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


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?

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,

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, 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