If you’ve worked your way up in the beauty industry then you’ve probably come across a number of different business models which have their own pros and cons. During this time you probably also planned exactly what you’d do with your salon when you were finally able to set up your own!

When starting up your own salon one of the most crucial decisions you can make is whether you’re going to employ staff on your books or rent out salon space to self-employed beauticians and hairdressers.

If you’re unable to decide which way to go, here are a few questions to ask yourself about running your salon, either with employees or with self-employed staff.

Is Flexibility Essential?

If you don’t know how much money your business is going to be bringing in over its first few years having staff on your books can be an enormous cash burden. It’s likely that you’ll immediately have to stump up for rent, salon insurance, equipment and any number of fixed costs, and if you aren’t sure what demand is going to be like having the flexibility to move staff on can be essential.

There’s also a more practical aspect to having self-employed staff: it’s much easier for parents to work their day-to-day lives around a self-employed job and you might find that some of your younger beauticians are juggling college commitments as well as work. Therefore, the makeup of your workforce can greatly affect your business and how flexible you need to be.

Security and Motivation

Two key benefits of having full-time staff paid either by salaries or wages are security and motivation. With a full-time salary your staff know that they are always going to be paid and that they’ll have a workplace to turn up to even if demand is flat for a few weeks as can often be the case during the height of summer.

Motivational theorists would also say that security is key for getting your workforce motivated, and if you want a salon team to really bond then ensuring everyone is on the same page and paid in the same way can be beneficial.

Cost Decisions

A key factor in choosing an employment model for your business will naturally be cost. Employing salon workers will come with extra costs such as national insurance, income tax, holiday and sick pay, however if you’re staff are self-employed the costs will generally be much lower.

On the other hand, you may actually find that employing staff means you can get a little more out of them for the same amount of money. Salaried staff may not need to be paid overtime and are usually happy to chip in with cleaning and management duties more than self-employed workers might be. It’s worth running the calculations for your business and seeing what will affect your margins the most. Make sure you do your research when running this: the more detail you have in your predictions, the more accurate they will be.

Training and Development

One final thing to consider is the training and development of your staff. In a salon environment loyalty and knowledge can be immensely valuable and hanging onto your staff is key. If you can employ your staff you’re much more likely to be able to provide them with the training and support they need to develop.

While you certainly can build up a great bank of self-employed staff, it’s much harder to encourage training and it can also be more expensive. Training costs are normally tax and VAT deductible, but they won’t be if your staff is self-employed. This is especially important if you’re taking on a number of younger employees who might need to go through their college training early on in their career.

Each salon will use their own business model and either model can often work well. However, balancing costs, flexibility and security are important – both for you and your staff. Your customers will want to know they have a steady, stable team at their service and you’ll want to be sure you can cope with demand as and when it comes.

Photo by Dean Wissing / CC BY-SA 2.0