There's small business — and then there's the 125-square-foot hair salon Tony Hayden operates in College Park."This is the first time I have complete control," Hayden says of his place that's no bigger than most bedrooms. Hayden, 51, is part of the growing trend of people who own individual salons inside buildings that contain upward of 30 other stylists, manicurists and masseurs. It's a thriving trend around the country and has recently begun expanding in Central Florida.Hayden's business is in an iStudio Salons, one of six in Central Florida. Add the region's seven Phenix Salon Suites buildings and Porte Noire, which opened in Winter Park in May, and there are plenty of places to get a haircut and color without setting foot into a traditional hair salon. Phenix and iStudio also have places scattered throughout the nation, in 12 other states between the two, while the Winter Park Porte Noire is the first of that brand.Tony Hayden Productions is Hayden's own even if he can hear his neighbor's blow dryer humming.
Hayden, who has been in the building for three years, has renovated his studio to match his style. A leather couch, a Sputnik light overhead and handmade artwork from the "Beauty School Dropout" scene in "Grease" with Frankie Avalon are accented with elaborate gold sculptures. He wants clients to feel as if they're in his living room.His $1,600 monthly rent is at the top end for the facility, but he knows his corner, street-front location comes at a premium. Rent includes almost everything, such as utilities and access to washers and dryers, Wi-Fi and cable. "Even though this overhead could be slightly high if you think you're renting a chair, it's fairly low if you think of it as your own business," he said. Chair rentals in traditional hair salons could cost around $225 a week, said Hayden, a 33-year veteran in the hair industry.With chair rentals, a stylist works under someone else's business. At Hayden's shop, however, he is the boss and staff.Alan Peck, managing director of capital markets for Orlando-based Flagship Investment Group, which that opened Porte Noire, said higher-end salons could charge closer to $300, which is about the price of a single studio in the Winter Park business.
Single studios, 100 square feet, cost $325 a week, and doubles, 160 square feet, go for $585.The building, with 24 studios, hit full capacity in August, and there's a waiting list for studio space, said Stacey Godard, vice president of operations at Porte Noire.The demand for space is so high at Porte Noire that seven studios at Porte Noire II, which will open in March in the Dr. Phillips neighborhood, have already been leased. Peck expects the facility to be 70 percent full before it opens.Tara Seya opened her nail bar in the iStudio on Piazza Grande Avenue in Orlando in July. She left her rented chair behind to build a name and brand for herself."It basically prepares me for the full weight of my own business," she said.Seya, who's been doing nails for 17 years, said she convinced her regular clients to follow her, something that's helped pay her $1,100 monthly rent.Hayden and Seya said they keep their studios busy by offering prices comparable to those of stand-alone facilities.If customers aren't saving money, what's driving them to the collective concept?"
He's available seven days a week," said Ashley Holtzclaw, as she sat with a head full of foils at Hayden's salon. "That's a huge plus for me."Holtzclaw, who's gone to Hayden for two years, said she prefers the individualized attention that comes with being the only customer in the studio.Though each studio operates independent of its neighbors, hall mates still help one another. Hayden said if he gets a request he cannot or doesn't want to do, he'll send the customer to the most appropriate person in-house.Seya calls this "feeding the hall.""Everyone refers clients to each other," Seya said. "We all work off each other."Cosmetologists who work as employees on a commission basis keep a percentage of the income they bring into the salon through the services they perform, typically 50% of the total amount. Although as an incentive, some salons will pay their stylists on a sliding scale, with the greater the amount of money brought into the salon by the cosmetologist, the higher the percentage she will be allowed to keep, sometimes 55% or even 60%.
Cosmetologists who are paid on a commission basis are also paid a percentage of the total amount of retail products they sell, usually 10% to 15%. The salon owner provides all the products and supplies used by commissioned employees, including shampoo, conditioner, permanent wave rods, hair color, and towels, and also pays the business expenses. The employee usually supplies her own combs, brushes, shears, blow dryer, curling irons, clippers, and other specialty items. Commissioned salon employees normally work a schedule set by the salon owner or manager, use the supplies (such as shampoo and permanent waves) that the salon owner purchases, and sell the retail product lines that the salon owner chooses to offer for sale. Many salon owners will pay all or part of the fees for continuing education for their employees, and some offer fringe benefits such as vacation and sick pay. Other than keeping an appointment book for their clients, the bookwork necessary for a commissioned stylist is usually not extensive or complicated.
Advertising is also the responsibility of the salon owner, although word of mouth is undeniably the best advertisement of all. Individual hairstylists usually have their own business cards and the responsibility of building their own clientele belongs to them. Many cosmetologists who are self-employed own their own salons, but a growing number of the self-employed lease booth space or a chair from the salon’s owner. In this case, workers provide their own supplies, and are responsible for paying their own taxes and benefits. They usually pay a monthly or weekly fee to the salon owner, who is responsible for utilities and maintenance of the building. Booth rental cosmetologists enjoy greater freedom but also have greater responsibilities than commissioned salon employees. In exchange for their rental payment, they usually receive a vanity, mirror, hydraulic salon chair, and access to shampoo bowls, towels, and chair or “hood” dryers, all provided by the salon owner. The independent contractor must purchase all the products she uses on her clients as well as the retail products she chooses to sell, and like the commissioned employee, she furnishes her own shears, combs, brushes, styling tools and numerous other specialty items as well.
Independent contractors pay their own registration fees for continuing education, and do not receive fringe benefits through the salon. Owners of booth rental salons may or may not advertise their business; independent contractors are often responsible for their own marketing. When it comes to taxes, there is a great deal of difference between an employee and an independent contractor. Independent contractors must also hold a state sales tax license, collect sales tax on their services and retail sales, and periodically send the sales tax collected to the state in which they practice, while commissioned employees don’t have to worry about any of that, as it is all the responsibility of the salon owner. Because they are not employees and federal income tax is not withheld from their pay, independent contractors are required to pay self-employment tax and usually file quarterly estimated income tax payments to the Internal Revenue Service to avoid having to pay their total tax bill at one time.
Because their tax returns are more complicated to file than those of a regular salon employee, independent contractors often enlist the help of a bookkeeper or accountant when tax time arrives. It is important that independent contractors keep accurate business records and receipts of all income and expenses, while salon employees have no need for keeping most of these records, although business expenses such as license fees and equipment may be claimed as a deduction by both employees and independent contractors. Independent contractors are free to set their own schedules, can come and go as they please between clients, and maybe even take a second job or a class. They are able to choose the product lines they want to use and to sell. While all this freedom is very appealing to many cosmetologists, most wait to become independent contractors until after they have a steady clientele built up, because whether or not they have any appointments on their books, they must pay their rent and purchase supplies to stay in business.