A developing trend in The UK and Europe for Thousands of hairdressers and Barbers is to rent a chair in their salon.
As a salon owner should you take the rent-a-chair route?
The Hairdressing Federation has highlighted this as a very common occurrence faced by all hairdressing salons from start-ups to established businesses in Ireland.
Benefits of chair rental
At a quick glance, the clear financial savings and freedom from employment law restrictions seem enticing for both for you as owner and the freelancer. But as with most things there is no one easy answer. There are pros and cons to both business approaches.
It’s your hair salon yet the chair renter is running their own business within it. This may lead to a perceived dilution of your role as Salon proprietor.
What’s more, if you plump for the chair or booth rental business model, it can be very hard to revert to an employee-only hair salon at a later date if you discover you’ve made an expensive mistake. However, there are also advantages !
What about “The One Stop Shop”
Here’s a possible scenario:
It’s a typical Saturday. 11AM Appointment. Hairdresser Appointment for Mother. Make Up artist appointment for Sister. Nail Bar Appointment for Daughter. All done under the 1 roof.
No multi locations leading to possible parking difficulties and undue stress for clients.
In this blog post we will highlight the following issues:
First, let’s look at the different ways to set up a hairdresser’s rent-a-chair or booth renting arrangement:
What’s the appropriate rent for your salon chair or booth rental?
These are three main methods:
It can cause resentment as the freelancer can feel you, the salon owner, are having your cake and eating it.
Why choose the rent-a-chair business model for your salon?
You can:
A rent-a-chair hairdresser can:
The answer to this potential business nightmare?
Have a Service Contract between the two of you setting out the rules of the game. This way you’re both protected and know where you stand.
Rent-a-chair service contracts for hairdressers
Thousands of hairdressers manage to make rent-a-chair work for them successfully. You just need to be aware of the pitfalls and take legal advice before, not after, taking this route. Don’t put your business in jeopardy.
Always go to your lawyer or get in touch with a body like the NHF (UK salons only) who offer proven contracts specifically for rent-a-chair. Yes, it will cost money to consult a lawyer, but not as much money, heartache and hassle as sorting the mess out if it all ends in tears.
Is the hair stylist / Nail Bar Technician/ Make up artist really self-employed?
Look at the following Link to Irish Revenue clearly setting out the rules whether a person is employed or self employed.
YOU may be surprised ! Be really careful. If you are satisfied that this is a self employment status you really need to look at all the scernarios, that may arise, both good and bad. You need to then incorporate these into a service contract between yourself and the person renting the Chair.
Then you should contact your solicitor to draw up a service contract. You might consider some of the following points
Some potential drawbacks for salon owners
How to reduce the risks of rent-a-chair
If you decide to go down the hairdresser chair or booth rental route here are some sensible business precautions you can take to reduce your exposure:
If you’re a start-up salon with a tight budget and a small client base but don’t want the risk of employing someone, then renting a chair out is it’s a great way of getting a passive income for your hair salon and getting a contribution to your overheads. If you want to introduce a new service, like hair extensions, but can’t afford to employ a specialist then a freelancer may be an entry route.
The flip side is that if they are very successful then their earnings can be substantial and this could have been your profit if you’d taken the employee route.
WHAT CAN TAXRETURNSIRELAND.IE DO FOR YOU ?
We will discuss in detail the Pro’s & Con’s of your situation. We will advise you on the Optimal working relationship and assist you in setting up the most appropriate internal and financial controls. We will take control of your Accounting and Taxation requirements, allowing you to concentrate on developing your business.
Amongst the services we offer are
TAXRETURNSIRELAND.IE will help your business to grow by allowing you to concentrate on business development.
For any Queries relating Accounting or Taxation contact Info@taxreturnsireland.ie
The contents of this article are not intended to amount to advice and you should not rely on any of the contents of this article. Professional advice should be obtained before taking or refraining from taking any action as a result of the above contents. William Halpin & Co. disclaim all liability and responsibility arising from any reliance placed on any of the contents of this article.
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