So, you’re a new salon owner wondering whether to rent out booths to increase revenue. Or maybe you’re already renting out booths in your salon and want to maximize profits? Either way, you’ve come to the right place.
Booth rental can be an excellent way to make sure your salon’s always bustling without all of the responsibility of full-time staff management or marketing.
But once you move to a rental booth business model, it can be a challenge to consistently fill your booths, decide whether to charge monthly or by commission, and master maximizing profits while maintaining a happy, thriving salon.
That’s why in this post, we:
- Summarize what the booth rental business is
- Consider how much booth rentals cost
- Discuss the best ways to find chair rental tenants
- Compare the pros and cons of booth rental tenants vs. full-time salon employees
- Look at whether charging a monthly rental fee or by commission is best
- Share three ways owners can maximize profits while running a booth rental salon
Let’s get started.
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What is a booth rental salon?
A booth rental salon is a salon (such as a beauty, nail, or hair salon) where the owner rents out individual booths. For example, renting a chair and a mirror to an individual stylist in a hair salon.
This is in contrast to a salon with full-time employees on its own payroll, or stylists who rent an entire studio space rather than a single booth.
Booth renters usually have to sign a contract with the salon owner and stick to terms and conditions when it comes to clients, working hours, and services provided. They’re also normally responsible for bringing in their own business and setting their own rates and schedule, depending on their agreement with the salon owner.
How much does booth rental cost?
When deciding whether booth rental is right for your salon, consider how much money you’ll spend versus how much you could potentially make.
What are the typical costs of running a booth rental salon?
The cost of running a booth rental salon depends on your location and outgoing expenses, as well as what you provide for your renters.
Will you offer booth renters only the necessities, like a chair, a mirror, lighting, heating, a hair washing sink, and water? Or will you offer extras such as free Wi-Fi, tea and coffee or other refreshments, tools, materials, towels, laundry, private treatment rooms, and beyond?
Lots of booth rental salon expenses also come from managing the location itself, like:
- The rent you pay for your entire space, including parking if applicable
- Decor or aesthetic upkeep
- Daily cleaning
- Software for time scheduling and staff leave
- Building maintenance
- Building and/or contents insurance
- Liability insurance (if renters don’t have their own)
- The cost of complying with legal regulations (depending on your state)
- Utility bills The maintenance of essentials like chairs, hair washing equipment, electrical outlets, soap, and toilet paper
Don’t forget about the cost of essentials like computer equipment, software, and Wi-Fi. These costs can add up. But software like Homebase can help you easily manage many of the tasks it takes to run your team and business with free features for scheduling, time clocks, in-app messaging, and more.
All in all, be sure to get crystal clear on how you want to run your salon before deciding how much to charge per booth to ensure you cover costs and make a sustainable income.
How much can a salon owner make?
When renting booths, you can choose between charging a monthly rental fee or charging commission on each job renters bring into your salon.
The amount you should charge for each booth also depends on several different factors, like:
- Location (high-end luxury or affordable and accessible?)
- Foot traffic
- Competition (are renters able to choose from a wide variety of nearby salons?)
- How much you’re providing to your renters (in terms of materials and facilities)
- How in-demand your salon is as a place to work in the community
A recent estimate suggested that the average booth in the US rents for around $400-600 per month, but that price can drop as low as $200 in smaller, less-busy areas — or rise to thousands in luxury, high-traffic areas like Manhattan.
How much you should charge per booth also depends on how many you have in your salon and how many hours each renter will work. For example, could you rent the same booth out to several part-time, independent stylists?
Where can I find booth rental tenants?
Finding booth rental tenants is similar to finding employees, except you’re offering people space where they can work rather than full-time employment with your company.
That means you’re likely to find high-quality booth tenants by advertising in the same spaces you might if you were seeking full-time staff.
Just like when hiring employees, make sure each prospective tenant will fit in with your ethos, values, and overall vision for your salon. You should also perform background checks to ensure a safe environment for everyone.
If you’re on the hunt for booth renters, some great places to find tenants include:
Job search websites
Salon professionals looking for more work, or a place to work, often look for opportunities on job search sites like ZipRecruiter, Monster, or Indeed. Someone who’s open to a full-time role may also welcome the chance to rent a booth.
Classifieds like Craigslist (or even Facebook Marketplace or similar) can be great places to post the availability of your booth rental salon, as well as your rates and terms.
Posting on Instagram, Facebook, or even TikTok can be an effective way to spread the word about your salon and any booth openings you have. You can post direct ‘job’ ads, as well as regular content (such as how-tos, top tips, testimonials from existing renters, and behind-the-scenes of your salon) to increase awareness and interest.
Your own website
It makes sense to have a website for your booth rental salon, even if it’s just a few pages explaining your terms and sharing your contact details.
You can send interested people to your website so they can learn more about your business, and you can advertise any booth vacancies there too. You can also make your salon look more appealing by including great photos, positive testimonials from happy clients, and a list of the services you offer.
Word of mouth
Stylists almost always know other stylists, and if you provide a great place to work (using tools like Homebase to boost employee communication and happiness can help), they’ll likely recommend your salon to others.
Happy customers are good sources of positive recommendations too. So, don’t be afraid to ask if they know anyone who’s looking for a chair.
Booth rental vs. full-time employees
Booth rental salons take on tenants rather than hiring full-time employees. This has pros and cons for business owners, depending on your goals.
Pros of booth rental include:
- Estimating your income based on your number of contracted tenants and rental rate, not potential clients.
- Still getting paid even if you’re not bringing in any of your own salon work.
- No responsibility for marketing or finding salon work for staff.
- No responsibility for regular payroll or extra costs of full-time employees.
Cons of booth rental vs. full-time employees include:
- Tenants are essentially their own bosses, so you have little say over when or how often they work.
- Tenants may come and go, making it more difficult to build community, a solid team, or a brand.
- You’re responsible for the majority of salon upkeep even though your tenants use the space.
- If you charge a flat monthly rate, you don’t make more money when tenants do.
- You may need to continually recruit new tenants if you have high turnover, so the cost of hiring continually falls on your shoulders.
Booth rental vs. commission
Deciding whether to charge a flat monthly fee per booth or a commission per tenant client can be a challenge. Here are some pros and cons to help you decide:
Pros of a flat rental fee include:
- Income is fixed based on the number of contracted tenants, not hypothetical clients.
- You still get paid even if tenants don’t bring in any work.
- You still get paid even if you don’t do any salon marketing or services.
- You can easily predict income based on the number of chairs or tenants you have.
- It’s possible to scale your income if/when you’re able to increase your fee per chair.
Cons of a flat fee vs. commission include:
- Income stays the same even if your tenants have a great income month.
- You may hit a ceiling on your income due to a fixed number of booths.
How can salon owners maximize their profits?
The above limitations don’t mean that salon owners can’t maximize their profits, save on excess costs, and scale their income while operating a thriving, happy, and profitable rental booth salon.
Try scheduling software
While booth rental tenants are usually responsible for their own schedules, you can still create a more efficient team environment by using tools like Homebase’s scheduling software.
Scheduling provides a dynamic, always up-to-date calendar, so you’ll always know who’s in which booth and when. That means getting maximum profit out of each chair without losing money on needless time gaps (or wasting your own time coordinating everything on paper).
Scheduling tools can also help tenants coordinate with each other, avoid double booking, claim empty spots (for extra commission), and let you know when they plan to take time off. Homebase works on smartphones too, so you can communicate with tenants anytime, anywhere.
With Homebase, you can also link schedules to income forecasts so you can track booth occupancy and revenue in one place, and gain a greater understanding of how much each chair is really making.
Improve team communication and culture
Operating a booth rental salon can make it more difficult to build a solid community as everyone’s technically their own boss, and may come and go as they please. That’s where using an app like Homebase can help.
Having a single platform for team communication brings your tenants together under one roof (digitally and literally), allows for easy messaging, builds rapport and trust, lets people get in touch quickly in case of illness or emergencies, and ensures everyone feels heard and included.
Fostering a culture of communication and loyalty for your tenants also makes them more likely to respect, work hard for, and stay at your salon — saving you the costs of hiring, absence, and turnover over time.
Optimize HR services
Salon booth rental operators have fewer HR responsibilities because they have tenants rather than full-time employees. But managing any necessary HR details is a must for responsible ownership, especially when you rely on real-life humans for your business!
Using an expert HR tool like Homebase can help you take care of necessary evil admin like keeping tenant data, tracking certifications, storing insurance policies, signing booth rental agreements, bookkeeping, complying with labor laws, and storing emergency contact details.
You can also use Homebase to send welcome packets for new tenants, helping them feel like a valued part of your wider team and reducing repetitive questions.
Managing and maximizing profits at your booth rental salon: The bottom line
Ultimately, managing a booth rental salon could be the best option for you if you want to operate a salon without the responsibilities of managing your own full-time employees.
Salon tenants have more flexibility, set their own schedules, drum up their own business, and usually bring their own tools and materials. That can save you some serious money and time.
But even without employees, you will still have the costs and responsibilities of salon upkeep, managing tenants, and finding quality stylists to fill your spots—not to mention reducing turnover by making your salon a great place to work.
Luckily, all-in-one tools like Homebase are designed to manage exactly that, helping you get everything done and maximizing profit along the way.
Give your team the tools they deserve.
Homebase helps you create a great place to work.
Booth rental salon FAQs
What are the benefits of booth renting?
Booth renting means you can operate a busy salon without the responsibility of hiring full-time staff. Tenants often provide their own clients, set their own appointments and rates, and bring their own products and tools, saving you time and money. Your income may be more predictable as you can charge a flat rental fee per chair and aren’t dependent on variable bookings.
How do booth tenants get clients?
Salon booth tenants are their own bosses, and are usually responsible for bringing in their own clients. They might do so with word of mouth referrals, online advertisements, social media platforms, or their own websites. Word of mouth is often how new stylists get started and build customer loyalty.
How do I attract booth renters to my salon business?
Attracting salon booth renters is very similar to attracting full-time staff. The process might include using classifieds like Craigslist, job search sites, social network ads or groups, your own website, or sharing content on social media. Word of mouth can also be very powerful, particularly between tenants and their network — especially if you make your salon a great place to work.
Source by joinhomebase.com