Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host, Britt Seva, and this week’s episode is very much inspired by you all, the listeners. This comes straight out of my ratings and reviews on iTunes. You can read it verbatim there.
If you ever request for the podcast, always remember you can leave me a rating or review on iTunes and in the comments, let me know what you want to hear about and I will do my best to serve it up to you.
This week’s question comes from a salon owner who has a booth rental salon and is wondering if it is her responsibility to provide clients to her booth renters, and if so, should she get a finder’s fee for that? How do the details work?
But the plot thickens. There’s a lot of layers to this and I want to dig into it because I think as the landscape of our industry changes, it’s important to understand what stylists are looking for in a salon.
Years and years ago, the only ways to work as a stylist were booth rental. Well, primarily booth rental for a long time. Then it was booth rental or employee-based. In-home salons had a huge resurgence and then studio suites came on the scene. Gosh, it’s been about 20 years now, maybe even a little bit longer, but we saw a huge studio suites boom in the last decade, right?
Now, there’s all these additional ways to work. And so as the landscape of the industry has changed, we have to understand that the expectation of stylists has changed too. The legalities of what it looks like to work as a stylist have also changed, really thick plot on this one, so I want to dig into all of it.
This rating/review question comes from Golden Retriever 760. Golden Retriever, thank you so much for submitting this question. It goes like this:
“I’ve been listening to your podcast for a few years now and I’ve learned so much from you. I was just at the Vagaro conference that you spoke at and you were amazing.” She saw me at Vagaro Iconic. Thank you for being in the room. I was honored to be there.
She says, “I know sometimes you use these questions for podcasts, so I thought I would ask you about some problems I’m having in hopes that you can help.
“I own a booth rental beauty studio. Many of the stylists used to be employees, but we made the switch to booth rent a few years ago. I have three people on my team out of the 13 that are fully booked.” Three out of 13. What does that end up being? Like 20% of her staff is fully booked and 80% are not.
“The other stylists are partially booked or have only a few clients per week on their schedule,” which I’m not there on the day to day, so are these booth renters only renting two days a week or—I don’t know all the logistics. All I can go off of is the information that I have here.
“I’ve noticed they have a hard time retaining their guests.” Now that’s an issue. “I’ve given them the option to be on our online booking Vagaro and I would estimate that 85% of their clients come from online booking or my website.”
So let’s give the benefit of the doubt. Let’s say that this salon owner’s overestimating and just 50% of a stylist’s clients are coming from her website and her online booking link. That is still a lot. She’s estimating that it’s 85%. Whenever I see people throw out statistics, I always try and give a little grain of salt because that’s an emotionally-based number. Even if we’re to deeply underestimate that and she’s building 50% of their clientele, that’s still a lot of clients, right?
“It pains me when stylists get a new booking from my website and my Vagaro link and that client comes back once or twice and then never comes back again. I also struggle with the way clients don’t see the stylists as individual businesses. They see all of these stylists as working under my brand or think that they are my employees. So if a client is unhappy with the stylist, they’re ultimately unhappy with my business and I’ve received complaints where the client expects me to make it right.
“There are benefits of having them use our online booking system. It’s helpful to track data, keep an eye on client retention. And if renters are canceling or moving clients around a lot. It’s a benefit from a renter perspective. Because in addition to getting an influx of new clients online, they can also book clients on members’ schedules if they’re out of town.” Meaning that they can, if Susie’s out of town, she can move her clients onto James’s schedule or whatever.
“Am I being too generous by letting stylists be on my booking site? Does it make it confusing from a client perspective when booking? They think they’re booking with my brand, but it’s really a stylist just renting a space from my salon. Do you think it would be reasonable to charge a referral fee for every first-time client that I book for a renter?
“I’ve considered doing this or charging a higher monthly fee to be on my Vagaro system. I know our culture and atmosphere/environment is strong, but the online booking are also a major draw for them. We are technically a booth rent salon, but kind of acting like a commission salon as I’m doing a lot of the handholding and giving a lot of guidance.
“I’m happy to help them grow, but I also don’t feel like I’m being compensated properly for the amount of handholding I’m doing and clients I’m giving to them.”
Whoa, first of all, such a great question and can I tell you, I love when a question has so much beautiful, rich content and context because it really helps to be able to have a more full picture and to give better advice. Thank you for giving me the full scope and for writing in and letting me dig in.
There is so much to unpack here, so much to unpack, and if you’re listening to this and you are a booth rental salon owner or you’re a booth renter, you probably are like, “I want to chime in on this one,” because there’s so many things that came up and there’s so many layers and this is just such a great example of how complicated our industry is.
Let’s take this bit by bit piece by piece. I want to talk about the client perspective from a second. I actually want to start there.
When you say—this was actually so beautiful, I love the way you said it. You were saying like, “Clients are assuming that these stylists are a part of my business, not independent business owners,” correct. That is exactly how they’re being seen. I’m not roasting you, Golden Retriever 760, but on this podcast, how many times have you all heard me say clients do not care how the stylist gets paid, how their legal structure is, if they’re an employee, if they’re a booth renter?
That is why my marketing funnel concept works. When people reach out to me and they’re like,
“But will Thriving Stylist Method work for me? I’m a commission stylist,” “Will Thriving Stylist Method work for me? I’m independent,” “Will Thriving Stylist Method work for me? I’m in a studio suite,” “Will Thriving Stylist Method work for me? I’m a booth renter,” clients don’t care. Clients don’t care.
When you say it feels that the clients see these booth renters as a part of my business, yes, yes, they do.
Y’all, we have to remember, clients don’t see us the same way we see ourselves. Any stylist you allow to work in your space as a salon owner is representation of you and your brand and business, period. They’re an extension of you.
This is why when you are a salon owner, the goal and objective can’t just be “Find warm bodies to stand behind these styling chairs and pay their rent on time.” This is exactly why this doesn’t work.
Now, let’s take a trip back in time and we’re going to go back to the mid nineties when I got my first perm. Yes. Let’s give that a moment to honor that beautiful moment as it happened. We went to the beauty shop that my mom was going to at the time. I just went to where she was going. It was very clear that everybody there was independent. There was no question. It was very much of the salon culture that all of the stylists who work there were cool with each other to a degree, but it in no way felt like we were a part of a salon team. Everybody felt pretty independent. It was clear to me what was going on.
I think now we have really blurred the lines as an industry and not in a bad way, but now we’re like, “I want to have a salon full of independents where we do have a shared website and I am sending them clients and we are like a team or a family.”
I have some feelings about using that word in the salon, but we say things like that. Like no, we really are still one collective even though we’re independent. And so because we’ve now cross-pollinated and we’ve got these hybrid cultures, it comes with a lot of complexities.
You have a website for your salon as you should. Every single person who works in your building is a representation of you. They simply are. So when they mess up, it is a representation of you. When they mess up, of course the clients are going to come to you looking for a solution. You have allowed that person to rent space in your building. You’ve chosen them. You’ve said this person is authorized to be here doing services.
Now, I know you can say, “Well, they’re an independent. They’re doing it on their own.”
I understand, but in the eyes of a client and in the service world, the client doesn’t see it that way. This is why it goes back to we have to be very mindful about who we have in our space and who we have in our building. It can’t just be so-and-so who’s on their way out and doesn’t really care anymore and they do crummy hair, but at least they pay their rent on time. This is the repercussion of that.
What was interesting is I actually believe you said something, you said, “I know our culture and atmosphere and environment are strong.” Then why are you hiring stylists who are not super motivated? “It seems like they’re having challenges with our clients as far as retention goes.” There are blips that come up, which no stylist is perfect. I make mistakes, you make mistakes, we all make mistakes.
But it sounds like—if you’re expressing to me that you’re having these challenges with their guests who are coming to you looking for solutions, it sounds like you maybe have some of the wrong people in the building.
Now, when people are independent, we can’t force them to be as driven as your three people who are fully booked. We can’t force that. That’s not everybody’s goals or ambition. Some people are happy to do four clients a week. Okay. So be it.
We have an industry where that is fully possible for you. You need to decide what is your vision and mission for your business, right? In my program Thriving Leadership, I talk about that and this is the reason why we talk about brand standards. What is the standard for working in your place and space?
Is it important to you that people retain? If you don’t care if clients are retained or not and you’re like, “You know what, that’s up to them,” then you can’t have any feelings if they’re not retaining them well.
Yes, clients are going to assume anybody who works in your building is a representation and an extension of you. You double down on that when you created a website for your salon, which you should have done and you should put your stylist on that website. You know why? Because stylists today are looking for a salon where that is an option and a feature.
This is where things get tricky. I do believe it is the responsibility of a salon today, whether they be booth rental commission, whatever. (I’m just going to say employee-based rather than saying commission.) Employee-based, independent, booth rental, whatever. I do believe it’s the responsibility of the owner of that business to provide some clients to that stylist. Otherwise why wouldn’t they go to a studio suite? What is the benefit of being in your salon?
Truly, I mean it like what is the perk and benefit of working for you when somebody could work on their own? Usually the greatest benefit that you have in working with a team-based salon is A) great culture, which you say that you have, but then there’s a caveat to that of people are coming and going and nobody’s fully booked and they’re having retention issues.
It’s like, well, how’s that really going?
And two, in addition to that team and that structure, they’re looking to have those clients.
Now, we have to get into the legalities for a minute. I don’t know what state you’re in, but in 22 states, the federal ABC test applies.The ABC test is the legal test that determines if any working person is truly an employee or a contractor.
Now, misclassification is a huge problem in our industry. We all know this and I want to walk with you through what the ABC test is again in case you are in one of the 22 states where this counts.
So A, the work is done without the direction and control of the employer. If the work is done without any direction or control of the employer, somebody could be deemed a contractor.
B, the work is performed outside—his is where we usually get jacked up. The work is performed outside the usual course of the employer’s business. This is where things get tricky. If you own a hair salon, having a stylist doing hair in your building generally doesn’t fall into B, which is where things start to get a little shaky.
And then we have C, the work is done by someone who has their own independent business or trade doing that kind of work.
Now, usually any licensed stylist falls into C and so that works out okay. This is very gray and our industry doesn’t usually have the hammer thrown at it for any of these things.
But the reason I bring this up is because in recent years, I have connected with some salon owners who have been sued by former booth renters with a counterclaim that they really should have been classified as employees and they’re looking for back taxes. Usually, the stylist in the case wins because it is on the burden of the stylist to prove that something nefarious was going on and then the burden of the salon owner to prove that no, no, they were classified correctly.
One of the first things that the legal system looks at is are your stylists on a shared booking system? If so, it is very difficult to show that they were our contractor because when you look at point A, the work is done without the direction and control of the employer.
I understand emotionally and verbally you and I can say you are gifting them clients and you are right. However, what’s happening is you are booking those clients on the shared booking system regardless of if the stylist approves it or not.
Now, you and I from an emotional standpoint are like, “Hello, that’s such a huge gift.” You’re marketing for them, you’re giving them clients… Yes, in an employee-based environment. Have at it. That is their job as the employee is to do all the clients you book for them. That is the whole relationship.
When somebody’s independent technically and legally, they would need to have their own booking system linked to your website and then they would manage those bookings as they came in.
Now, the nice thing about that too is that it means when a client does have a frustration, it was pretty clear from the start that when they booked that appointment with that stylist from your shared website, that it went directly to the the stylist’s business management tool, right? It didn’t go to the shared tool, which does create gray area. It went down this side road to the stylist’s owned business management system, right? We get two birds with one stone there.
Remember, I said I do still believe it is your responsibility to be attracting clients for your stylists. However, I think that’s where it’s starting to get clunky, funky, gray. Something to think about.
Now let’s talk about the last piece. You said, “I’m happy to help them grow, but I also don’t feel like I’m being compensated properly for the amount of handholding I’m doing and clients I’m giving them.”
You know what makes me really sad, Golden Retriever, is I actually wish we were back in San Diego at the Iconic conference because I would ask this in a room and I know exactly how the visual would shake out. I would say raise your hand if you are an independent stylist in this room. A certain amount of hands would go up, right? Not the whole room, but a certain amount of hands would go up.
Then I would say, “Leave your hand up if it would have extra perceived value for you if the salon you worked at gave you clients every single month.” I can’t imagine anybody would lower their hand and be like, “Oh no, it, it’s worthless to me if my salon is giving me great clients.” Like given it’s got to be target market clients you like working with, like a hundred percent within your wheelhouse. If you’re a booth rental stylist and your salon is providing you clients every single month, no one’s going to have a problem with that. Everyone’s going to keep that hand raised and they’re going to be super stoked on the opportunity because value in that is so high.
So when you say, “I’m not being properly compensated for the clients I’m bringing in,” when you’re a booth rental salon owner, I talked about this on a previous episode, you only have so many revenue levers.
One of your revenue levers is the clients that you potentially do behind the chair as a salon owner who still takes clients. The other revenue lever is retail sales if you have it.
And then the third revenue lever is the rent you charge. You can charge more rent theoretically if you are truly, like you said, building 85% of somebody’s books. The value in that is massive.
When you go into Thriving Leadership, one of the tools I have is a booth rental calculator. One of the things that I find is so often booth rental salon owners are charging way too low for their booth rent based on their market, their overhead, their demand, everything. If you have access to Thriving Leadership, I’d suggest you running yourself through that. Because when you say I think I should be, or you’re asking me, you’re not saying you should be. You’re asking me should I get a finder’s fee for that first visit I’m sending to my booth rental stylists.
I tend to think if you went to your renters and you’re like, “Hey, for you to stay on my booking system, I’m now going to charge you a $50 finder’s fee every time I send you a new guest,” you are going to be going back and forth on that all the time. “Well, you sent me a new guest named Jimmy, but he was terrible and I ended up sending him away ’cause we didn’t get along. So I’m not paying you the 50.” It’s like you’re going to end up arguing about silly things and then what do you do? You invoice them at the end of every month asking for more rent on the times that you did give them more clients. But what if they gave that client to somebody else now who owes the money? It’s like you’re now creating an accounting management issue that doesn’t need to be there.
The other thing is, I think stylists are going to find it to be a headache and you’re going to have some who are saying, “I don’t even want the clients anyway.” Then you have some on the system, some not, which you said you were okay with. But to me, I think we’re overcomplicating something that could be simple.
If you want to keep the shared booking system and you are not in one of these 22 states where it could get you into trouble—which you’ve may very well not be, over half the country is not in one of these states—you could keep the shared booking system. What I would do is run yourself through the booth rental calculator and say, “Am I charging the appropriate amount for booth rent or should I honestly be charging more? Is that maybe where something is off?” Because rather than having a piece rate finder’s fee for those clients, I think it just increases the perceived value of working with you.
What I hope this episode did is give everybody perspective on how we’re all running our businesses and really thinking about our business. Take a step back for a minute and say, “How do I make this logical? How do I make this make sense? What does the client see? What would their perspective be? How would this feel to a stylist? Do I have the right people in the building? Where is this actually broken? And what are the shifts I need to make?”
Y’all, I hope this was a helpful one. As always, leave me a rating or review if you have any questions you would like me to tackle on the show.
So much love, happy business building, and I’ll see you on the next one. All.
