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Reality of Booth Rental:Is the Grass Really Greener onthe Other Side?Professional Beauty Association
What’s Going On?You own a successful salon, your team hasregular clientsYour employee starts receiving marketingmaterials in the mail from salon suite rentalsThese materials provide all the reasons whyyour employee should leave you
What are Salon Suite Rentals Offering?These ads are telling your employees: Work less and make more, just bring 60% ofyour current salon clients with you It is so much easier than you think, saygoodbye to their salon and open yours Finally focus on your clients and not thesalon drama Bored? Be the stylist and the boss youhave always wanted to be
Something is missing
Work Less and Pay More? MarketingMaterials are Misleading!WHAT ABOUT Wage and Tip ReportingTax WithholdingsMandatory Health Insurance
What Do Your Employees Think?Some licensed beauty professionals feeltheir current salon environment does notoffer: Enough of a financial gainto stay Enough benefits such ascontinuing educationtraining or mentorship A strong opportunity togrow a consistent clientele
The Potential for Financial Gain isCited as a Top Reason to Leave anEmployee Based Salon Environment. If a stylist believes he orshe brings in 100,000 ayear to a salon but onlytakes home less than half They feel the opportunityfor financial gain is worththe transition to work asan independentcontractor
Its Time for a Salon Owner and SalonEmployee Discussion
Is the Grass Always Greener?PBA understands that your employees may feelbecoming an independent contractor seemslow-risk and high-reward, but we know it is notthat simpleYour employee’s decision should be based onthoughtful planning, not misleadingadvertisements
Help Your Employee
Help Your Employee Weigh thePros & Cons, What Will They Lose if TheyLeave ityOperationalExpenses
PBA has RESOURCES for YOU!
Lets Compare Talk About the TRUE COST!Ask your employee what heor she thinks it really takes tobe a successfulindependent contractor.What is the true cost?What will they lose and whatwill they gain?probeauty.org/contractors
probeauty.org/irs
The IRS: Compliance, Law, TaxResponsibilities, Forms, Filing and more!Sit down with your employeeand take them to PBA’s IRSResource page to go over thelegal responsibilities and formsthat must be maintained as anindependent contractor.While you are there show themall that you must comply with asa salon owner too!PBA IRS Resources for the professional beauty industry, probeauty.org/irs
How Do You Start the Conversationwith Your Employee?Lets walk through the steps!
Are You Considering a Move from OurSalon to an Independent Contractor?Lets Explore your how your responsibilities willchange Choosing the Right Path for YouOperatetheirbusinessMeet thelegal tax ependentcontractors
Should You Become anIndependent Contractor?What are myrealistic incomeprojections?What are theassociatedcosts?How much workis involved?How manyclients would Ineed to make aprofit?What are therisks andbenefits?
What Do You Have?W-2 Salon Employees Commonly Receive:Unemploymentinsurance th, vision,dental, etc.Mentorship,training, andcontinuingeducationPersonal liabilitycoveragethrough yoursalonAccess to brandname, high-endprofessional andretail products
What Do You Have?W-2 Salon Employees Commonly Receive:Retail commissionProfit sharingEmployer sharedcost of employeetax responsibilitiesStaff managedpayment processingand appointmentsettingBonus pay
What Do You Have?W-2 Salon Employees Commonly Receive:Housekeeping(towels, capes,materials) andsupply ordersConsistent clientbase andopportunity for walkins or front deskreferralsMaintenance ofsalon, includingutility expensesConsistency andreliability
Maintaining and Building Clientele fromInside a Salon Suite What is Your Plan?Planahead: How will you build the level ofclientele needed to exceed yourcurrent earnings?
Client Retention:If You Leave, Will They Come?#1 Concern: Building a new clientbase and maintaining client numbersNot as simple as“retaining 60% of yourclient base”Did you sign anemploymentagreement or a noncompete?
Fulfilling Obligations as an IndependentContractor Means You will Operate YourBusiness as a Serious, ProfessionalBusiness Owner: Abide by all the legal local, state, and federaltax obligations Report all income (including tips) Maintain the appropriate licenses Maintain personal liability insurance
A Successful Licensed IndependentContractor:Reports and pays product retail sales taxReports all income, including tipsPays local, state, federal taxesObtains personal liability insuranceSuccessfully retains clients
A Successful Licensed IndependentContractor:Maintains appropriate healthcare insurancecoverageManages client scheduling and paymentprocessingDevelops and manages self-marketingPurchases and maintains adequateproducts, materials, and toolsSeeks out continuing education
If Being an Independent Contractoris the Right Path for You ü Know the facts and have a concrete plan of actionü Familiarize yourself with the appropriate forms youwill need to establish your business:ü Business nameü Quarterly tax paymentsü Specific licensesü Other business obligationsBefore you make the transition
Risks versus BenefitsMost importantly, understand that like any majorcareer move, taking the leap to becoming anindependent contractor has many risks and benefits.If you do decide that stepping out on your own iswhat you want to do, be prepared and take anhonest, realistic inventory of what it will truly take to besuccessful as an independent contractor.
All Things Considered Take a look atthe numbers,visitprobeauty.org/contractorsand use ourinteractivecalculator todetermine yourfinancial costsand benefits
CONTACT PBASteve Sleeper, Executive Director480.455.3439 [email protected] Fantetti, Membership Director480.455.3430 [email protected] Y. Irizarry, Government Affairs Director480.455.3451 [email protected]
PBA understands that your employees may feel becoming an independent contractor seems . dental, etc. Personal liability coverage through your salon Mentorship, training, and continuing . Know the facts and have a concrete plan of action ! Familiarize yourself with the appropriate forms you
