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Career Development

Booth Rent vs Commission: Complete Guide

Detailed comparison of booth rental vs commission pay. Financial breakdown, pros and cons, and which is better for your situation.

One of the biggest career decisions in beauty: booth rent or commission? Here's the complete financial and lifestyle comparison.

## Commission Model

### How It Works
- You're an employee or contractor
- Salon provides space, supplies, marketing, front desk
- You earn 40-60% of services (plus tips)
- Salon handles booking, inventory, cleaning

### Pros
- Steady paycheck (if guaranteed minimum)
- No overhead or business expenses
- Marketing and location provided
- Front desk handles booking
- Supplies provided
- Easier to start, less risk
- Can walk away anytime

### Cons
- Lower earnings per service
- Limited control over prices
- Limited schedule flexibility
- Don't own your client relationships
- Can't sell your business
- Subject to salon rules and changes

### Good For:
- New professionals building skills
- Those who want simplicity
- People uncomfortable with business side
- Professionals in expensive areas
- Those wanting employee benefits

## Booth Rental Model

### How It Works
- You're an independent contractor
- You rent a space (booth or suite)
- You keep 100% of service income
- You handle all business aspects
- You pay fixed rent ($150-$500+/week)

### Pros
- Keep 100% of service income
- Complete control over pricing
- Full schedule flexibility
- Own your client relationships
- Can build and sell a business
- Build your brand
- More earning potential

### Cons
- Fixed rent even if slow
- Must buy all supplies
- Handle all marketing
- Manage own booking
- Pay all business expenses
- Quarterly taxes
- Need liability insurance
- Higher risk

### Good For:
- Experienced professionals with clientele
- Self-motivated individuals
- Those who understand business
- People wanting full autonomy
- Professionals ready to build equity

## Financial Breakdown

### Commission Example
**Monthly service revenue:** $10,000
- Commission (50%): $5,000
- Tips: $1,500
- **Take-home:** $6,500/month
- **Annual:** $78,000

**After taxes (~25%):** $58,500

### Booth Rental Example
**Monthly service revenue:** $10,000
- Keep 100%: $10,000
- Tips: $1,500
- Total: $11,500

**Expenses:**
- Rent: $1,600/month
- Supplies: $400/month
- Insurance: $100/month
- Marketing: $200/month
- Misc: $200/month
- **Total expenses:** $2,500

**Net:** $9,000/month = $108,000/year

**After taxes (~30%):** $75,600

### The Math
Booth rental nets $17,100 MORE per year in this example.

## Break-Even Analysis

You need to generate enough revenue to cover rent and expenses.

**If rent is $400/week ($1,733/month):**
- Add $800 for supplies, insurance, etc.
- **Total overhead:** $2,533/month

**At 50% commission equivalent:**
- You need $5,066 in services to break even
- Anything over that, you keep 100% vs 50%

**General Rule:**
If you can generate at least $2,000/week in services, booth rental is usually more profitable.

## Which Should You Choose?

### Choose Commission If:
- You're new (less than 2 years experience)
- You have less than 20 repeat clients
- You don't have 6 months savings
- You're not comfortable with business tasks
- You want benefits (health insurance, PTO)
- You prefer predictable income
- You're in a very expensive market

### Choose Booth Rental If:
- You have strong existing clientele
- You're consistently booked 50%+ in advance
- You have business knowledge or willingness to learn
- You have 6+ months emergency fund
- You want full control
- You're entrepreneurial
- You want to build equity

## Hybrid Options

### Suite Rental
- Private suite in shared building
- Like booth rental but more privacy
- Usually $200-$600/week
- Best of both worlds

### Commission with Higher Split
- Some salons offer 60-70% to experienced stylists
- Less than 100%, but less risk than booth rental
- Good transition option

## Making the Transition

If you're moving from commission to booth rental:

1. **Save 6+ months expenses first**
2. **Build your client base while employed**
3. **Understand your true income needs**
4. **Research spaces and costs**
5. **Create a business plan**
6. **Set up legal structure**
7. **Give proper notice**
8. **Launch strategically**

KwickStudio works for BOTH commission and booth rental professionals, helping you manage clients, track income, and plan your career path—whether you're employed or independent.

Sarah Chen

Industry Expert

Former salon owner with 15 years experience in nail salon management.