Read any beauty business blog and you’ll see that there is a reoccurring theme of confusion around renters and what they can be required to do. Often the lines between employee and renter are blurred making for a difficult and often unprofitable situation. Salon & Savvy gave an overview in the Who Am I? post. To recap, a renter is a tenant in another person’s property – think of it just like renting an apartment or a house. You live there, you keep your stuff there, you sign a lease, but you don’t own the place you live in. It’s the same with a booth or a chair; you use it, you don’t own it. Whether it’s a stall, a chair, a room or a booth – they’re all treated the same way. It’s just borrowing space to conduct your business. That’s the other important part about a renter, they do not work for the salon they work in. Just the same way you don’t work for the landlord that owns your apartment complex.
A Renter Does:
- Collect money from their clients directly. They cannot and should not use a front desk or receptionist for this task.
- Need a lease to define the terms of their space. The lease should include access (keys? keypad?), terms (dates), building requirements (can or cannot make adjustments to space), etc.
- Have to make their own bookings.
- Need to purchase their own products, supplies, and equipment.
- Have to clean their own space.
- Have to pay their own taxes as a business owner, not an employee.
A Renter Does Not:
- Have to follow a dress code.
- Participate in salon promotions, activities, meetings or discounts.
- Pay the salon for more than their rent. Unless otherwise noted in the lease, all the money you make is yours.
- Get a 1099 or W-2 Tax form from the salon.
Bottom line, you are merely paying a salon owner to operate your own business in the space that you’ve agreed on – nothing more. An owner cannot require you to do more than that. But, on the flip side, you are running your own business and the salon doesn’t give discounts for sick or vacation time. Your rent will be due whether there are clients in your chair or not so plan accordingly.