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Salon Booth Rental: A Business Guide for Owners and Stylists

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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.

salon booth guide

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 is beneficial for 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 from 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 stylists who use booths. 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 it comes to 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, with the new features available in the salon software Vagaro to automate commission sales, I think more salon owners could benefit from switching over to the potentially much more profitable commission system.

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.

Vagaro salon software

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 charge their rent and fees to booth renters automatically. There’s no need to use cash or checks, and the process is easy to track in the software.

In this case, we are using Vagaro, which to the best of our knowledge, is the only salon software system with all the features mentioned below.

5 Ways to Simplify Your Booth Rental Business

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 Vagaro 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 will be able to easily see their payment information and update anything that may be different. They can also find the booth rental agreements in the employee profile.

Conclusion – Now is a Great Time to Try Booth Rental

Booth rental can bring in 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 business 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 like Vagaro, which has features specifically tailored for managing a booth rental program. Also, see my full review of Vagaro.

I think now is the time for the salon owners who haven’t yet added a booth rental system to their business to try it out.

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