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The Truth About Booth and Suite Rental [EP:209]

Episode 209

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In this episode of the Hello Hair Pro Podcast, Todd and Jen tackle one of the most hot-button topics in the hair industry: booth and suite rental vs. commission salons.

They break down the hidden costs of going out on your own, the predatory marketing tactics some rental salon owners use, and why many stylists actually make less money renting than they would in a well-run commission salon.

You’ll also hear about Jen’s unique apprenticeship program, how demand and merit (not time) should drive pricing, and why the future may be swinging back toward commission salons that innovate, lead with vision, and provide real support to stylists.

If you’ve ever wondered whether renting really means “keeping all your money,” or if you’re considering making the jump, this episode will give you the clarity you need.

Key Takeaways:

  • The myth of “keeping all your money” — why rental comes with major hidden costs like software, insurance, licensing, cleaning, and taxes.
  • Predatory practices in rental salons — from targeting new grads to dangling “amenities” that erode profitability.
  • The rental vs. commission mindset — it’s less about freedom and more about whether you want to be left alone or guided.
  • Apprenticeship success stories — why Jen’s program produces stylists who can raise their prices even before they’re licensed.
  • Future industry trends — why rental is plateauing, and why well-run commission salons are primed for a comeback.

Episode Timestamps:

  • [00:00] Welcome & opening banter
  • [00:01] Todd’s “seed planting” approach to partnership and decision making
  • [00:05] Jen celebrates Madison, her apprentice, hitting 1,500 hours
  • [00:07] Pricing apprentices fairly: demand vs. time in the industry
  • [00:11] Rental vs. commission: not good vs. bad, just different needs
  • [00:13] Why “you keep all your money” is predatory marketing
  • [00:14] The danger of targeting new grads for rental
  • [00:16] Loneliness and stagnation in suites — why many return to community
  • [00:18] Business basics renters MUST know: mission, vision, P&L, insurance
  • [00:20] The importance of marketing and curating like-minded renters
  • [00:23] Why commission salons lost ground — and how they can bounce back
  • [00:26] The constant need to evolve in business
  • [00:27] Hidden costs checklist: rent, licenses, equipment, insurance, software, accounting, taxes, education, and more
  • [00:35] Commission salon advantage: stylists get to focus on creativity
  • [00:36] Todd’s renter’s checklist — what to have in place before you jump
  • [00:38] Why industry infighting (rental vs. commission) is hurting everyone
  • [00:39] Wrapping up & newsletter invite

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[00:00:00]

Todd: All right. What's up everyone? Welcome back. Happy Monday. Hello, Jennifer.

Jen: Hello. Good morning.

Todd: Ah, owe me a Coke, right?

Jen: Ha.

Todd: All right, so today we're gonna talk about mostly rental. I, I want to kind of talk a little bit about rental 'cause I've been seeing some interesting takes out there lately, as I saw. I'm just gonna say this one I saw, I think it was even yesterday, or it was this week at least, that someone said that the rental model is bad for the industry and is destroying everything.

Jen: Okay.

Todd: and I, yeah, that's kind of what I thought. I was like okay. I don't think you're doing the things you need to be doing as a business owner, if that's what you're saying, but,

Jen: Everybody can thrive if you know how to run a business.

Todd: Yeah. And that, and that's the thing and, and part of what I wanna break down today for people is all the hidden costs and all the sort of predatory practices and all the things out there that I believe [00:01:00] are setting renters up to be unsuccessful because the, maybe the rental salon owners are looking for the quick buck, not a solid business. And I, I like to get into that a little bit, but first. Opening takes. Opening takes.

Jen: You can go first.

Todd: you want me to go first?

Jen: Yeah.

Todd: All right. I have, if you need an opening take, you can talk about what we talked about yesterday, last night when you got home. It had to do with your apprentice. just trying to help you out here.

Jen: Oh, okay. Thanks.

Todd: I actually put it in my notes for me to talk about it at some point, but.

Jen: Okay.

Todd: All right, so here's my opening take. Sometimes I bring an idea to Jen and she will unequivocally shoot it down. Like she absolutely leaves no doubt that this is not what she wants to do. This is [00:02:00] not what she thinks is good for the business.

You're laughing at me,

Jen: Mm-hmm.

Todd: but I know it's a good idea and I know that Now I've planted a seed, Jen and I are different because we're, I mean, there are other. Husband own husband, wife, business owners, partners. it, but I don't see it a ton. So I know how Jen is, so I'll plant these seeds and that's what's important.

Right. I talked a lot recently about the nudges in your business and how you have to like nudge things to gradually get them where you want them to be. I could go to Gem with an idea and be like, this is what we're doing, and try to strong arm her. When we first sat down together to build Hello, she said, please don't do that to me. I was like, totally respect that because I have been known to just push for what I want in the past. Alright, so I plant the seed and what I'm really doing is I'm getting my business owner to, or my business partner to think [00:03:00] that's all she's thinking. It's not to agree with me. It's not to I'm right.

It's not to. Strong arm her. Like I said a second ago, it's just to get her to think often. She comes back later out of nowhere, right? This usually comes out of left field. I have no idea. I don't even always remember what I had said to her, and she'll come back, all right, if we're gonna make this change, then I think it should look like this.

So let's research this. now it's her idea too, because I planted that seed. And if you're out there working with a business owner. I keep saying that. Gosh, if you're out there working with a business partner and you guys disagree on stuff, plant seeds, just put, throw ideas out there. It's okay. Even if it sounds stupid at first, if you think it's adds value somewhere.

And sometimes, so Jen, recently we, we were looking to make a change. I said, Hey, I think we should look into this. [00:04:00] a couple weeks later maybe Jen said, all right, well. the research if we're gonna make this change. I did the research and turns out we're not gonna make the change. But it was important to have the conversation because if you're not having those conversations, you're not moving, you're not progressing, you're not moving anything forward in your business. That is my take.

Jen: True story. That was, that was great.

Todd: Thanks.

Jen: Kind of. Actually, I was paying attention because I was like, where's this going?

Todd: okay. What you get?

Jen: So I guess I could celebrate Madison. That's my apprentice. My, I don't even know how many I have now, but my third, Hello. So. As we've talked before of an apprenticeship at Hello is we are the school. It's a 3000 hour program through the state of New Hampshire. And at the end you can take your tests just like everyone else who went to hair school and you can be licensed, but they're.

They're at school at [00:05:00] Hello. It is a program that I customize to each individual. No one apprenticeship looks anything like the other one. It is literally for each person. My goal when we opened Hello with my apprenticeships was at 1500 hours, which is what you need in New Hampshire School to get out of cosmetology school and to take your state boards.

And with an apprenticeship at 1500 hours, the apprentice is now allowed to work in the salon without. Me there. So she can now work on clients even if I'm not in the building prior to that, if I'm not in the building, she can't touch anyone, anything not happening. That's a state rule. So coming into this apprenticeship, we're into hello with apprenticeships at 1500 hours.

I'm always hoping that the. Apprentice is ready to go or we're close to ready to go. 'cause it would be if she went to hair school and she'd be progressing. Each one is different. My first one, I think we were a little over that, my second, it was much longer. And with Madison, we're at [00:06:00] 1500 hours finished last month and she is good to go.

Credit to her. She puts in the work, she shows up every day. She goes above and beyond. She takes construction constructive criticism. She uses every single staff member in the building to get better. So I almost now look at this program and she's grown so much, so fast. Not just because of me, it's the team that has helped build her up and she is ready to go.

And Todd and I feel by the end of this apprenticeship, she will pricewise be above and beyond probably a good majority of people that have been out of hair school for a long time, and she's killing it. So cheers to Madison.

Todd: You can talk about numbers if you want, or you don't have to.

Jen: So, I mean, you could talk about numbers if you want. 'cause you had 'em probably written down. I know we, we were throwing stuff around last night, but

Todd: our haircut price last night. That was the only number that I was talking about right now, [00:07:00] if you

Jen: yeah. So we hope

Todd: done it. Because you've done it before with an apprentice. And

Jen: haircut, oh, go ahead.

Todd: I was just gonna say, so two apprentices ago, your apprentice was. Your apprentice was, I don't know if it was at the 1500 hour mark, but it was she was, she basically got a price increase before she was licensed,

Jen: Correct.

Todd: because

Jen: Yes.

Todd: a lot of bookings. She was, there was demand for

Jen: Mm-hmm. Yes.

Todd: so we start people at $45 to, to build a clientele. 45 to, to build a clientele fairly quickly, a $45 price point haircut does that, that's what we've come up with. Now, you can push that a little bit here and there and make some tweaks to it, but with our approach, with our model, [00:08:00] that builds people generally in like six months to 18 months, somewhere

Jen: Correct. Mm-hmm.

Todd: So. Ava had moved up to that $50 mark because she was worth it and she was already bringing clients in and seeing repeat clients before she was even licensed. And we're not saying that, and Madison's probably gonna do the same thing.

Jen: She definitely will. Yeah. On, on, on course on our,

Todd: probably get a price increase before she's licensed through the state. And we're not saying this to like gloat. Or anything like that. we're just saying this so that people understand what's possible. I see people all the time complaining about other people's prices. How dare they charge this or whatever. Look, businesses need to make money. Hair pros need to make money, and they can accomplish that together.

They work together. So

Jen: there's a demand, you're there.

Todd: correct. So I [00:09:00] remember that we had someone that doesn't work for us anymore, but. think she had like five years of experience

Jen: Yes.

Todd: she didn't have any clients. So she came to us, she didn't have a clientele

Jen: Mm-hmm.

Todd: she said to me, I think I should raise my prices. And I said, I don't think you should because you don't have a clientele.

Why would you raise your price? Like, how is that gonna help you?

Jen: 0% of zero is still zero,

Todd: Right? So, and she said, well, it feels. Gross to me that an apprentice charges more than I do. And I said, she has a demand. She has a clientele. 1,

Jen: was better.

Todd: don't. Correct. Don't compare yourself to other people. That's not gonna help you in any way, shape or form. And this Hair Pro had, like you said, Jen, just very little to offer

Jen: Mm-hmm.

Todd: really. I think too many people wanna sit around and think that time is [00:10:00] what gets you rewarded

Jen: Yeah, no.

Todd: when it's not. That's complacency. And the truth is that we reward merit. So the better work you do, not necessarily the skill side of things, but the more effort you put in, the faster you're gonna see the outcome. It's really just as simple as that. We've proven that model or our model and the apprenticeship model works,

Jen: Yeah.

Todd: you know, so if you're out there being like an apprentice charges $50 for a haircut. Yeah, hell yeah. And is worth it. And if that is like wrong to you, you should probably reframe your mindset and ask some different questions like, well, what does your apprenticeship program look like?

So that I can replicate that because I want that to help my business.

Jen: Right?

Todd: That's a better question

Jen: Mm-hmm.

Todd: Being insulted over what someone else

Jen: Yeah. Just change your mindset. How do I get there? How do I do that?

Todd: Yeah. [00:11:00] So let's get into, let's talk about some rental situations. Rental whether you're talking about renting a chair or a suite, I'm just gonna say rental. I'm probably gonna go back and forth between both, be honest with you. 'cause that's what I do. That does not hurt the industry. That expands the industry. That offers people that want to be left alone, the ability to do so, there are people that are gonna thrive in that situation. You rented for years, right?

Jen: Yes,

Todd: And yeah, it was great. I think really what rental verse commission breaks down to is more of, it's not the freedom and all that stuff, it's the. Do you wanna be left alone or do you wanna be guided?

Jen: It's a great way to put it.

Todd: That's really kind of what it breaks down to.

Jen: Mm-hmm.

Todd: about commissions. Well, I don't wanna make commission. You still should be [00:12:00] paying yourself a rate of

Jen: Yes, I did.

Todd: that you take in. So there's still a commission split when you are a booth renter.

Jen: Correct.

Todd: you're not looking at it that way, you're looking at it wrong and you're gonna get screwed on taxes or something somewhere at some point.

Jen: Mm-hmm. You're also not running it as a business.

Todd: Correct. So we often see these marketing pitches of like, you know, you, you get to keep all your money. That's predatory. You do not get to keep all of your money. And we'll, we'll run through. I have a list of stuff that of sort of costs that people don't think about when they go out on their own to rent. And we can run through that in a, in a second. I think, where was I going? What was I saying? Jen?

Jen: You were talking about numbers. I was thinking that you're gonna get to the numbers.

Todd: What numbers? Oh, I was talking about paying yourself as a

Jen: Yeah. Yeah.

Todd: So, [00:13:00] and then I talked about I mentioned the predatory. You get to keep all your

Jen: Mm-hmm.

Todd: The other thing, I see this, I, I've been seeing this trend in of people that are like, I'm trying to get renters directly outta school.

Jen: Yeah.

Todd: That is really setting people up for failure.

Jen: I absolutely agree,

Todd: these, these hair pros coming outta school, they can't even do hair very well.

Jen: correct.

Todd: to focus on learning how to run a bus. How, how are they gonna run a business? And if you're like, well, I'll guide them, I'll help. That's not rental.

Jen: No

Todd: opposite of rental.

Jen: coming outta school, you need so much help, which is normal. Like you, you learned basics and you learned how to pass the test and hopefully you did. And at this point, now it's up to you on how you want to build your foundation and your skillset. So to go to rent and run a business, there's no way you can work on getting better at doing hair.

'cause now you've gotta work on running a business. Those things are not the same. I would. [00:14:00] Highly advise somebody coming outta school to work on your skills, get, get ugh, your skillset of hair, if that's what you wanna do. And that should be your focus for a while. Otherwise you'll be very overwhelmed or just feel defeated.

But I think to what you're saying, there's these, I think a lot of people probably, and if I'm getting ahead of myself, I can pause. Went into suites, they got bored. They were by themselves, they got lonely. I've talked to a lot of these people. They thought it was what they wanted and then they were like, this is awful.

So then they're like, well, I wanna be around people again, but I don't wanna go back to a commission salon. So then they're like, I'll open a rental salon. And I think there was a time where rental was flooding the market and it's slowing down now because of all different things and. They need to find people to fill their rental salons because they took on this business and now they're understanding that they need to find people.

And unfortunately, if you prey on people that don't know better and you make them believe that this will be good for them, someone coming out of school [00:15:00] might act to be like, oh my God, I could totally do this before they even understand what they're signing on for.

Todd: Yeah, agreed. So, yeah, I definitely had, I had loneliness and lack of inspiration in my

Jen: Mm-hmm.

Todd: And that goes, especially for the younger hair pros, 'cause they need the mentoring, they need the help, they need the guidance.

Jen: Yes.

Todd: skills to develop even further. You're not coming outta school comfortable. We've had people quit our salon because, this is probably a mistake on our part, definitely. We've definitely talked about it, but we've had people quit they come outta school. We see talent in them,

Jen: Mm-hmm.

Todd: but they're like a deer in headlights and they're just stuck.

Jen: They wanna hide behind assisting. And we're like, we're you can't hide. We pushed that. Well, you can assist for a little bit, but we're gonna get you going. We're gonna get you working with people, we're gonna get you moving ahead. Yeah. And there are some, we've had a few that couldn't handle that.

Todd: which is totally fine.

Jen: Yes.

Todd: I think this [00:16:00] conversation will help, or I think this conversation needs to happen more than just us on this podcast, and I think it will help rental salons understand. Some of the mistakes that they've made along the way. I also think there's a huge opportunity for commission salons to look at this and say, why is so in our area, I would say that renting is sort of plateauing. never gonna go away. We're not, I,

Jen: Correct

Todd: we've said this a million times, not gonna go away. It shouldn't go away. It's an excellent, excellent. It's an excellent opportunity for

Jen: the right person.

Todd: people that are more, I would say, mature. Understand at least the basics of business. If you don't do, if you don't understand the basics of business, you shouldn't probably be opening a business.

You should learn a little bit of business first and then go I've seen like some large, rental [00:17:00] suite buildings that are not, they don't have very many in there.

Jen: Which just goes to show that it's slowing down in our area.

Todd: yeah, and there are some places that are like, we'll give you a thousand dollars, we'll give you months free. We'll give you this.

So if rent, if rental in our area was thriving, like people believe it is and it's damaging the industry and it's crippling commission salons, then what is, what is, why does that exist? Why are they these places that are begging people to come in? offering free rent, You are setting people up for failure because they think now that they can afford this

Jen: Right.

Todd: and

Jen: then once they have to pay rent, they realize they're at negative.

Todd: Right. And I'm guessing there's contracts in, well,

Jen: Mm-hmm.

Todd: intelligently run business would have some sort of lease sublease, whatever in their agreement. So 

Jen: are you gonna touch on it because I, I think this is important. 

Todd: And

Jen: kind of some. [00:18:00] Well, if we, you had talked about probably like a minute ago you need some basic business skills and I would like, can we talk about what some basic business skills would look like?

Todd: Yeah, I, so you're first, first and foremost, you need a business plan, and that is going to stem from your foundation. So your mission, your vision, and your core values, you've

Jen: Mm-hmm.

Todd: stuff lined up. You, you need to understand a, a, p, and l. Because even though you're running at a small, you're, you're, you know, a single chair, you're running by yourself. You still need to understand how your money's coming in and going out, or you're not gonna have any

Jen: Right,

Todd: And

Jen: what your bottom line is. Yeah.

Todd: Yeah. I don't think you need to understand taxes, but you probably need an accountant.

Jen: Correct.

Todd: I see a lot of people that are like, why would you do, why would you pay for this? And that's another basic mistake.

So if you are somebody out there that's like, why would I pay for this? That's a mistake. Why would I pay for insurance? Why would I pay for software? Why would I pay [00:19:00] for whatever, an accountant, why would I pay to talk to a lawyer in case you ever need those

Jen: Right.

Todd: so. If you don't have something like insurance, that's wild to

Jen: Mm-hmm.

Todd: if something happens, you are gonna be responsible and you could be out, like you're gonna lose your business, you're quote unquote, chair, you know? I think that's where I would start for

Jen: think too, if you're opening up where you have rental chairs, you should have a playbook because you, those people that are renting from you need to understand what that looks like.

Todd: were you talking about for owners? I

Jen: I'm talking both. I think it doesn't matter in that sense. I think it's, that works for everybody. Right? I also think,

Todd: I think the big piece there is marketing, because

Jen: yeah.

Todd: see people constantly, how do you find renters? How do you find renters? They can't find renters. And then when they do, it's, these renters, they're terrible. They don't take out the trash they're [00:20:00] supposed to. It's in their agreement. They leave the lights on all this stuff, and it's like, man, what is your mission and vision?

Like, who are you attracting?

Jen: Mm-hmm.

Todd: you, you're supposed to curate a, a, a group of like-minded people. People that buy into, even if you have a rental salon, it's still fine for you to have a mission and a vision. This isn't a free for all.

Jen: Right.

Todd: of people get that part wrong too, and they start dangling all these things in front of potential renters because they're panicking.

They don't know how to attract people. So they say, you can have 24 7 access. You wanna do hair on Christmas, blah, blah, blah. So just because you rent doesn't mean you even get a key to the building. You have to operate within the, within the businesses. hours, like for example, we don't rent, but. If we did, our building has strict operating hours. only allowed to operate from six to nine, six to 10, whatever it

Jen: Mm-hmm.

Todd: like that. So I can't offer 24 7

Jen: Right.[00:21:00]

Todd: because I will get in trouble for

Jen: Our lease is not allowed that.

Todd: Right? So I, you would have to check on all that stuff. You probably don't know how to read a lease. lease agreement. So you probably need a lawyer for

Jen: Mm-hmm.

Todd: But back to the marketing thing, you need to tell your story. Why would people wanna be around you? And it's not because, you know, we offer software and we offer towel service, and we offer this all the free stuff. That's what's eating into your profits. That's why you're panicking and that's why you can't find anybody because the rental situation in the industry did that to themselves. Instead of figuring out how to sort of maybe coach people into learning business. Which is what you should do. That's cool. I don't know why people don't do that, but instead of doing that, they just tried to hit 'em with all sorts of amenities.

Jen: Right.

Todd: Know we'll do your laundry for you, we'll give you a key card access. We'll provide all the snacks and drinks. We'll provide you with [00:22:00] to put all your stuff. We'll do this. We'll, we provide the cleaning,

Jen: Which

Todd: the software,

Jen: if you,

Todd: because when you add all that stuff up. You probably haven't priced your rent high enough 'cause you're trying to attract people

Jen: Yes. Okay.

Todd: away the farm.

Jen: And I think if you're trying to attract busy stylists that are professional and have a clientele, I would even go to say, like, for me, those things wouldn't be important to me. Cleanliness would be but I'm busy enough. I don't need to worry about all your fluff and buff stuff, but somebody who's not that busy, you're attracting them with those amenities, like that's what it is. I'm looking at how much do I have to pay you and what does my workspace look like and how do clean this place and does that all meet my standards? I don't need your free stuff.

Todd: For sure and we're definitely gonna see over. I've talked to a few people that have predicted this. I, I talked to a guy about six years ago and he said within five to 10 years this was a COO of a. I don't wanna name drop the company 'cause I just don't want [00:23:00] to, it was a popular it was a very popular unicorn hair company.

Jen: Yes.

Todd: COO that I spoke to about six years ago, and he said his prediction was within five to 10 years you were gonna see a slowdown and then a swing back towards commission salons becoming more popular than rental.

Jen: Mm-hmm.

Todd: And when I looked into it, I couldn't help but agree

Jen: Yeah.

Todd: what happened was commission salons were run so poorly because nobody wanted to change or innovate or. Move into 1995, let alone 2025. Let's be honest,

Jen: Yeah,

Todd: That's the

Jen: did it to themselves.

Todd: Yes. Commission salons became ultra poorly run.

Jen: Mm-hmm.

Todd: They just wanna control everything. You've gotta work Saturdays, you're not having days

Jen: Mm-hmm.

Todd: All this stuff. And so the rental model came along and said, we can fix that and good on them.

Jen: Yeah.

Todd: And then what happened was the rental [00:24:00] salons. started opening up and people would just kind of hop, right? So you see a bunch of people go to popular new booth rental salon that opened in your town, right? And anybody listening can see this. migrates there. Not everybody, but you know, it fills up then in like two years the buzz sort of wears off and a new place opens and that place is shinier.

So we'll all move there that that's what happens. And then. Because that happened. that don't understand business and how to, how to market their business and position themselves strategically we gotta start offering marketing. We gotta start offering software for everybody. We, we gotta do towel service, we've gotta expand our hours, we've gotta do all these things. And it was eating into their profits and now they're shooting themselves in the foot.

Jen: Mm-hmm.

Todd: So now you have half empty rental salons, and that's not doing anybody any good.

Jen: Right then they're struggling.

Todd: So [00:25:00] there's going to be a swing back towards commission, but I think what's gonna happen first is you're gonna see like a thinning of the herd. Because how many salons have we watched close over the last like two weeks,

Jen: Yeah.

Todd: groups,

Jen: Yeah,

Todd: my salon, trying to sell my salon, hate my salon. It's just constant. So what I think is you're gonna see a lot of commission salons close down. I don't want that to happen, but I do think it's gonna be good for everybody, unfortunately.

Jen: because the rebirth should be better.

Todd: correct. And then what's gonna happen is you're gonna have commissioned salons that are gonna go, let's not make those same mistakes again. Let's

Jen: Yeah.

Todd: what they want. Let's talk to these unquote, younger generations as human beings and not as a pain in the ass. Not as, they don't want to do anything.

They don't want to hand out business cards in the mall. Of course they don't, Susie, nobody wants to go to the mall and hand

Jen: No one should even have business cards.

Todd: That's the CST thing I've ever heard. This is not 1987 Wall Street. [00:26:00] Stop it.

Jen: then is not gonna work. Now, what works now is not gonna work either next year or the year after. You're always gonna have to evolve.

Todd: Exactly. And it's, it's not

Jen: It's constant.

Todd: Yes, correct. It's not just once. I was gonna say, so let's talk about some of the hidden sort of costs.

Jen: I love this. I think it's really I hope, hopefully really eyeopening for some people.

Todd: Yeah. And it's important to talk about this because a lot of people are like, well, I get I I'll make so much more money. might make more money if you're smart. You might make more money. I put might in quotes because we know people that have gone out on their own and they make less money than they would make at a good run commission salon. 'cause they don't push themselves, they don't challenge themselves. They aren't educating themselves.

Jen: And they're afraid.

Todd: their prices. Yeah. They're lowering [00:27:00] prices in a

Jen: Yep.

Todd: circumstances and it's, that becomes a race to the bottom and you're not marketing, so you're not constantly gaining new clients.

So when a client leaves, you're not replacing that client with a higher value client. The reason why you can make more money is because you're doing more work. the one now that's doing

Jen: All the jobs.

Todd: You are the one that's doing the marketing. You are the one that's replying to all the dms, all the emails, all the stuff that comes in. You are the one that's responsible for calls, and I probably just said that twice. I feel like I said that twice, you should be making more money because you should be getting paid for your time. So if you go from working 15 to 20 hours in a commission salon, because let's be realistic here, you go to working 50 hours for yourself, 80 hours for yourself.

Yeah, you should be

Jen: Mm-hmm. And the reason why sometimes you're not making more money is because you didn't account for the price of the software, the price of the accountant. You need to hire the price of the [00:28:00] lawyer. You need to hire the credit card fees that you're now absorbing.

Todd: I have the list. I'm just scrolling through my notes. All right, so. These aren't gonna apply to everybody. I have a huge list here and some, some of them will, I would say most of them will for any bi, anybody that's trying to actually run a business. But a lot of people are like probably gonna think they can ignore a lot of this stuff.

So you've got your rent, so you don't get to keep all your money. There's one chunk of gone, right?

Jen: Yes.

Todd: if the people know how to run an actual business, you likely have a security deposit. You're going to have to come up with, probably gonna have some sort of a fee for a key or an entry card or a fob or whatever. You are gonna be responsible for, I don't know all the states, but whatever licensing and permits that you need. I know in New Hampshire, is it just, you regularly licensed now? Used to have to be a separate,

Jen: Yeah. Now you don't.

Todd: so that [00:29:00] doesn't apply here in New Hampshire, but in some states that might apply. You used to have to have a separate license to rent. Any taxes that gonna incur, that's on you to pay, not the business. Now the anything that you're gonna need for your business,

Jen: Mm-hmm.

Todd: say you are upfitting a suite, I don't know what's included in all suites. Some of 'em are upfitted, some of them aren't. But if they're not, you're gonna need a mirror,

Jen: Mm-hmm.

Todd: maybe a stool. You're gonna need lighting shelving. You're probably gonna want some plants. You need a sign. Those are things that are gonna cost money. Tools and equipment. You're always responsible for your tools and equipment, but now you're responsible to have everything else that you need too. So if you need a towel warmer, you're responsible for that sanitation stuff.

You're now responsible for that. Build out. Probably gonna need some sort of bins. You're probably gonna need a fire extinguisher first aid kit eye wash kit. You are going to need whatever [00:30:00] extension cords. Hooks ties, things that you need, right? It's like when you buy a house,

Jen: Mm-hmm.

Todd: this empty space at first.

'cause you don't

Jen: Comes with nothing.

Todd: that you have to buy paper towels. Yeah.

Jen: Yeah.

Todd: on mom and dad anymore. Your initial inventory, so I know a lot of people skimp here and they're like, well, I'll just get every other color. I can

Jen: Mm-hmm.

Todd: and that's fine. You can do you, but you're gonna need all your back bar stuff, your color, your developers, bowls, brushes, foils, capes, gloves, towels any retail that you wanna stock, you are probably gonna want a website.

If you're running an actual business, there's a cost there. You've gotta purchase the domain. You've gotta pay to have the domain protected. It's not a lot of money, but this stuff adds up. You probably are gonna want a logo. You're probably not gonna be happy with the first logo. You're gonna have to tweak that logo that costs money.

Jen: True story.

Todd: You probably want, because it's really trendy to have some sort of branding photography done that costs money. You're looking at utilities. [00:31:00] Sometimes it's baked into the rent, sometimes it's not. But if it's not, you're looking at cam stuff like electricity, water, HVAC you probably need a phone line. Maybe it's included with the business. I don't know how that works, how the phone would be rung and then I have to go track down or not. Like I'm running around to a different suite. So I imagine you need a phone. Everyone works from their iPhone, but you should probably have a separate phone line dedicated to your business. You're going to need, excuse me, you're going to need insurance, right? So you need a professional liability for any sort of malpractice. You've messed up someone's hair. They sue you, you're protected. You don't have that, you're not protected. You need some sort of general liability. You need probably a property, equipment to protect your tools and stuff. What about business? Interruption insurance. What if the salon you work at cut some corners with their plumbing and the place floods and you can't work for three days [00:32:00] Software? You need booking, you need a way to take payments. You need, if it's not included, you'll need something for confirmations, whether that's text or email. You probably want some sort of email marketing or a CRM. That stuff can add up. That's expensive. You're gonna need accounting, bookkeeping, whether it's QuickBooks or whatever. You're gonna need some sort of cloud storage. You're gonna need some forms, E EOC signs or whatever. All that stuff adds up, right? Then you're paying for all the stuff you said, Jen. So you're processing fees, which are just an estimate. It's probably like 3 cents or 3%

Jen: Yeah.

Todd: like a few cents, 10 to 30 cents per

Jen: Yeah.

Todd: something like that. You've gotta work that into your pricing or else you're just paying out.

Jen: Mm-hmm.

Todd: We mentioned laundry, but what about cleaning? You need all of your wipes, mops. Rooms, [00:33:00] disinfectants, EPA. Make sure you make sure it's EPA. You need alcohol. If you're playing music publicly, you need yourself. A lot of people don't know that, so you need some sort of music license. Trust me, they will find you and they will come after you at some point. It took them years, but they found my gym and they came after me. So I learned about music licensing and I protected myself. Trash maybe. So this is gonna vary. I have no idea where you're located. If you're in a city, it's probably gonna be wildly different than us.

We, at our location, we have to pay for a dumpster. not included. So if I was a rental salon, I would have to pass that cost off to the renters,

Jen: Mm-hmm.

Todd: If you're in the city, you need to factor in any parking costs that you're going to have to come up with. All of your tax prep, your CPA, document reviews, all professional [00:34:00] services you're gonna need, you're gonna need to factor in.

And you would do this as a, I don't even know why I wrote, like scissor sharpening, but you would have to do that as, as a commission employee too, either way. And then education. This is a big one. How are you gonna educate yourself? That costs money. Often classes are expensive. Whether they're worth it or not is another whole conversation, but we can do that a different day. But you are probably not accumulating enough rapport with a distributor

Jen: Right?

Todd: boost rental level to get free education. So you need to

Jen: Have a fund for that.

Todd: have a, yeah, have a fund for that rainy day fund education fund. There's a, I still have a whole bunch of stuff, but I think you kind of get the point out there.

Jen: Yeah, it's a lot. It's a lot to think about. And the last thing you wanna do is be like, I'm gonna go do this, and you have no clue. And then you just keep getting hit day after day after day with different things [00:35:00] that you didn't think about. Remember, you still have to do hair, which makes hair way less fun when you're getting hit left and right and having to juggle business management while your next client's already here.

That's not, that's not what you're looking for. The more you set up all of these things before is now where you can go in and just do the hair. It's what we do at Hello With, we talk about all the time with our commission employees. Our goal for them is they just come in and get to be creative. They don't have to think about anything else and worry about anything else.

'cause we take care of everything and we take care of them and they see the value in that. You have nobody when you're on your own to take care of you but you, and it can be a lot.

Todd: For sure. I have a quick little checklist that I'm gonna give for people. If you wanna be a renter, I'm gonna give it to you. It's free,

Jen: Okay. It's free.

Todd: So I would ask yourself if you have. Maybe like a quarter, so like we'll say 12 to 16 weeks of expenses saved you need, that's [00:36:00] your operating expenses, right? And your rent put together. Why would you want to have that? need to have operating expenses saved so that you can avoid being the people on Facebook that are like, it's just so slow right now. What do I do? And then offer a bunch of discounts. Don't do that. Don't be that person. Put yourself in a position to be successful from the jump. You're already gonna have to deal with all the curve balls that come. Don't let money be one of them. Do not be surprised when you need money to run a business. Second thing I would ask yourself, are you 92? Close to a hundred percent booked with a loyal, loyal clientele right now. Next thing. Do you have any clue what your products cost per service, what your back bar percent should look like?

Jen: Very important.

Todd: If you don't know that you're going to lose money, you're just guessing. Next one, I have a pricing plan? Pricing plan needs [00:37:00] to factor in, increases, and it needs to factor in profit, so you have to figure that out and have that. If you're going to have a cancellation policy, ask yourself if you're actually gonna enforce it or if you're gonna be one of the people on Instagram.

That's just passive aggressive. Okay, next one. Have you priced out some of these things that you need? Insurance, software, taxes, whatever benefits you want? Are you saving money for retirement? Don't get stuck. that out now. And then are you able to keep up with the administration stuff or can you outsource it?

Which one can you afford to outsource it? If you're a hundred percent booked, loyal clientele, you have four months of savings saved up. You can probably afford to hire some people, so don't skip that because it's going to help you down the line or you're gonna have to do it, and it's probably [00:38:00] gonna be knows how many extra hours per week you're gonna work. If, if you don't know what you're doing, you're gonna work a lot more hours. 'cause you have to figure out what you're doing before you can actually do it. All right. Then the last one that I think is where people are, are struggling, that we talk to most. Do you have some sort of education or plan that gets you back into a community once in a while so that you don't just stagnate.

Jen: Mm-hmm.

Todd: That's all I got for a little

Jen: It was great. Super helpful.

Todd: Yeah, I hope it helps people. Our staff's probably all gonna quit now because I just gave them the. No, I, I, yeah, we can wrap up. We're going a little long, but I just, I don't think that people need to be fearful of rental or commission

Jen: I would agree. I.

Todd: I think one way or the other, like if, if you're in a rental situation and you are just like, commission's awful, you know, screw them, they're the worst. I think you're part of the [00:39:00] problem. And if you're in a commission salon or you own a commission salon and you are like, renting is killing the industry, you're part of the problem too. So you guys should get together and just be problems together.

Jen: Or find solutions.

Todd: for the rest of us that understand that any industry can can thrive and that competition is actually a good thing because it forces innovation well will be over here.

Being profitable

Jen: And running a commission slum where people wanna stay because

Todd: growing our teams.

Jen: they have a, a vision plan for their future and lots of goals.

Todd: somebody that rent that owns a suite

Jen: Yeah,

Todd: works for

Jen: yeah.

Todd: part-time.

Jen: Yes. We have a employee that rents one day a week somewhere and she's like, I'll never leave here 'cause I could never do what I do here on my own. So yeah, it's.

Todd: So it can be done is what you're saying.

Jen: Yeah,

Todd: So our business model proves that it can be done. Okay, cool. Get on our newsletter list if you want to. If you don't, I don't care. It doesn't affect me and [00:40:00] I'm just being funny.

Jen: that was funny.

Todd: I guess that's it. 'cause I gotta go.

Jen: Okay, have a great day.

Todd: All right. Bye everyone.

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