doing manicures and pedicure at the same time to allow their customers some time to relax. This way, clients appreciate more their nail salon experience.

One salon, Pink Pedi, offers other services, such as neck and should massages, which can be partnered with other options, including clay mud masks for the feet. The salon also offers lotions and massage oils which customers can buy for use during their treatments. One of their most popular add-ons include the Pink Peppermint scent that comes with signature body butter.

Pink Pedi is also known for two-eco-friendly brands of nail polish: OPI’s Infinite Shine and Zoya. These products are proudly made by some talented local artisans.

Health Of Nail Salon Workers

With the recent issues that arose regarding hazardous chemical exposures of nail salon workers, legal battles were initiated and headed by people with much concern for community health. To participate in this legal war, some lobbyists give away lipsticks and other beauty products to prevent banning of an industrial compound used as material for enhancing manicure and pedicures.

As a result, people who approve of this ban lost the legal battle, proving the difficulty that arises from fighting an industry that earned an estimated $62 billion in 2016.

This disappointing legal battle led to the formation of campaign organized by salon workers, health workers, and local officials in California. Currently, the group is gaining more support from the US Environmental Protection Agency and Harvard’s John F. Kennedy School of Government.

The group aims at voicing out concerns of the community and to show to the people what is really happening in the beauty industry and its possible effects on people’s health. Members of this group claimed that in the past, a number of nail-salon workers suffered from cancer, headaches, miscarriages, and other health conditions.

From then on, the California Health Nail Salon Collaborative exerted efforts to prevent nail-salon staff from being exposed to toxicants while working. Cities and counties that support this advocacy by certifying salons that participate in banning nail materials and products that are potentially dangerous to workers. Moreover, nail-salon staff are recommended to be provided with proper ventilation, gloves, and masks.

Health complains related to working in nail salons normally involved immigrants hailing from Vietnam, the Philippines, South Korea, and other Asian countries.

In New York, Gov. Andrew Cuoum implemented a new regulation, requiring salons to install ventilation systems and to employ certain health protocols to reduce exposure of workers to chemicals.

Meanwhile, California implements a voluntary program for salons to formulate their own salons when it comes to their operations. Salon owners and workers are also trained and advised to relay any concern that they have with their work.

Last winter, one salon celebrated its achievement in earning a local government certification for healthy salon.

Meanwhile, behind this success, some nail salon workers first suffered from various ailments because of the nature of their occupation. Still, these people used their misfortunes as inspiration to fight for the health and safety of other people currently working in the beauty industry.

On the other hand, trade groups and chemical manufacturers deny allegations surrounding suspected harmful materials. Some of these chemicals include formaldehyde and other compounds which are believed to be carcinogenic or health hazards. Meanwhile, other companies opted to remove such ingredients from their products.

Amidst all these issues, scientific evidence are still needed in order to prove which chemicals pose harmful effects to people’s health. Thus, various authorities, such as California’s Department of Toxic Substances Control, are taking actions to assess frequently questioned targets and to address people’s health concern. Assessment of these materials may lead to formulation of protocols and guidelines regarding specific chemicals and other safer alternatives.

Risks Of Sanitation In Nail Salons

In Denver, some nail salons end up being fined with thousands of dollars because of their unsanitary and risky salon services.

People go to the salon to allow themselves some time for relaxation. However, some customers have experienced otherwise. In fact, some clients claimed that they only felt alarmed and unsafe during one of their salon appointments.

For instance, one customer of Ooolala Nail Salon in Highlands Ranch claimed that one technician cut her with clippers while she was having her nails done. Moreover, this particular customer observed that the nail tech was not wearing gloves and did not even use any first-aid kit to treat their wound. Moreover, the nail tech started pouring some unknown solution to the wound, causing alarm to the customer.

However, one TV program named Ooolala Nail Salon as the eighth dirtiest salon in Colorado in 2016. As a consequence, the salon paid around $2200 in fine. The fine was punishment for using dirty equipment when providing services to customer and for using reagents contained in unlabeled bottles.

Meanwhile, the top 10 most fined salons were guilty of using unclean tools or foot stubs.

With this regard, it seems that most people do not realize the dangers that services like pedicures and manicures may bring. Moreover, dirty foot water and unsanitized clippers may cause infections. Thus, customers with sores or cuts or existing infections should just skip their nail salon appointment to prevent themselves from being infected with bacteria, viruses, and fungi.

Thus, to take care of people’s health, the Colorado Department of Regulatory Agencies (DORA) impose strict regulations on nail salons. Salons are also required to obtain licenses before they start their operations. Likewise, inspectors are very strict in observing the overall cleanliness of salons and their equipment.

Any violations made on these regulations and other implemented standards result in fines or probationary status until they start conforming to the rules.

To guide people when going to nail salons, DORA released some tips for nail salon customers:

  • ENSURE THAT THE SALON POSSESSES THE REQUIRED LICENSE

Customers should see right away in walls of establishment the license for their services. However, if the license is not posted on a wall, the customers have every right to ask the salon staff to see it. Moreover, people should also realize that cosmetologist and nail technicians should possess different license types.

  • CHECK THAT SINGLE-USE ITEMS ARE USED AS INDICATED

Paper nail files, orangewood sticks, pumice stones, and foam flip-flops should only be used once.

  • METAL AND PLASTIC TOOLS SHOULD BE SANITIZED BEFORE USE

Clients are advised to check whether the tools that will be used on their hands and feet are thoroughly sanitized.

Effective Salon Business Model

If you are looking to open a salon with the least amount of risk and highest chance of success.  Booth rentals are key.  One of the ways we found to keep renters longer is to offer commissions on product sales.  To do this it’s important to stock and educated products that people can sell.  Make it easy to sell the product and offer a tiered payout.  Typical work week is 5 days a week.  If your renters could sell one product a day that would translate into 20 sales per month.  Typical rental rates run about $200 per week.  If you offered a bonus for selling 25 products per months to the renters they could push your products and in exchange give them half price rate for the month.  This does two things it makes it easier for them to pay rent.  It increases your product sales even paying out a huge commission.  If you have 20 renters that sell $25 products each even if your profit is only $20 per item after commissions at the end of the month that is an extra $10,000 in profit.  Best of all you make sure to also collect rents.  If you have 20 stations all rented for the month that is $16,000 month in revenue.  Do the math can you make a net profit after expenses with $26,000 in revenue. If rents and over head cost you $6,000 per month that’s 20k month or almost a quarter million per year.  This should fit into a 2,000 square foot salon.  Average national rent would be about $4,000.  Add in utilities, taxes, accounting ect and it’s possible to keep expenses at about $6,000 month. 20 renters isn’t such an impossible number if you have the right location. Of course other types of operations such as Medical Spas have larger upside but there is a lot more risk and overhead.

Tips For Opening A Successful Salon

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Hair salons and day spa businesses tend to be immune to fluctuations in the economy. One reason this holds true in this business is because the business is built around a clientele that returns frequently. It is important to make sure that customers become repeat clients if you want your business to thrive. When you consider any of our tips be sure to think of them in terms of how it will help turning clients into repeat customers. Our advice would be to prioritize these tips in ranking order in how they will help build repeat business.

The day spa industry has typically been immune to economic factors. In the year 2005, there was an average increase of 11% in the revenue in the salon industry dating back to 2002. Success in opening up a hair salon or day spa is not impossible. This type of business offers a wide range of services that people always look for. In addition, the things that people do avail in salons and spas are those that cannot be simply done at home. In addition, paying for a salon service seems to be less expensive than allocating money for things that are more pricy like new cars and appliances.
Surveys about the income that may be earned from salon businesses showed that salon owners do on average earn a nice profit from their business and if these owners are excessively industrious and hardworking, it’s not impossible earn six figures.

For people who are thinking of opening up a hair salon or day spa, they can opt to try three options. They may choose to franchise a known salon, buy an established salon or open a new one from scratch. Aside from this, some may suggest booth rental where a salon is owned by person who acts as some kind of landlord to other stylist who rent spaces or booths on the salon. Typically the most profitable business model is to have employees working on commission including the opportunity to earn bonuses by selling products. This type of business model while being more profitable does have a much higher failure rate.

FACTORS TO BE CONSIDERED WHEN OPENING UP A SALON

But before opening up a salon, a prospective owner must consider several factors. Neglecting to check on these aspects of the salon business may prove fatal to the business in hand.

OPERATING HOURS

The first one is the operating hours. An owner must have a clear idea of how long the salon will be open to the customers. Nowadays, most salons are open throughout the week. During special occasions, extended operations hours may be considered. Such types of schedules are pre-empted by the business of the people during the weekdays that’s why the time for relaxation and pampering themselves are commonly achieved during the weekends. Aside from taking note of the work hours of the people, salon owners must consider the possibility of setting up appointments and adjusting operating hours for some clients.

PRICE RANGE

The next factor to be considered is the price range for the services offered by the salon. The prices must be properly appropriated in that they may not seem too high or too cheap. A very high price may limit the number of customers who will avail them while a very cheap service may not generate enough profit for the business. It is advised to survey the status quo of the people living within the area where the salon is located to gauge the people’s capability in availing salon services. In addition, the costs needed for the equipment and supplies, as well as the staff and personnel’s salary must be taken into account when computing for the prices of the services that will be offered. Taxes and other additional expenses should also be anticipated and thus, money must be constantly in reserve. Lastly, for setting up the prices of the services rendered in a salon, the overall profit should amount to a number that can not only cover the expenses and emergency financial problems but also the salaries not only of the employees but also of the owner.

SERVICES OFFERED

Various types of salon offer a wide range of services. When opening one, the services that will be offered should highly be considered. For hair salons, these services may include hair styling, hair coloring, hair and scalp treatments, perms, hair straightening/curling and a lot more. In some, nail services may also be offered ranging from manicure, pedicure, nail tipping, nail treatments and hand and foot massage.

For spa services, additional services has elongated the list that the older ones can offer. These services are generally classified as skin and body care, hair removal and makeup. Skin and body care services comprise various body beautifying practices such as facial and body exfoliation, massage, hydrotherapy treatments, and tanning services. Hair removal services focuses on various parts of the body like the face, legs, arms back and underarms while makeup services may enlist application of cosmetics, eyelash and eyebrow modification and ear piercing.

In deciding the services that will be offered in hair salon or day spa, the cost that these services will entail should be considered. The owner must weigh if the income that will be generated by these offers can greatly contribute to the total earnings of the business. Also think about if the equipment that is required for the services. Rooms or spaces must be adequately provided for these services to avoid encountering problems with regards to their implementation.

HIRING THE RIGHT PEOPLE

A salon owner cannot do all the work in his business. Maintenance and doing the services is one thing while managing the business and doing administrative duties is another. As such, the owner must hire the right people to do the varying task that come when running a salon business. Hire professional stylists and cosmetologist for example, for services that require the skills of such kind of people. For administrative duties, hire someone with enough experience or if a newbie, has all the qualities that can be found in a good manager. Accountants should be consulted for financial issues like income taxes and expenses while consultants apt for marketing the business must also be kept in mind.

MARKETING STRATEGIES

In order for a salon to be successful, proper marketing strategies must be generated and put into action. Some of the most common promotional strategies for salons are offering discounts, holding special events, and conjuring up catchy jingles or tag lines that may pique the interest of the old as well as potential customers.

Before doing or employing any marketing strategy, the economic status of the population must be surveyed. The owner must see if the people are able to avail the services that will be offered by his business. When this issue is settled, the owner can now focus on how he or she can properly promote his or her business to people.

Technology will play a very crucial role in promoting a business. It is best to create a website for the salon. Such website should contain pertinent information that the customers will find useful. It should also be quite interactive to let customers do something on the website like setting up appointments, posting commentaries and making inquiries.

When making a website for the business, the appearance must be something that must be appealing to the eyes of prospective customers. Eye-catching pictures and images of what the customers can attain when they go to the salon must be included in the website. It will be also totally helpful if brief and clear descriptions are provided for the services offered as well as their prices. The website must also be constantly updated for the benefit of the customers.

LOCATION OF THE SALON

Where the salon will be erected is a very important factor that must be given thorough consideration. The area where the salon will be built should be covered with enough light and safe. It must also be accessible to a lot of people and can easily catch attention. Moreover, it would be very good if there are other shops in the surrounding area to attract potential customers that also frequent these shops.

Hair salons and day spas can be situated in places like shopping malls, buildings and the like. In most cases, they can found as stand-alone properties outside and nearby malls because renting spaced inside malls can be quite expensive for some salon owners.

In choosing a location, there should be enough space to accommodate the customers and the different areas for the services that will be offers. Consulting a professional with regards to the layout of the building can provide insight on how the salon must be built. Ventilators and equipment must be properly installed and water pipelines and electrical lines must be working properly.

RESOURCES

The most important resource when opening a salon is having enough cash on hand for the business to build. Resources must include those things that can give the prospective salon owner precise and accurate information regarding the industry that he or she will be venturing into. Nowadays, almost everything can be found on the internet so it will not be very hard to acquire information that are related to establishing a salon business. But aside from the internet, the right people must be considered and their opinions heeded if those sound sensible and may seem to help in properly achieving the desired business potential hair salon and day spa owners want.

With the things mentioned above, it can be concluded that starting a business is not easy even though condition seem favorable. Establishing a hair salon and day spa is no exception. Careful planning must be done and a lot of time must be allotted in preparation for such undertaking. The person planning to build a salon must at all times consider asking for help and the opinion of other people. Thorough research must also be conducted to gain adequate knowledge about the nature of the business and to accumulate pertinent details that are important to start the business. And lastly, it must be kept in mind that even though hair salons and day spas had been relatively successful despite the downfall of the economy, the success of any kind of business still lies in the proper way of managing and running it.

We also like to look at the mental aspects of the stress and strain of starting a business.  Take a look at self help books and tools to keep a balanced mental wellness.

Hair Industry Trends

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One of the biggest new trends this year in the hair salon industry is organic hair color.  Big name brands have left consumers distrustful.  A great way to combat that distrust is go organic especially in the boutique environment.  Organic gives an option that people associate with being natural and better for you.  According to JP Morgan Chase analysis the industry contracted 2% each of the last three years.  The fastest growth is in organic offerings.  Clients concerned with information on the internet about exposure to specific products causing cancer makes organic an easy sell at premium prices.  Not only are consumers expecting organic product offerings but they are willing to pay a premium for the option. Environmentally friendly social responsibility is the way to go for hair salons looking for growth in the coming year.

Beauty Industry

Growth in the beauty industry has been fuels over the last year by cosmetics and skin care.  Lotions and Bath Oils have proven to have seen accelerated growth.  One standout is Lush which focuses on the idea to go green and give back with products like sea salts or bath bombs.  Things like body treatments, bubble bath, hair care and facial care have shown huge growth.  High quality and organic lines have particularly shown growth and increased consumer demand over the last year.

All most 20% of salons have gone to the booth renting business model.  Retail sales drive profits.  The average retail ticket this year is just under $20 per transaction. Retail sales average from 20% to 30% in the more successful salons.    Client visits dropped from an average of 4 times a year last year to 3 times this year. A salon must be in the 15% to 20% average to be profitable.  Check out Salon Today for more industry data.