Whether you’re a salon owner or stylist, salon booth rental offers a unique way to bring in extra income.
In this post, I have summarised the most important parts of the salon booth rental business.
I have also added valuable tips on how to automate your booth rental system. This can help you decide whether you should charge a monthly fee or take a commission. This tip alone could save you thousands of dollars.
This guide includes the following:
What is Salon Booth Rental?
5 Ways a Salon Owner can Benefit from a Booth Rental System
5 Benefits for Stylists of the Salon Booth Rental Model
How Can I Make Money With My Booth Rentals?
Automate Your Booth Rental Program with a Salon POS
Conclusion – Now is a Great Time to Try Booth Rental
What is Salon Booth Rental?
Salon booth rental is a business model that involves two parties directly benefiting from the arrangement. A stylist will lease salon space to provide hair services, and the salon owner will receive income from the temporary tenant. The stylist pays a fixed recurring fee and/or a percentage of their sales.
This arrangement benefits both parties because it can reduce costs and add revenue for both the stylist and the owner.
The agreement specifies the terms of the rental arrangement, such as how much the salon vendor will pay per month, how long they will rent the space for, and what services they are allowed to provide from that location. The agreement should also include a clause specifying what will happen if either party decides to terminate the contract early.
5 Ways a Salon Owner can Benefit from a Booth Rental System
If you’re a salon owner, renting chairs to stylists can be a great source of steady income. Here are some benefits of this business model.
- The owner can start making money immediately
- There are no or low start-up costs involved
- No benefits to pay like health insurance plans, 401 programs, or paid vacation days
- Provides easy-to-predict passive income each month
- It’s straightforward to set up with the right salon software
5 Ways Stylists can Benefit from the Salon Booth Rental Model
So which option is better for you: rent a booth, work as an employee, or start your own salon? There’s no correct answer. All options have advantages and disadvantages. To help you make the best decision, here are some benefits of renting a booth.
- It’s a low-cost way to start your own business without setting up your own expensive location
- Only pay a fixed monthly fee or a small percentage of your earnings and keep the rest
- Be your own boss and get paid more (or at least have the possibility to do so)
- Set your own schedule and have your own clients
- No need to hire employees
How Can I Make Money With My Booth Rentals?
Booth rental businesses can make money in several ways. The most common way is through monthly fees charged to booth stylists. Another option is to charge a set amount per hour. This can work well for salons where stylists work long hours, but not for salons that only operate during specific times. A third option is to charge a percentage of each stylist’s commission.
When renting out a booth at a salon, do you charge a monthly fee or take a commission?
Both options can be lucrative, but choosing which will suit your business model best depends on your accounting habits and business goals. When renting, you’re more likely to live comfortably with an even amount of income. However, if you opt for commission, you may end up making much more money if your renters are talented and bring in an ample income.
So far, a large majority of salon owners have opted for a fixed monthly fee. This is partly because the commission or percentage model requires more administration and accounting.
However, good salon software can automate commission sales.
Deciding on the Rental Rate for a Salon Booth
Renting out booth space in a salon opens up a whole new source of revenue. You need to decide on a profitable rental price point yet low enough to attract stylists who want to work with you.
If you can’t find enough stylists, consider offering more amenities or updating your location, so it appeals to more customers. If you have too many stylists interested in booth rental, remember that you can always raise the rates.
Automate Your Booth Rental Program with Salon POS Software
Booth rent collection is a time-consuming and tedious task for salon owners. But Salon POS software can automate it easily. With this feature, booth owners automatically charge their rent and fees to booth renters. There’s no need to use cash or checks, and the software makes the process easy to track.
Here are some examples of use cases to look for:
Make onboarding a breeze and welcome your new salon booth renters with a prompt text or email. Send them their rental agreement and payment information, and they can enter it directly. With the payment information stored automatically in their employee profiles, stylists and other new booth hires can access it instantly.
Easily create legally binding documents. Your renters are entering agreements with you. How do you make sure they sign the right ones? Create legally-binding contracts for salon booth rental using forms. In this way, the renter’s agreement is accessible in a transparent and trustworthy manner.
Collect rent automatically. With the automation of rent, your business will never have to worry about chasing stylists, cosmetologists, or others for checks or cash again. Eliminating confusion over due dates is one less hassle on your plate.
Deduct commission from rent. Make it easier for your stylist by automatically deducting their product sales commission from their rent. This will save you time during tax season and stop confusing your independent contractors with 1099 forms. It’s a simple switch that saves salons time, money, and paper.
Rental payment information and history. The stylist can easily see their payment information and update anything different. They can also find the booth rental agreements in the employee profile.
Mangomint makes it easy for salon owners to manage their booth renters with their seamless payment integration. With Mangomint Pay, salon owners can create different payment accounts for each service provider, ensuring all service sales are automatically routed to the appropriate bank accounts.
By using Mangomint Pay, booth renters can easily manage their own payments and track their earnings, giving them more control over their income. This not only benefits them but also benefits salon owners by reducing the administrative burden of managing multiple payment accounts.
Additionally, Mangomint allows you to create custom forms for your booth renters to sign. You can create these forms in Mangomint and have your booth renters sign them electronically.
Mangomint also allows you to track your booth renters’ performance by providing detailed reports on their sales and services. You can use these reports to see if your booth renters are bringing in their own clients or not.
Conclusion – Now is a Great Time to Try Booth Rental
Booth rental can generate more income for salon owners by allowing them to get paid for areas that might otherwise go unused. Still, it can also enable stylists to start their own businesses and work without the overhead costs of owning a physical space.
Automation is the key to running a successful salon business, and the old way of collecting rent with cash or checks is time-consuming and challenging to keep track of. But it’s easy with a good salon POS with features for managing a booth rental program.
