Empty chairs in a hair salon

The advantages and disadvantages of chair hire in a salon

21 August 2020 

A common practice in the haircutting industry is to hire out a chair in the salon to a freelance hairdresser.

Hiring out a chair is exactly what it sounds like. You will hire your chair out to a freelance hairdresser who will cut hair for your customers but take some income for themselves. How the freelance hairdresser makes an income can differ depending on the agreement that you have with them.

Carry on reading to see how you can make renting out a chair at your salon work for your business.

The first thing that you should do when agreeing to rent out a chair is to agree on how the freelancer coming into your business will pay for their chair. What options do you have?

Set rental fee

You could have a set rental fee on your chair that your freelancer will pay for in advance, and then they take all of the income for the work that they do. You will need to work out what a reasonable rent figure would be for the freelancer, whilst also allowing them to make enough income to make renting the chair worthwhile.

This will depend on the type of business that you own. For example, if you are a hairdressing salon, you could charge £100 for a freelancer to rent your chair, which they could easily make back over the course of a day.

However, this type of agreement might not work for freelancers if there is a quiet spell, as they have paid for the chair, but aren’t getting any customers and therefore not making any income.

Percentage agreement

In a percentage agreement, income will be split between the salon and the freelancer at an agreed percentage. You should have a written contract which outlines this rate to avoid any disputes in the future.

A 50/50 split seems like a fair option, but remember that a salon could ask for a higher percentage, as they are providing the customers, equipment, electricity and other utilities. A salon can expect to take anywhere from 40% to 60% depending on what they are looking for from the arrangement.

Mixture of the two

A salon could combine the two if they wanted. They could charge a lower rate for the chair hire so that a freelancer doesn’t have a high upfront cost, but the two parties can benefit from splitting income. This could work well if the freelancer has a good reputation in the trade and can potentially bring new customers to your salon.

  • Passive income

By hiring out a chair, you will essentially be making passive income, as the freelancer will be doing the work for you, whilst you still receive a portion of an income.

  • Employment law pros

As a freelancer isn’t one of your employees, you won’t have to treat them the same way in the eyes of the law.

Contractor workers won’t receive holiday pay, maternity pay or sick pay and won’t have the same legal rights as an employee of the business.

  • Letting them get on with it

It is likely that a freelancer in your business will already be trained, so you won’t have to give them much guidance whilst they’re working.

You can simply welcome them to your salon every day and let them get on with keeping your customers happy.

  • Motivated worker

If your freelancer has paid a rental fee, you know they will be working hard to ensure that they are making money from their investment.

Similarly, with a percentage agreement, they know they have to work well to get a good percentage from customers. Either way, you can have a strongly motivated freelancer.

  • Reputational damage

A freelancer will potentially be seen like as employee at your business, so if they make a mistake, your customers may put the blame on your business.

  • Employment law cons

Especially with the introduction of IR35, you may need to be careful about the relationship that you have with your freelancer.

If your freelancer is found to be working under IR35, you could face additional admin work for PAYE and National Insurance.

  • Losing customers to the freelancer

If your customers like the way that your freelancer has cut their hair, they might want to keep them as a regular.

Once your freelancer has finished working for you, there is nothing to stop them from the continuing to serve your customers elsewhere.

  • Freelancers can work on their own terms

You may have a contract with a freelancer, but little management power and almost no disciplinary power.

If a freelancer doesn’t turn up, leaves whenever they want or poaches customers or staff, you could end the contract, but your business has already suffered.

  • Regular work

Whilst hairdressers rarely have quiet periods, as a freelancer, work may be sporadic. Hiring a chair in a salon can increase the amount of time you make money from cutting hair.

There is a risk that the salon that you hire from could be quiet, but if you know the salon is popular, you are increasing your chances of constant work.

  • Flexibility

Hiring a chair in a salon can be something that you do once or twice a week, especially if there are key times that the salon you rent from has a steady flow of customers.

This means that you can carry on working for yourself during the days that you aren’t hiring the chair.

  • Upfront cost

If you hire a chair at a set rate, you already have an upfront cost which you will need to make sure you can afford.

You also run the risk of not making all of your money back on the hire cost of the chair, so do your research to find out if the business you’re planning on working in is regularly busy.

  • Not building your own business

The time you spend in a hired chair could be making you money, but it is also taking time away from your own hairdressing business.

Insurance can be difficult to arrange for your business, especially if you're not sure what you're looking for. The huge range of ever-changing treatments also makes it difficult to know what kind of hair and beauty insurance you need for your business, which is why using an insurance broker, like Premierline is so beneficial.

At Premierline, our experts will assess your business' needs and arrange a bespoke a hairdressers insurance package that covers your business whether you own a hair salon, barber shop or are a freelance hairdresser. Get in touch to speak with one of our insurance advisors who work with some of the UK's most well-known insurance providers to find you the right cover for the right price.

It is important to make sure that you have the right insurance in place to protect the business that you have built. Every business is different and has its own business insurance needs, which is why we work with some of the UK’s most well-known insurers to ensure that you are getting the right insurance cover for your business.
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