[AASM] Greedy Salon Owners: How Can They Take 50% of MY Money?

“At our salon, we’re all on commission. My boss tries to make us do cleaning and towels and reception work when we’re not with a client. We checked our wage statements and did the math and our checks always come out above minimum wage. She doesn’t charge product fees either, but she’s taking 50% of our money and she can’t afford an assistant, a receptionist, or a cleaning lady? We feel like we’re being asked to do menial chores because she’s greedy and wants to pocket the cash.”

Oh lord, I’m about to get all kinds of ugly with you and other professionals who think like you, but first, I’ll answer your question.

If you’re being classified appropriately (as an employee–not an independent contractor) and you’re being compensated at least the prevailing minimum wage when your paycheck is divided by the total hours you’ve worked in the pay period, then yes, your owner can ask you to do anything they need done. As a properly classified employee, you have an obligation to obey or forfeit your position.

You’re correct, though. If your salon owner is compensating you 50% of gross sales, paying her share of your employment taxes, and covering the cost of product, then NO, she likely CAN’T afford support staff to clean up after you while you sit on your precious hydraulic throne and screw around on Facebook, waiting for clients to arrive.

Why can’t she? Because 50% of gross sales is way too much to compensate, especially in such a high-overhead business.

I can’t help but take tremendous offense to your ignorance, even though your attitude is so very typical of salon professionals who have never owned or managed a salon. You’re completely unaware of and inexperienced with the costs of salon ownership. You simply don’t know any better, but you should. Since you don’t, I’ll help you figure it out.

First of all, know your place. You’re an employee of a business.

Nobody is taking 50% of your money. Your employer is compensating you 50% of her salon’s gross sales.

If you were to try to negotiate 50% of gross sales as compensation in any other industry, you would be laughed out of the interview. Every day, more salon owners are realizing that the compensation model we’re used to is not good for our businesses or our workers. Pretty soon, salon owners will also laugh you out of an interview for requesting such a high pay rate.

50% of gross sales as compensation is unsustainable. I do a lot of turnaround consulting for salon owners who learned this lesson the hard way. Salons are obscenely expensive to operate, so costs must be carefully managed. The highest cost, by far, is labor. Even when the salon owner structures compensation so that payroll doesn’t exceed 35% of gross sales, more work must be done to streamline the protocols, cut down product costs, and structure the service pricing achieve a healthy balance so the owner can pay the salon’s bills and–god forbid–make an actual profit.

Are “greedy salon owners” out there? You bet. (Those owners are the basis of 75% of this blog’s content.) Is yours one of them? I highly doubt it. For one, you’re compensated and classified legally. You’re not being charged fees and your hours are being tracked. You’re given detailed pay stubs. To me, this doesn’t indicate that your salon owner is some greedy slimeball squeezing you and your coworkers dry. She seems uninformed, inexperienced, and/or stupidly generous. (Has she been a stylist too? I’m willing to bet she has. Only other stylists find this compensation model acceptable.)

I’d love to have actual numbers from your salon owner so I could show you how silly your assumptions are, but here’s what I know for a fact: you are not a doctor or lawyer. Aside from beauty professionals, they’re the only workers who receive comparable compensation in relation to the prices charged for their services, and unlike us, many of them have invested nearly ten years of their lives to their education and are carrying hundreds of thousands in student loan debt.

Your qualifications and talents, however impressive they may be, do not justify 50% of gross sales. Period.

For those of you who are new to this blog, let me make this clear: I have been in this industry for fifteen years. I’ve worked as an employee, a booth renter, a manager, and a salon owner. I’ve been a salon management consultant for three years now and have brought salons back from the brink of failure. I went to beauty school just like you did. I did my 1,500 hours, earned my license, and have taken over a thousand hours of continuing education since. My qualifications and experience are far above and beyond average. I’m not trying to belittle you or disparage our education, our skills, or our profession. Even with all my qualifications, I do not deserve 50% of gross sales as compensation, not even when I function as a full-time salon manager. That expectation is absolutely absurd. The beauty profession doesn’t have high barriers to entry, so as workers in general, we’re just not valuable enough to demand that much from a business in compensation when our initial investment is considered.

The salon owner who is “pocketing that cash” is also paying all the bills and assuming all the risks of business ownership. You see her sitting in her office replying to emails, running errands, and going to lunch with your color distributor. She comes in late sometimes and leaves early some Saturdays. You see these things and think she’s living the life, but here’s what you didn’t see:

  • You didn’t see her working 60 hour weeks for 2+ years to save up enough money for the salon you’re working in.
  • You didn’t see her hand shaking when she signed the five-year lease.
  • You didn’t see the look on her face when she’d wake up in the middle of the night in a cold sweat, wondering if she’d ever make enough money to repay the loan for the stations you don’t want to wipe down, the washer/dryer unit you avoid using, the floor tiles you refuse to sweep, and the reception desk you refuse to sit at in your down time.
  • You didn’t see her walking through the half-built salon in a hard-hat, staring at the framed in walls and exposed wiring, wondering if she was in way over her head.
  • You didn’t see her on her hands and knees, installing the flooring herself so she could put more money toward the break room you and your coworkers sit around and bitch in while arguing over how she’s spending “your” money.
  • You didn’t see her signing checks for attorneys, insurance companies, architects, plumbers, product distributors, accountants, regulatory agencies, and the ten thousand other professionals she had to pay to make your workplace happen.
  • You didn’t see her crying over her stack of bills during that first shaky year, watching her savings dry up and her line of credit max out before the salon got off the ground.
  • You don’t see her writing your paychecks before she can even think about writing her own.
  • You don’t see her liability–the risk she takes every day by entrusting you and your ungrateful coworkers with real, live clients.

You saw none of that overwhelmingly stressful, complicated process–nor did you aid her in it–and yet you think you know it all and deserve it all. You think you deserve more than what your employer earns, despite having done none of the work she did.

You come with a sense of entitlement, claiming ownership of something that isn’t yours.

When you’re an employee, the fruits of your labor don’t belong to you; they belong to the business. It’s up to your employer to determine how much to compensate you in return, and your employer is paying you too damn much. If you had a single clue how much time, effort, and stress went into establishing and managing a salon, you’d realize just how wrong you are.

Salon owners absolutely deserve to see a profit from their investment. How dare you begrudge your employer for expecting to reap a reward from her efforts?

Your salon owner didn’t open a charity. She opened a business. The expectation was that it would eventually pay off.

Nobody opens an establishment just to gift you a place to earn a living.

The only time you have a right to get angry about “your money” is if the money being taken is actually yours. When salon owners steal your wages, get pissed. When they’re late delivering your paycheck, rage out. When your employer misclassifies you and doesn’t compensate you the prevailing wage you’re entitled to, set the world on fire.

I’ll be right behind you–the Eminem to your Dr. Dre–with a can full of gas and a hand full of matches–but in this instance, you are dead wrong.

…but let’s talk about that receptionist/assistant you think your employer should provide to you so you and your coworkers don’t have to fold towels or answer phones. We’ll do some math. You’re making 50% of gross sales. Since your owner pays her share of your employment tax, she’s actually paying 57.25% to you, right off the top. If you live in a state that charges a state income tax, go ahead and tack that on there. That’s coming out of her chunk of “your money” too.

Then there’s rent, insurance, product, marketing, accounting, commercial banking, web hosting, utilities, internet, and probably a loan payment or two she has to make every month to keep the doors open before she can even consider taking home a profit. Those costs I just listed might not sound like a lot, but believe me, they are, and those are just the tip of the iceberg. Salon software systems alone average $80+ per month, and if she’s taking credit cards, she’s paying fees on every single transaction.

On top of all that, any amount she brings home is reduced by 15.3% (if she’s registered as a sole prop or an LLC). She’s self-employed. Nobody pays her federal employment taxes, so the full amount comes right out of her pay. Again, this is assuming you live in a state with no state income tax. (If you don’t, she’s paying the entirety of that herself too.)

A support employee (like an assistant or receptionist) isn’t capable of generating any real income. They’re hired to help increase the productivity of the high-performing professionals by taking care of menial tasks so high-performing professionals can focus on cranking out their services (which are usually priced higher to account for their demand and superior skill).

The fact that you have “downtime” tells me you aren’t a high-performing professional.

You’re not capable of generating enough income to justify an assistant. At the very minimum, working full-time under the federal minimum wage, this assistant would cost your employer $21,000 per year. That’s at the absolute, bare minimum.

Can the 42.75% of “your” money support that salary and the salon’s expenses? I highly doubt it. In fact, I can virtually guarantee that it can’t.

Many of the salon owners whose salon finances I’ve restructured are barely making minimum wage.

Without seeing your salon owner’s financials, I can’t say for sure that she’s one of those owners who would probably be earning more as a manager at Target or Victoria’s Secret, but there’s a pretty good chance that’s the case. Even if it weren’t, there’s a lot more that goes into salon ownership than you realize, and you have the nerve to talk about “your” money?

Stop it. Just, stop. If you think you can do better than your boss can, go open your own salon. You wouldn’t be the first to do just that and you wouldn’t be the first to fail within the first year with a new appreciation for what salon owners actually go through.

Don’t criticize your employer until you’ve been where she is.

I’ve been there myself. Now, I stand beside owners through all phases of their startup and turnaround projects. If you had the same breadth of experience, those childish assumptions you have about your “greedy” salon owner would evaporate with your profound ignorance.


Hi there. If you’re new to this blog and this post is the first article of mine you’ve ever read, get familiar with my content before bashing out your hate mail to me. Typically, I advocate for exploited beauty professionals, but I don’t play favorites. I call it like I see it, whether you like it or not.

It is my sincere belief that salon owners need to take ownership of their salons and manage them appropriately. That means paying your workers a wage they can actually survive on, compensating them for their time (not just their services), classifying them appropriately, providing them with benefits, and doing your job as an employer by marketing the salon, staffing it strategically, and owning your responsibilities.

Professionals, you have to know your rights and be willing to enforce the laws that are designed to protect you from exploitative owners. You also need to understand what you’re legally entitled to and what you aren’t.

This blog is full of information–300+ articles (most of them super long, like this one) full of linked references and informative comments. Dig in. Go through the archives in the sidebar or hit up the search bar. Go crazy.

If you like books, I wrote one that you can buy here. Like this blog’s page on Facebook or subscribe via email if you don’t wanna miss a thing. (Also, I sometimes link completely random, unrelated things. You’ll have to get used to that.)

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89 Responses

      1. Omg.. I just read your article. I relate to EVEYTHING YOU SAID. It brought me to tears thinking of all the struggles I went through in my first year. I’m now in my 7th year. Someone reposted on our dog grooming entrepreneurs FB group page. Sadly, this is a common subject of discussion about paying commission vs hourly. Unfortunately our industry’s schools teaches that once they graduate they can open there own shop, I worked 15 years before I opened my own. These kids have this sense of entitlement and have no clue of all the things and money needed to open and keep a business open. When they realize that they actually need to spend money on advertising and other things to start a business they look for a job.. which there is a enormous amount of shops looking since all the graduates are working in there garage. Most owners are giving over 50%. It’s actually very hard go keep a dog groomer happy for less that 55%. It is a vicious cycle that our industry in and I hate it. I wish there was a law that forces us to pay hourly wages. In live in Ontario Canada minimum wage is $15 and is going up in January

        1. Well said. This applies to the grooming industry as well. In the end, it seems easier to work all by myself and just limit how many clients I take on. Employees just dont get it. And of course… I seem to have to learn the hard way!

  1. Being honest, didn’t read the whole article because I needed to ask this question. My salon owner pays me 40% commission and asks me to help clean(which I don’t mind doing) but pays me as a 1099.

    1. Okay, so that is a.) NOT OKAY and b.) illegal. Read this post and this post. You might also want to use the search bar to find articles related to “independent contractor” and read what comes up. (I’ve written far too much on this topic to link all of it here.)

      My bitch switch is flipped in this post because this salon owner is in compliance with federal wage and tax laws, the employees understood the terms of their employment when they were hired, and they’re trying to tell a salon owner how to run her business when they don’t have a damn clue what her expenses or her investment look like. Your situation is far different. You’re getting hosed by a crappy owner.

    2. So if
      Your an independent contractor you don’t have to clean your station after
      Your done with your client? Just because you’re an independent contractor doesn’t mean that there can’t be any rules within the company that you’re contracting for. An independent contractor does not mean that they can just do whatever they feel like doing and not have any responsibilities of cleaning up after themselves. Or having certain obligations that are found in their contract.

      1. True independent contractors are freelancers. Let’s pretend this classification is being utilized the proper way. A hair salon owner (whose salon doesn’t ever offer makeup application services) contracts a local MUA for a special, one-time bridal event. Assuming they’re not a slob, the MUA would very likely break down and clean up the area they used without the contract needing to state so. She would not be responsible for cleaning the salon owner’s bathrooms, tidying the reception area, or mopping the floors. However, the classification is rarely, if ever, used properly. Instead, salon owners are classifying their employees as “independent contractors” and putting them on chore rotations or assigning them cleaning duties they have no right to assign. Business owners who want to control workers have to employ those workers.

  2. Yesss!! When I had my salon (operative word HAD) I paid between 52-56% commission. No product charge and sliding scale on retail. I managed to tread water for 9 years. Robbing Peter to pay Paul, taking out home equity loans, not taking paychecks for myself. I had to close. I gave the staff 2 weeks notice which is more than most people ever gave me. I lost my friends and had my professional reputation squashed in matter of days. It’s been 4 years later and I I finally paid off the last of the debt from the salon. I’m a hairdresser. I paid people the way I wanted to be paid. It doesn’t work!! Thank you for trying to inform and educate.

    1. “I pay people the way I wanted to be paid.”
      Almost every time I see 50%+ commission, that’s the owner’s reasoning for it. 🙁

  3. Well said!!! As a salon owner I want to say thank you. I see so many employees especially the ones fresh out of school with this attitude. They don’t realize that many of us work the most hours behind the chair and the desk and take home the least amount of money. Your blog and consultations with Jamie have turned my thinking around and I am learning how to make a real profit. Thank you!!

  4. This is a perfect description of salon ownership. Educate on!!! Hopefully all will come around to the idea that salons are businesses – just like any other business out there! 50% commission is a door closing number.

  5. I love you
    Where were you 20 years ago when I had a bunch of crappy employees who never got any of this.
    Keep up the good fight!

  6. I love your blog! I discovered it a few months ago and I find your content extremely beneficial to employees, employers and self employed individuals. We never learn the facts of the industry in school, only through experience! I bet you get quite a bit of hate mail, but honestly.. you are just speaking truth and for the people like myself who are willing to learn, this is great!! I am currently a self-employed eyebrow specialist from Montreal looking to build my own brand and expand my business eventually. Just by reading your content has definitely been an eye opener for me! Thank you for your knowledge you are willing to share!! It’s greatly appreciated!

    1. Lol, shockingly, I really don’t get much hate mail at all. I’ve received a few bitchy comments, but usually those people chill out once I explain my reasoning to them. (Some don’t, but screw them anyway.)

      I don’t know a whole lot about Canada, but I do have a consulting client in Toronto and your taxes there are insane, even by US standards. I don’t envy Canadian salon owners one bit. That’s a rough road to travel, for sure. I wish you super good luck! 🙂

      1. Thats just it! Even though things are slightly different here in Canada, I still find your blog informative in general to understand the “what not to do’s”. Thanks for replying!

  7. You rock, Tina. Thank you for scaring the crap of me a number of months ago, communicating back and forth with me privately, and helping me transition from incorrectly classified 1099 contractors to employees as of almost 2 months ago. I wasn’t a crappy owner…. paid $10 – $13 per hour to my employees plus tips… but still. It feels good to be “legal.”

    When I first started reading your blog, I ignorantly thought your comments/perspective were too slanted towards the employees rather than the owners. Of course I figured out after reading further I was mistaken, but this article… this article… shows that you “get it.” It could not have been written better. This shows exactly what an owner goes through, and I’m going to have all current and future employees read it. Already printed it out.

    Nobody complains around here, but if they ever do, I might just say, “stop your damn bitching,” and throw this email at them. 🙂 Thanks Tina!!!!!

    1. Thank you! I’m so glad I could help! I know a lot of people make that assumption, usually because they haven’t read much else. So I either hear, “You’re too slanted in favor of employers,” or “You’re too biased in favor of employees.” In those cases, I just point them to the posts where I’ve bashed up on the person they falsely believe I’m in favor of. Lol, I don’t play favorites. Everyone pisses me off equally.

  8. Tina, I would love to hear your input on a spa owner that pays their independent contractors 50% of the service that does NOT expect them to be there if they have no clients coming in. They do answer the phones, and sell gift certificates at the front desk if they happen to be between clients but receive a 1099? They also do their own laundry.

  9. Very interesting article. I’ve been feeling like I have been getting the short end of the stick, even though I know in my heart and logical brain that a lot goes into owning a business and I’m very glad to not have to
    deal with some of those stresses. So as an esthetician who gets paid commission from a small business owner, what is the next step after changing your attitude if you still feel dissatisfied and want to make more money?

    1. The first step, if you want a raise, is to inform the owner that they need to be raising prices annually. If they worked their numbers correctly, there should be plenty of room in their budget for moderate pay increases every year. Unfortunately, too many salon owners don’t understand their costs or how to balance their service prices to offset them, so if that hasn’t been done, the owner can find themselves and their business in a perpetual state of struggle.

  10. Wow AMEN GIRL THANK YOU FOR THIS!!! Brought tears to my eyes…a great reminder for how much I do put in to my biz. The struggle is real!

  11. I found this article in a roundabout way, and although I own a dog grooming salon, not a human one, it’s the same damn situation. Loved your article, and can’t thank you enough for writing every single word!!

  12. Agree with every single word! If you think you are so smart, go ahead and be your own boss. Then watch all the bills you had no idea about – rent, insurance, utilities, supplies, repairs, various licenses, etc. – accumulate and eat into “your” money.
    I am a dog groomer and we have same problem in the industry – groomers often expect 50-60% commissions, wich is not sustainable for the employer, if done right (and not as incorrectly classified ICs). And more and more grooming salon owners/employers switch to salary.

    1. That’s the best way to do it. Our workers deserve to be paid for their skills and their time, but the business can’t support 50-60%. I know a lot of people glamorize ownership. I’m not one of them. The first appointment with my consulting clients is spent telling them that salon ownership is NOTHING like their fantasies of it, lol.

      1. It’s funny, because this industry has a lot in common with the dog grooming industry in terms of very similar labor abuses. 😀

  13. A big thank you, from a pet grooming industry insider. We deal with many if not all, the same issues…. misclassified employees, the 50%+ compensation expectation, owners making less than their employees, and on and on it goes. This article does a wonderful job of summing up the frustrations of ownership, while acknowledging the owner’s responsibilities… one of those I wish I’d written… I’ll just share yours instead!
    Thank you again

  14. Currently in the industry 5+ years as an esthetician, currently only making 38% with zero raise (nothing has been offered) and as of a year and a half ago she started to take an additional $10 off every client to pay for a spa attendant and over head so now if I do a facial at $75 I’ll only make 38% of $65.
    When I did bring up at the meeting we recently had (our attendant isn’t setting up the rooms at all or even stocking) she made a point to say this is a regular practice at many salons. So my question really is, am I getting screwed?

    1. You are TOTALLY getting screwed. Legally, you’re required to be paid at least the prevailing wage. In most states, those kinds of wage deductions aren’t legal, especially if you were hired under the assumption that you’d be making 38% of gross sales. Read this post. Then, read this one.

      1. Tina, I cannot thank you enough for all of your insight. You’re an asset in this industry! I will read everything tonight.

          1. Today I put notice in, I let them know I was offered something better (which is true) and of course they fired me on the spot. (No surprise)
            I just want to thank you for opening my eyes to the injustice that’s been going on and the confidence to leave what may have been the most abusive relationship I have ever been in.

  15. I talked to you via email several years ago when I was the “IC manager” of one location of a grooming salon chain. I knew all the ways it was illegal, but you fired me up and gave me the confidence I needed to change my situation. Thank you!
    Now I’m the owner of my own salon, with one assistant, and successful enough to *almost* need to hire another groomer. Unfortunately, most pet groomers in my city don’t have a following of loyal clientele, so I would need to somehow bring in at least 6 more dogs per day (in addition to the 12 I do) to make it profitable. It’s such a conundrum, I just want to be able to take some time off, a vacatiom with the kids, and not have to shut my salon down for the week.

    1. That is SO awesome! I’m glad I could help! The first year or two is the hardest for any business. It takes time to establish your reputation in the area and get the word out to people that you exist. Once you get through that rough, shaky first year, it should be smooth sailing.

  16. Tina, I really needed this ‘motivational’ article at this time. Thank you so much. I am a new salon owner and unable to meet the salon expense. I will try to rework my numbers. In VA we have state taxes as well.
    Love your site!

  17. Thank you for this article! It applies so beautifully to not just the human beauty world, but the pet grooming world as well. Great advice for any business owner looking to start hiring!

  18. The problem with this industry is that the salon’s prices are often out of wack. I know a nail tech who works in a salon where they charge $28 for 1 hr pedicures. Great, you think… you get 50% commission and that’s $14 right? Not so fast. The minimum wage here is $11.25. You are getting this $14 IF you are booked 100% every single day you are at the salon. If your booking rate is 70% guess what…. that $14/hr becomes about $9 – which is less then minimum wage. If you only did 4 pedicures and sat at the salon for 8 hours…. you made $7/hour!!!!! That’s why often employees want higher commission when the problem lies in pricing. If that tech wants that $14/hr the salon should be charging/making at least $42/hr but in reality closer to $50….. not $28!!
    That’s why techs have to rely on tips to survive… because pricing is too low.

    1. In the U.S., several states have passed laws that allow the salon owner to claim employee tips if they’re taking a tip credit and are in compliance with the prevailing wage laws. I’ll be writing more about that this week, but it’s sure to cause a huge upset in the industry down here in the southern states where this shit was passed. I’ve always hated the idea of tipping, so we’ll see how this shakes things up here.

      1. Very interesting!! I’m actually baffled how the government allows that. It’s actually “better” for the salon to charge less, so the sales tax is lower and pay employees very little and the clients pay the employee the “rest”. The tip is not taxable- I’m talking sales tax (so the taxes from a huge industries beauty/restaurant) and from what I hear (I personally have “no tipping” policy) that majority of service providers AND servers do not claim the tips as income. I’m very surprised that the government (IRS or Revenue Canada) turns a blind eye. Sales tax here in Ontario is 13% so we are talking millions and millions.

        1. Our IRS only turns a blind eye if your income is really too low to be considered worth the effort to pursue. However, if they catch on that you’re stashing nearly 20% of your income when you’re a higher-performing professional, they’ll come down on you hard. If you’re an owner, forget it, your life is over. They’ll take everything from you if you’re found guilty of tax evasion and worker exploitation. We’re talking hundreds of thousands of dollars and every agency with jurisdiction (state, federal, and city/municipality) collaborating to punish you.

  19. So what are your suggestions for talking to employees on lowering their commission? At the current rate of 45%, after I pay the taxes, state and federal, my payroll expenses still total almost 70% of the shop gross and this just is not sustainable. That includes the assistants who get paid hourly and myself who gets a salary( 30,000). I just don’t know where to cut corners.

    1. That’s insanely expensive. Honestly, my recommendation is to lay out your expenses and income. I share P&L’s in those situations so they can see that the salon is losing and will fail if changes aren’t made immediately. Anyone who can’t understand the importance of those decisions and would rather run you out of business (and bleed your establishment dry) doesn’t belong there. I don’t recommend lowering commission–I recommend eliminating it. I specialize in payroll structuring. My preferred compensation system for salons is base hourly wages, plus tiered commission bonuses based on performance. Not 40%, 50%, or more. Commissions for most of the salons I structure start at 3-5%, and those bonuses are contingent on employees hitting sales goals, just like in any other sales-based industry. (For example, in advertising and software sales, employees are paid hourly and their commissions are extremely low–if they don’t hit their goals, they don’t make commission at all.) The payroll should be structured so that it never exceeds 35% of gross sales at any time, but what I nearly ALWAYS find is that business owners also don’t have a firm grasp on their budget. They don’t know where their money is going because they’re not paying attention. To make things worse, they usually pull their service prices out of their ass instead of actually calculating it based on their overhead. Unless all of those things are evaluated and balanced, the salon’s finances will never be right.

  20. First let me say I think you are truly on point and refreshingly honest!! I mange a salon for my boss who owns many. He has seen a slow but steady increase in the business since the team of ladies work well together “BUT” one bad apple who states she is paid “ILLegally” mind you if she isn’t outside smoking and fighting on her cell phone she’s coming in late and or leaving early oh and yes calling out….. He does pay 40%commission (and you never wait on a check!) and we receive a w2…I believe we are the lucky ones who get to say we have a job in this economy and do what we so love to do for a career … This bad apple has been let go and then he feels bad and gives her another chance..I believe this is his poor decision but I guess everyone needs a break somewhere..

  21. Love this very important blog!
    You’re very informative and with reading your content, I will have a great understanding on what it takes to be successful!
    Thanks Tina

  22. So.. question.

    I work at a salon in Oregon. I make 40% commission on services, or hourly wage, depending on which is higher. I recently found out that I’m receiving a 10% deduction on my color services for backbar fees. Apparently thats standard and a few salons do the same thing. So I make 40% on any services that aren’t color services and 30% on my color services, and the other 10% goes to overhead (as the overhead is expensive, understandably). I want to understand from the salon owners point of view, but I just am having a heck of a time figuring it all out. Is it legal? Is it okay? Oy.

    1. Wait, the 10% came out of *your* commission? If the 10% came off the top of the sale, that’s legal. (The owner likely set prices knowing her costs and that 10% is reflective of the additional costs she had to inflate the price by to cover them.) If it came out of your portion of the commission, it’s not legal, it’s wage theft.

  23. Hello, I have been working at a salon for about 5 years. I love it. I have a full cliental and the girls I work with are great. Now I am the only one out of the five years that have stayed through thick and thin. I clean, I get specials I am the busiest and I do inventory and training for new girls. I am the only on in the salon that does EVERYTHING. from hair, nails facials, waxing, extensions, makeup and up styles. I am at 38% and have been there since I have started. There are 3 new girls in the salon all part time with less cliental and only do the things they are comfortable doing. they are 40 and 50 %. last year I have asked for a raise, the owner denied me. Saying ” I need to make 854 a week to be getting 40%. ” I work 4-5 days with full books now and max out at 3500 a month. now I did ask about browsed around and found out all three stylist make less then I with a higher commission. I am hurt and frustrated that I have done everything I can for the salon and I am the least paid. please I need help I am struggling to find out what I should do and go about it.

    1. Ugh. Her compensation structure is a hot mess. If I were you, I’d encourage her to move away from the commission-only system and move to something better for the salon and for you–a base hourly rate with commission bonuses based on performance. This ensures you get compensated in a way that rewards your seniority and the extra responsibilities you take on (you would make a higher hourly wage than the others), and rewards performance appropriately by requiring everyone to hit goals before commission bonuses are awarded. (You, clearly, would have no problem hitting the higher tiers, so your commission rate would be higher than those who can’t keep up with your performance.)

      Seriously, that structure sucks and it’s not benefiting anyone–least of all the salon. I recommend searching my site for the posts about compensation and maybe sending her some of them so she can read for herself why her system is garbage.

      1. Hi Tina, thank you for your advise. I had a meeting with the owner and it didn’t go so well. So I did my research on your sit and he shot me down on every option I was trying to negotiate with him. He said no to the raise I asked for, telling me I don’t deserve it, yet no one meets his numbers and they get paid more then me. They are not as busy either. He blamed me for not having enough hours yet I am the one that works most there. AND I train and do the inventory. After all I do and the 5 years I have put into my salon. It is everything to me and he just keeps shooting me down. please I am loosing my mind. I have loyal clients and I know they will follow, should I find a new salon ( I am scared to death ) but I am great at what I do and I am the only one there that performs all the services. and to be having such a problem financially. i know I am worth more then this. I am sorry, but I don’t have any one to talk to about this.
        thank you for your time

        1. Whether or not it’s time to leave is definitely something you should carefully consider.

          Factors you need to weigh include:
          Did you sign any employment agreements? If so, what do they say?
          Did you sign a non-solicitation agreement? If so, were you appropriately classified as an employee (not an independent contractor) and is the non-solicitation enforceable?
          Can you find another position soon?
          Will your clients follow you?
          How soon can you rebuild to make up for client loss?

          If I were you, I’d leave, but I can only speak for myself because I know my work ethic, my ability to rebuild, and the strength of my resume. Ultimately, this decision will be up to you, but I’m sure that if you compare your other options, you’ll certainly find a better place to bring your skills.

  24. Hi,
    I bought an existing business where the comission structures were already set. For employees I have hired since I took over I pay hourly/comission. The existing employees; however get anywhere from 50%-60% comission and it’s killing me. Can I change them to hourly + comission do you think? They have all been working in this location for a few years. I’m scared they will leave.

    1. You absolutely can, but approach it from an honest standpoint. I’ll be writing a post about this topic that’ll be going up next Friday, but for now, here are the footnotes:

      1.) Be okay with letting them go. They might refuse the new structure, and that’s okay. They have their bills and their lifestyles to maintain and you have nothing to do with any of that. Have letters of recommendation ready for them and give them the opportunity to stay for the 2 weeks before the deadline.
      2.) Be honest. Let them know the system isn’t sustainable and why. You didn’t go into business to break even or operate at a loss. You aren’t going to take a loss to gift them with employment. The business has to be profitable or you’ll lose incentive to keep it open and everyone will lose their jobs. You don’t want that. The previous owner made a serious error in how they structured payroll and now it falls to you to correct it. It’s unfortunate, but it has to be done.
      3.) Be positive. Come prepared to this meeting with a list of ways this switch will benefit them. Generally, this means coming up with perks and benefits that you couldn’t previously afford under the prior structure. The benefits can include things like continuing education, trade show trips, tuition reimbursement for advanced training, health care, paid time off, etc.

      If a change has to be made, it has to be made. Losing them may be hard in the short-term, but bleeding money isn’t acceptable or something you can be expected to continue to allow.

  25. As I read this article, I’m somewhat considering whether I want to further follow this blog. First this is written from one perspective and that of a salon owner. Answer me why we should pay a salon owner 50% of what we earn when we bring the skills and the talent, most want you to bring the customers and the products and do everything to market them then leave them your built clientele when you leave. Why? We can all go out and rent a building. Make it look pretty. But where would you be with all you provide without any of the talent in your business?? No where. You’d be broke. Completely. Because you could live your dream without us. Period. That’s why we deserve 50% and even more. Unless you’re providing these things you don’t provide the core necessities of your business at the end of the day.

    1. I’ve already explained in this post that you are not “paying a salon owner 50% of what you earn,” when you are an employee. I dare you to open a business and compensate your workers 50% (or even more!) of your gross sales. See how far that gets you.

      Also, I urge you to read other posts on this page before you make any judgments about it or me. Most posts here are pro-worker, but on this issue, your lack of experience and complete ignorance about the tremendous costs of running a business are showing. Simply put: you’re wrong.

      You think it’s so easy? You think 50% (or more) is sustainable compensation? Lol. Go out and give it a shot. Let us know how that goes.

  26. This article is interesting. You have made plenty of valid points. As I was reading this I couldn’t help but be constantly reminded of the last salon owner I worked for. She was 22 and had zero experience in the salon/beauty industry. She just knew she liked blowouts, told her daddy and BOOM she’s an instant salon owner. Challenging is an understatement to describe what working for her was like. With that being said more and more women and young girls are opening salons while having no business background or industry experience. I stayed for 2 years through minimum wage in Ohio starting at $9.50 an hour, moving up to lead stylist (by default because the turnover rate was building steadily) and eventually manager at $14 an hour. I worked 9/10 hours days with blowouts scheduled every hour on the hour. I watched so many great stylist leave and yet I stayed. Then came the last straw, I became certified in DreamCatcher Hair Extensions. It’s hard to shock me anymore after 10 years in this industry but imagine my disposition when I learned she planned on continuing her hourly pay plan! On a 300$ service I stood to make $28/32? When I managed to get these words out of my mouth she fired back with “you’ll get good tips” uhhhh…. No. That is greedy. It’s also unrealistic and unfair and insulting. In 2 years she hadn’t learned a damn thing. As the manager I had weekly meetings with her. She overstocked the refrigerator with lacroix, all sodas, water, and an expensive mix of white and red wines. She had someone swifer the floor every hour and she carried an overstock of Pureology products that became impossible to get stylists to move. Her commission on products was 10% but you couldn’t even achieve that until you fulfilled your obligation to sell $1000 of products. Is this greedy or is there another word for it? On the bright side I was able to realize that booth rental wasn’t something so far out of my reach. She pushed me. Out the door. I couldn’t be happier to manage only 1 person!

    1. WHAT?! Okay, so this is what I recommend salon owners do for stylists that seek advanced education and certifications that add value to their salon:
      1.) Hourly pay bump. Immediately.
      2.) Job title change from “stylist” to “extensionist” or “hair extension specialist.”
      3.) Marketing push–advertising both the new services and recognizing the initiative of the stylist who attained the certification.
      4.) Establish commission scales specifically for extension services and commission on hair sales.

      Yes, she was being greedy and she wasn’t learning from her mistakes. The only thing owners like that are really good for is helping you recognize your own abilities. I call it the, “If this idiot can do it, so can I” effect, lol.

  27. After a recent staff meeting we were all directed to read and initial your article on “Greedy salon owners ” I was at first offended by the overall content of what I read. There was no name on it and I researched it myself….I found in reading your ENTIRE blog that we were given only exerts and the negatives of being an employee. I was intrigued that I had to go further after reading the ENTIRE article. You see, we are all 1099 but treated as employees….we have schedule to follow, chores to do and are compelled to attend staff meetings. I work 50+ hours a week, I carry a full book and expected to clean, answer phone, laundry etc. I don’t mind any of this if I’m not busy but there are times that I finish with clients at 9 or 10 in the evening and still clean up…..

    1. Omg, wait–your salon owner sent you to this article on THIS blog while you were misclassified?! LOL! This article refers to salon owners who are in compliance. That means their employees are legally classified as such (W-2) and compensated in accordance with the FLSA (the prevailing wage plus applicable overtime). If you’re neither, it doesn’t have anything to do with you or your coworkers. You aren’t an employee. If you’re supposedly “self-employed,” you’re a renter. That means you run your own business entirely. I have loads of articles about what your rights are, but it sounds like you’ve done some reading around already. If you need me to point you at some specific posts, let me know and I’ll link some for you.

  28. Oh my, that was so dead on! I need your guidance!! I just received the keys to my very own spa! It all happened so fast and I have been working constantly, not just with clients but paperwork and getting involved in the community. Do you have any suggestions on where to find guidance? Is there anyone to hire to go through a spa to make sure it’s all compliant? Thank you so much!

    1. Hi Mindy! I specialize in designing compliant systems and employment policies. I’m busy trying to get my salons through the holidays and tourist season, so I’m not really taking consulting clients right now, but if you email me at [email protected] I can make some time.

  29. Question….My daughter works at a salon and has a 40/60 split and the salon owner also keeps 50% of her tips. Is this typical within the industry?

  30. Hello,
    I am approaching my 1 yr. anniversary as a salon owner, and everything you touched on is not only 100% accurate, but also something that is not discussed openly like it should be. Instead, we bottle all of these unbelievably stressful worries and resposabilities inside, while we’re told almost weekly by clients, friends, and family, ” Wow, you’re SO BUSY, you must be really making a lot of money.” During the hard times, it can be very lonely , knowing that you don’t have anyone that you can really lean on. You go to sleep thinking about that for the first time in your life, you have basically two mortgages, bills, loans, and debt that you have never had, not to mention your business relies on your service income . You’ve created this beautiful oasis of space that people are able to go to and leave feeling renewed. It’s a newborn baby that becomes your pride and joy.
    Your blog stood out to me because I just had a recent experience with an employee( yes, employee) that started out so great ,that I thought she was one of the motivated one’s. She was not, but she did take advantage of my generosity and giving her flexibility of her schedule. She made horribly unfair and inaccurate accusations ,to which I did not respond ( thank god).After she left, I felt angry and lied to , but I learned what I did wrong initially . Someone great came along shortly after and I’ve moved on. Being a salon business owner is nothing like people believe it to be. It’s not vacations and telling people what to do. Sometimes, it’s not being paid at all in order for employees to be paid, or supplies to be ordered, or etc…No one wants to end up there but that’s the reality that happens too often to many.

    1. After working as a salon manager for stressed out salon owners for over 10 years, I knew I never, EVER wanted to be a salon owner–but then I inherited the salon I managed from the owner. Every professional who calls me to talk about their ownership aspirations gets a full earful of the realities of salon ownership. It’s so incredibly important to understand what you’re getting into, because it really is nothing like what people assume it’s like.

  31. ALL. OF. THIS!!!

    Thank you for this article and being clear and precise of the actual costs of owning/managing a salon. As a owner/stylist, being honest and fair to our employees sets all of us up for success and real talk! I want all that work with me to earn and grow without sacrificing the salons future. Knowing the numbers makes this ownership thing easier to contend with. We are here to make a profit not bleed out.

    Thank you for work for our industry.

  32. I have been a commission salon and spa owner of a beautiful 8500 sa.ft., strong brand, multiple Salon Top 200 salon winner multiple times facility in my area for more than 27 years. All I can say is DITTO…DITTO…DITTO and DITTO! It should be required education in beauty schools to teach Salon and Spa Ownership, Booth Renting and Suite Rental 101 before graduating! Periodically I go into my local schools to teach this very thing. They don’t have a clue! Thank you again!

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