EP 3.25: Commission vs. Rental: What's Better for Today's Stylists?

Speaker A: What's up, you guys? I'm your host, Michelle Sonor, and welcome to the Limitless podcast. Today we're covering a really hot topic in the salon industry. The ongoing conversation around booth rental versus commission based salons. As a salon owner, I've seen both sides up close and personal. There's the independence and flexibility of renting, yet the structure, support and growth that comes with a commission swan. And lately there's a growing trend of stylists rethinking the whole be your own boss mindset. And they're finding real value in employee based careers again. So if you're wondering which path is right for you, or if you're just genuinely curious about how our industry is shifting, this episode is for you. So grab your notebook and let's get Limitless. All right, let's revisit the commission rental ownership conversation. The last time I actually talked about this on, um, the podcast, I looked back was in 2023, and I thought it would be interesting to have this conversation again because throughout the years it's forever evolving. And I ultimately just want to provide more knowledge out there for the stylist, for the owner, um, and just kind of have a conversation about what's going on in our industry. Um, I won't pretend to have it all figured out. Not, not one bit. However, I do have some major experience in both rental commission, I should say all of the above for hourly rental commission, um, salon ownership. And I also reached out to our community on social media to give us some real stories and scenarios that helped shape their views on why one model is better or worse for them. And it was so interesting because having worked in a few salon scenarios, I've seen a lot, but I haven't seen it all. And so it was really cool to hear stories from people all across the world, um, just on their experiences in the beauty industry. And I want to start off this conversation by saying, no matter where you are, no matter what kind of stylist you are, you are enough. You are not less than. There's so much pressure right now through social media and other people where it's just like, you're less. Like, if you're not an educator, you're not doing enough. If you're an employee, you're not doing enough. And it's like, this is so not true. So I want to provide clarity and really have us take a step into what do we want our life to be like. And that's more of the direction that you need to go in. And what I've really also come to find through myself and also through, um, the experiences of others is it really does come down to the leadership. Right. So we could have a bad view on one model, but it could be just strictly based on how that experience was for us in that model. So I want to first start by identifying kind of the different models clearly and what might be some of the general, um, perks and benefits to each one. So let's start with commission. Um, for those of you who don't know, I worked in a commission salon for about seven years. More corporate style, I would say I rented in a suite. After that, um, I opened a commission salon, and I have transitioned to rental salon, and now we are a hybrid salon. So I've kind of seen all of these different dynamics and commission for, uh, a little bit there kind of got the short end of the stick. And I think it's because of the old traditional ways that commission was being done, and that's what led a lot of people in this transition. But I'm going to talk about kind of the benefits first. So the first thing is, is less work and less work doesn't mean you're less ambitious, less successful. Less work just means the salon is taking on more things for you. And a lot of times within a commission salon or. And let's, let's be real, let's take ourselves out of this industry. Anytime you're an employee, there are benefits, right? So commission or hourly employees. Um, just think of an employee in general. However you're getting paid, everything is essentially handled for you. So you get to come into work and focus on what you do best, the art and nothing else, which can be really freeing. Um, the products are gonna be there for you. The booking system's gonna be set up. The client communication is handled for you, the marketing is handled for you. They help you build a clientele. Um, the website is all done. There's mentorship, there's client. Amenities are all taken care of. Like little things. For instance, I mean, in my salon, it's like, okay, we have oil that we put on our hot towels. Like, you're not having to think about that. We have snacks and beverages for clients. You're not having to think about that. Um, if we run out of foils, if we run out of gloves, if you need Vaseline for the hairline, if you need a color removing wipe, if you need, um, cleaning solution, if barber side, if you need trash bags, right? You're not having to worry about any of those things that an owner and, or sometimes rental Stylist would have to worry about, um, you're not having to worry about payroll, right? So every couple weeks, you know, you get paid, you get a W2. You don't have to think about your taxes, um, you don't have to organize anything, receipts, you don't have to hire an accountant, right? So you're not having to have these like, like extra, um, bookkeepers or accountants, uh, on your, um, that you're paying, right? You're not having to pay for cleaners. Um, a lot of times education is going to be provided for you, right? So that's a huge thing. I mean, I, we have a class coming up in a few months. I just spent a few thousand dollars to have my commission stylist get education. So paid education. Um, in some cases, salons will offer paid vacation, 401ks, things like that. Um, a lot of time, you know, insurance, sometimes. Um, there's a lot of factors involved with that and why it would be beneficial or not. But regardless, if you can hear, in a nutshell, a lot of things are handled for you, right? And all of those things cost time or money. And so that's kind of the trade off, right, with a rental or an owner. And I am a, I'm an owner, um, and I'm essentially like a commission stylist within my salon. So some of the benefits and perks for rental or ownership is going to be more freedom in the sense of like a lot of our listeners brought up, like, I didn't want to work Saturdays or I wanted more vacation. Um, I can't speak to that in my salon because my salon we do have unlimited vacation. They can have off on the weekends, things like that. However, I know that some salons that doesn't align with their model and their business, so, you know, they might have kids and they want to spend the weekends with their family. So definitely more freedom. Um, yeah, vacation whenever you want. Um, running the services however you want, like running sales or promotions whenever you want without having to communicate with the owner. Um, there's potential for higher pay in exchange for more work. Right? So, um, the little piece to this that I want to say as well as you know, you can, of course, if you're working extra, like, you should be able to make more money. Duh, like that, that's awesome. But you just have to make sure you watch your expenses. So I think that, um, from a rental or ownership side, there is business component of it. So if you really enjoy business and you really love business, you love that side of it. That could be total benefit for you. It will, it will fill your cup, um, and allow for opportunity there. And this is kind of where I feel like in my salon, I bridge the gap. So we have a hybrid salon. And the reason why I went with that model is because I do realize that stylists at, uh, different seasons in their life might want something a little bit different. And, uh, so I decided to offer both models and we have from the commission side. So, like, I thought about for myself, I was like, okay, what would be a downside for me working in a salon being a commission stylist? And yeah, one of those things was like, I want the freedom to work, you know, the hours that I want to work. And we work together on my, uh, on my commission stylist schedules. Like, hey, you know, you're new, you're building. Here's what I would recommend. What do you think? Does this work for your lifestyle? Yada, yada, yada. But so we work on that. So my commission team has a ton of freedom when it comes to vacations and schedules. So I tried to find the pain point that someone might hate. And then, is it really that big of a deal for my business? Maybe it is, maybe it's not. But for me, it wasn't that big of a deal. I thought, you know what, I'm going to pick my battles here. It is more important for me to feel like that stuff stylist is, um, happy and successful than it is for me to really nail down. Like, you must work every Saturday. When they work Saturdays, are they fully booked? Hell, yeah. However, it's just again, picking your battles, allowing them to live their life, because that's a huge, huge pain point of why people don't want to work in commission salons. Um, and then on the flip side of that, in a rental salon scenario, a lot of times there are no amenities provided for you, which then costs you more money and also to not only cost you more money, but it costs you more mental space, like, to be able to. That you can't then put towards your clients in your craft or client communications or things that should be important. So because I wanted my salon to be cohesive in an elevated experience, I decided to offer amenities to the rental staff and the commission so that when a client comes in, they're not experienced a diff. They're not experiencing difference in the amenities, right? So they're walking in, they're getting offered a signature beverage, a signature snack. Um, we have hot towels with, again, oils on them for all of the Clients like luxury space, things like that. Marketing the website is, you know, really user friendly. So it allows just the ease for those clients to book with everybody. Um, we have one cohesive booking system. So again, if someone texts in and they want to get in with even a rental stylist, I will go ahead and I'll book them for them or I will maybe make, I make recommendations for all my stylists. We, we really believe in finding the right fit for you. So for me it's like, okay, it doesn't matter if they're an employee of mine or they're a rental stylist in my salon. If I think that that stylist is the best fit, that's who that client's going to go to. Because at the end of the day, it's about the happiness of the client. And also if you can feed into your rental stylist and your commission stylist, they're going to be happier, right? They're making more money, they're going to be happy. So that's kind of where like maybe you're an owner and you're like, uh, I don't really know like what to do. I have evolved my business so much over time and this was actually a really interesting conversation. I want to bring up one of our listeners conversations. Um, she has. She worked in a commission salon, um, when she lived in her original hometown. And it was a wonderful experience for her. She said she felt that she had a salon owner that she could really have a relationship with and that she could communicate with and bring up ideas and they were open to listening. And she really didn't feel stuck at all. She was like, listen, this was like amazing. Like, I got to do great work, I made great money and I had an owner that was flexible and open and always wanted to be better. And so if you're an owner, I feel like that is a really key, um, relationship to have with your team because I do think that helps them not feel as smart stuck, um, especially if you're an employee based salon. But then she said, you know, she moved to a different state and she worked at a salon where she did have the opposite experience where she didn't really feel like she could grow within that space. And that was tough for her as a stylist because she wanted to grow. Now there's nothing wrong. Again, like, if you are in a season of your life and you are not in this like massive growth state and you want to have, you know, a baseline and make this great income and come home with a W2 and, and have a paycheck. That's amazing. Like that is such a amazing place to be. But she ended up not being able to find what she was looking for in an employee based salon when she relocated. But another benefit of relocating, right, if you're relocating to a different state, like you want to go to a salon that's going to help you build your clientele. And this is actually what one of my stylists shared with me. She relocated from a different state and she was like, you know, I didn't want to have to worry about paying rent and you know, getting clients in. And I really wanted to work with a, uh, salon that had an established brand because then from there I was able to obviously build my clientele, right? So like, of course, like they're going to want to come to a salon that's going to help them build so they can make money quick. So there's so many different like, scenarios and reasons why you would go one way or the other. And I wanted to also talk about like the owner's perspective of, um, why you might want to own one or the other. Because this was the thing that really was really, really hard for me in the beginning of starting my business. I was so ungodly focused on what model do I want to do. And it felt like it was a forever decision. But the reality is, is with the way that our industry is changing and evolving all the time, like you can make changes if you feel that you need to. And another owner was telling me last night, I was listening to her voice memos she was sending to me was like, yeah, if I had a salon, if I had a stylist that was really, really amazing and I wanted to keep them, I would highly have considered allowing them to rent. Right? Because you want to have this staff that you feel like you can trust. And so a lot of times for owners, there's reasons why you might initially start by choosing one model or the other or choosing to blend them. Fun fact about me is I love my hybrid salon more than I've ever loved my salon before. And I actually said in the beginning of my career I would never own a hybrid salon. That's a complete waste of time. Um, why would somebody, you know, why would somebody ever do that? There's going to be a conflict of like what one person get versus the other. That was such small minded thinking because I realized, okay, this is actually what works best for me. So commission. Why you might want to own a commission salon, um, control over the brand. And the service expectations, right? So you own a commission salon, you have the ability to dictate how the experience is, right? Some stylists want to work in a really elevated experience. Some stylists want to wear a messy bun and leggings and want to have like this, you know, they don't want a high end experience. It's not their vibe. So they're not going to come to your salon. That is okay. Um, a cohesive, um, experience for the client. Meaning like in our salon for instance, I can only speak to mine, you come in, you know, you get your signature beverage, you're getting your snack, you always have a hot towel, you know, we have a boutique in there, all that. Um, the quality sometimes in rental salons, um, the, the purpose isn't building a culture, right? It's the, the purpose is to fill their chairs. And that's okay. Not every rental salon, but some rental salons, right? Or suites or whatever, right? You, as long as you can pay the rent, you can be in there. So sometimes if you are someone who is worried about the quality, that might be a reason you'd want to be commission as well. Um, there can be, definitely can be a higher investment, right? Think of like the education you paid for. Um, um, training stylists when they're new costs a lot of money, but there can be a higher reward in pay or fluctuation in pay once that team is trained really well, right? So you put in the effort, you get an roi. Pretty awesome. Whereas when we talk about that in our rental salon scenario, a lot of the salon owners that I coach, one of the things that they struggle with is they feel like they come up, uh, they're like, I'm capped out. Which can be true in some cases, but it can also be the right thing in some cases. So you know, that's, you have eight chairs, the stylist pays rent for the year. It's awesome. You have that predictability. You're like, heck, yeah, I've got, you know, this much coming in. I've got predictability over what my expenses, my income are, all of that. But you can kind of cap off a little bit more. So you also might prefer to have a rental salon if you don't want to put in as much time and effort and energy into leading and educating. That doesn't make you wrong. It's just a personal preference. Um, and you want to have more of that like landlord role versus that like leader, mentor role. So there is definitely more work from my experience required with commission employees. But again, just like. Just like any other thing, can have a higher reward in some regards. But rental, also, if, let's say you have a firm belief, right, like you. You believe deep down that the, the way that you educate and lead is better for a rental salon, then you should have a rental salon. Don't try to force the commission model or vice versa. Um, and then an owner, I would say I want to read a story to you guys in a second here, but ownership is really meant for people that want to lead and want to scale and can handle a high capacity of stress. Um, not meaning they're walking around distress all the time, but there's just a lot of logistics. You know, think about if maybe you're a rental stylist right now, right? You're. You're managing like one person in your room or. Or your chair. When you own a salon, you are. You're hovering over everything, right? So there's more responsibility. Um, you're responsible for just so many other people's happiness and the salon as a whole, and you're responsible for payroll. You know, if you are. So people's incomes, right? So there's a lot more responsibility. So if you really love leadership and you want to scale, being an owner can be really awesome. And I, uh, want to read this story. I'm going to pull this up on my phone here, so. Because I've been seeing this a lot. There has been so many, uh, again, there was an uptick in people wanting to own salons because of a lot of reasons. I think it was like, it was cool to own a salon. And also every stylist kind of felt like, what's my next step? And they always felt like, this has to be my next step. Um, otherwise they can't grow, which isn't true. There's a lot of other ways, but it's just kind of like at a baseline, that's what they felt. And so a lot of people opened salons, and I'm happy they did, because if you never experienced it, you'd probably always think, like, what if? But in this scenario, someone actually said their girlfriend sent them the story, and they. They wanted to tap into the conversation. So they owned a salon for five years, and it was a hybrid salon, and they got so burned out because they couldn't separate their identity as a stylist behind the chair and the identity as a business owner. Straight up. Had too many clients, nowhere to really put them. I was in upstate New York and always wanted to move, so I kind of said, screw it and just blew up the whole thing. Moved to Arizona to start over, essentially. Um, so in this situation, you know, it was a lifestyle change that they wanted and they didn't really feel that the, for the amount of work that they were doing, they didn't really feel like the profits were worth it or that they wanted to put in the effort to make those profits. And I read another girl's story on Instagram too, and she was a salon owner and she went back to working commission because at this moment in her life, that's what she wants. And she. It was kind of, it's got that trend going around right now that's like, you look happier. And it was like, I look happier because I sold my salon. So do not feel bad if you end up trying a specific model and realizing that it's not for you, because that's also okay. That does not mean you are a failure. It just means like you tried something and it wasn't the best option for you and good for you and more power to you for making that change to something that does work better for you. So you might have different seasons in life in which certain things make sense. Nothing forever. And that's the same thing. When I was talking about, you know, when I first started my salon, I felt like, oh my God, I have to make this decision and I can never change. That freaked me out. But I have changed so many times and it's only been five and a half years. And I decided I wanted to be someone that evolved and changed with the industry. So that's exactly what I did. So I wanted to address with talking about the conversation of people going back to commission. It's like, why have we seen a major upswing in the desire to go back to commission? And I think the number one reason, based off of my views and also our listeners, is going to be lifestyle and balance is so sexy in 2025. People are like, yes, I want to spend more time outdoors. I want to be with my kids on the weekend. I want to go home and turn it off. I don't want to feel the responsibility of replying back to clients 24, 7. Or I don't want to, I don't understand taxes and I don't want to deal with them. And I don't understand like the uh, how much I'm just over buying on product and then my profits really aren't there. So people are realizing that it may not be actually making them more take home home money. Or if it is, the take home money is not worth the sacrifice of their lifestyle or balance, right? So I think that's one of the big reasons why commission is having a comeback. I also think a big reason why commission is having a comeback is because salon owners have changed the way they do commission. Okay? So like I was saying before, a big thing for a lot of commission stylists is they don't have freedom, they don't have flexibility. And so we're giving them more freedom and flexibility. But it's actually really interesting because many younger, like, Gen Z millennials are, uh, valuing structure, education, and mentorship like, more than they realized they. They would need it, right? So it's like having something that's, you know, the support, I should say, having that support, it feels really good. And it can feel a little bit isolating sometimes when you don't have any support or you don't have anybody building you up. So they're kind of realizing that they want some of that. Um, I think another big reason why, you know, we're having a little swing and comeback is, I mean, overhead costs are just going up. They are. They're going up and up and up and up and up. And when it's, ah, an owner's, uh, issue. That's an owner's issue. You don't have to think about that. I mean, even the complexity of taxes, um, I think it's making owning a business less attractive to some people. And I think that they want freedom, but they also want support. So it's like, how can we bring both of those, both of those things together to try to make our industry better overall? We don't always have to do things how they were always done. And I think that's where we just need to keep an open mind as our industry progresses constantly. Just like, we have to keep an open mind in, in how we do hair, right? We're always changing the way that we're doing people's hair. Let's think about the brow industry. It was microblading, then shading, then nano brows, right? There's like, it's always forever changing and evolving. So I think if as a whole, we can just keep an open mind around evolving with the industry, I think that we were all, we will overall be a happier industry. I also asked a stylist as well, who had a previous, um, commission experience. I said, hey, can you let me know? Like, what did you. What do you love about your, like, current commission experience versus your other one? Like, what are some of the differences? And what she really appreciates is the attention to Detail a salon owner that, that really cares and values her. Like, she feels very loved and very, um, appreciated. So she loves that. She loves the flexibility, um, how intentional the hiring process was. So that was a big thing for me. Like I am. It's really important for me who I surround myself with. So to me, I would want to find a salon that had a very intentional hiring process. Not just like anybody who can fill butts and pay the rent or who can fill butts and do clients hair. Like, I want to be around people that make me feel good. So intentional hiring, um, she said she also loves when Aslan has an established brand and a social media that helps her build her clientele. So I love that. I just, again, these stories are so helpful and insightful, um, because I think you can really get burned from having a negative experience and that makes you have a negative experience on that business model. But yet maybe the negative experience is just on that salon or that owner. So I want to then get into what are some of the things that people don't realize about rental and some of the challenges that people have said to me that they have with renting. So the marketing piece of it, Some people, they don't want to market, they hate marketing. They're like, ugh, don't want to do this. If you don't want to do that, commission salon might be a better route for you. Um, they don't want to manage their taxes, finances, uh, and bookkeeping. So that's a challenge, um, that a lot of times they can have and then client retention, um, when switching models. So you know, if you are coming from a salon that's doing it all super good, you have to make sure you kind of maintain that to be able to retain those clients. And I think that like I said before, there was this like romanticizing thing around entrepreneurship without understanding the full picture. Um, and there was this pressure to, to be your own boss. And I don't think that that's a bad thing because again, I'm like a shoot for the stars type girl. I think that's amazing and I am my own boss. But I also don't think that you're less than or wrong for not wanting to do that. Um, so I think there'll be an upswing in commission salons. I also think there will be an upswing in hybrid structures. That was something that was really interesting. Our listener said to us as well. Uh, there were numerous stylists that work in hybrid situations and they said that is actually their favorite to work in, which I thought was really interesting because again, my mindset was so small minded to that when I first opened a salon and I thought that that was really cool. They said they loved to have the ability and the flexibility in both structures to be able to do what works for them in the best season of their life. And also too, they loved like being around people. That's another thing that you want to kind of consider when you're thinking about what route you want to go. If you like working in collaborative spaces, you might enjoy more of an open concept space, whether that's commission or rental. But if you're somebody who doesn't like that, right, you're super introverted, you don't want to talk to anybody, you're like, no, thank you. And you love maybe more of like an intimate experience, then maybe like a suite option is going to be best for you. And that's the same thing. You can kind of think as an owner. Like maybe you want to be an owner, but you're not wanting to necessarily manage teams and people. Okay, maybe you want to open a suite salon that has suites available for people versus opening an open concept salon because you need to focus or I believe it will be a benefit to you to focus on the culture, um, and in that space. If you're a stylist as well, you're not just strictly an owner. You can also think about what type of environment do you want to be in and then create a space that you really love. And that's another piece of why my salon operates the way it does, is because this is the type of salon that I would want to work in. Um, and it fits me, and it fits my personality. So to kind of give you guys some final tips and some final advice is when choosing whether you're a stylist or a salon owner, you're wanting to choose models. Know your personality, know your goals, know your season of life, your strengths, your weaknesses, what you value. Um, I think that you don't want, don't think about the pressure of what the Internet or society thinks you should do, and think about your life and your happiness. Again, no matter what we're talking about here, that should be the overall goal. You have one life to live, live it happy and love what you do. That is so important. And then my advice to owners is you can always change and pivot. So don't freak out. It might take steps and processes. Give yourself a well thought out decision, right? Like, don't just like make decisions on a whim. But if you want to Change it. You can. And if you ever have questions, this is probably the number one question I get. Reach out to me. We can, we can happily, I can answer a few questions for you via voice memo or we can hop on a one on one call. If you want to do more coaching, um, to change that because again, everybody has different strengths and weaknesses. And that's another thing. As an owner, maybe you are great with leading a team, but you're not great with the numbers. Cool. Hire somebody for that. It will take a lot of stress off of your plate. Or maybe you are have a hard time with conflict. Cool. Maybe hire a manager. Right. So really focus on what your strengths and what your weaknesses are, whether you're a stylist or an owner. And then keep in mind your leadership style. And at the end of the day, like do things for me. I don't do things in my salon because I want people to be like, you're so cool and to praise me. And I'm not saying that's wrong, but I don't do it for that. I do it because I know the overall impact that it's going to have on everybody else's lives. And in ripples effect you get that gratification. Right. So think about like what you're doing it for. And I've had to ask myself that question before in different seasons of ownership. I'm like, why am I here and why am I doing this? And that has oftentimes led me to making shifts and changes. Now I wish I had time to share everybody's stories, but I just want to say a big thank you to our community for sharing your personal stories with me and because it opened my eyes to things I didn't even know that may be going on in different types of scenarios. Rental, commission, ownership, um, because again, I only have my experience. So you bringing your experience to the table is so valuable. So I'm so grateful for this community and I'm going to wrap that and tie that into our ask me anything, which is what I do at every end of every episode. I let my listeners ask me me anything. And nothing is off limits. And the questions are so fun. So this one is what is one thing you always do that instantly boosts your mood no matter what? I can think of so many different things. One, if I'm feeling like stressed or anxious, taking action always boosts my mood. Um, another thing is complimenting somebody or doing something nice for somebody else, that always makes me feel good. And then I, I would say getting outside in the sun or like moving my body are things that instantly boost my mood. I like to think about things like that might have a longer term effect rather than like this donut would make me really happy right now. Like that'll make me happy for four seconds and then I want to throw up so I there's just like again just like seeing joy and sun and like smiles like all those things um, really make me happy. So thank you guys so much for your questions. If you want to submit a question of your own, click the Ask Me Anything link in the description of this podcast. And as always, if this podcast helped or inspired you, I'd be so grateful if you would rate and review this episode, send it to a friend, share to your social media. Um, that helps us a ton. So thank you guys so much for listening and XOXO. Is something just beyond our fingertips I can feel it of the hour breathing I can take it on my lip Running out the sky. M.