For the stylist, working in a booth rental salon is really a lifestyle choice. They can come and go as they please, charge what they want to, work when they want and dress how they want. The downsides are they never know whom they will be working next to and what their professional standards will be, they have to buy their own products, and they are responsible for their own training, marketing, taxes and benefits.
So as the owner, do you want the challenge, but also the upside of building a great company and the profitability that comes with it? Or do you want the relative safety of the landlord model and just work about occupancy?
As long as you understand the model you are living in, there’s opportunity for success in both situations. But as we coach owners through Strictly Business, we find the ones who are really beating their heads against the wall are the owners who are trying to run their rental salon as if it is an employment-based salons. They are trying to manage the tenants as if they are employees, but they’re not—they are independent.
When owners come to us wanting to transition their rental salon into a commission-based model, we tell them they really have to prepare to start over. You may retain a few stylists, but chances are many will abandon you. It’s a really tough task, so the pain of change has to be less than the pain of staying the same. But it is possible, and it all starts with setting up the proper structure. You have to determine the successful processes you will need to hire, train and educate chair-ready hairdressers. Then you have to create the type of customer experience you want to have, and you have to set up systems for retail line selection, retail sales, marketing and promotions, customer followup and even social media. And, quite honestly, it’s going to take some money. Let’s take a look at one owner’s story and how he made that transition.
Luke and Vince Huffstutter, owners of Anastasia Salon in Portland, Oregon. Luke Huffstutter, Anastasia Salon, Portland Oregon
You might say Luke Huffstutter has beauty in his blood. His great grandmother was a stylist; his grandfather launched a distributorship; and his father continued to grow that distributorship before selling it to Maly’s. When Luke graduated from college in 2006, he and his father Vince bought an established, 18-chair booth rental salon, but it wasn’t the success they believed it would be. “In the first year, we did $128,000 in sales, spent about $140,000 and lost 8 renters,” says Luke.