Vivid Salon in a suburb of Denver seeks an esthetician to join their team as a booth renter and provide a range of skin care services … KR Beauty Salon in Kansas City, Missouri looks for an esthetician to hire as a salaried employee as they expand their business and attract new clientele … European Wax Center in San Jose, California seeks a licensed esthetician for a position that pays an hourly wage plus commission …
As the demand for skilled estheticians continues to grow, you’re going to encounter a variety of employment options, ranging from renting space so as to work as an independent business owner, to working as an employee being paid commissions while earning a salary or being paid an hourly wage.
Renting a space or working on commission? You’ve probably heard a lot of opinions about these topics, but how do you know which is right for you?
Let’s define exactly what we’re talking about:
Renting a booth or room typically means that you have your own space reserved in an existing salon, spa, or other beauty establishment. You provide all your esthetics tools and supplies, set your own prices and hours, and see your own clients. In this scenario, you independently run your own esthetician business out of a space you rent.
Working on commission means that you are an employee of a shop, salon, spa, or other beauty establishment. You earn a percentage of what you generate at your place of employ, and depending on the arrangement with the manager or owner, you may also get a salary or wage on top of that. In some cases, you would be paid a base salary or hourly wage OR commission, whichever is higher.
Choosing between these two models can be a challenge, but we’re here to help.
Pros and Cons of Booth/Space Renting and Commission
Each of these business models has its own advantages and disadvantages:
Advantages of Working on Commission as an Esthetician
- More income security – you won’t go into the red during slow weeks or months
- Potentially more of a team environment – you won’t be competing with your colleagues for clients
- Potential to meet more clients
- You don’t need to make an initial investment in a lot of tools, supplies, and products – your employer takes care of this
- Support from your employer – the manager or owner will take care of things like advertising, stocking inventory, and purchasing esthetician tools and supplies
- Simplified accounting and taxes – your employer takes care of the complicated accounting and taxes; you can probably get by with a 1040EZ
Cons of Working on Commission as an Esthetician
- Less earning potential compared with booth renters – your employer always keeps a significant percentage of your earnings
- Some employers do not allow you to take your regular clients with you if you move to another business
- Less independence than the space rental model
Advantages of Renting a Booth/Space as an Esthetician
- More independence – you can set your own prices, see the clients you choose, and make your own work schedule
- Higher potential profit margins – instead of paying a percentage of your income you pay a set weekly/monthly rental, allowing for the possibility of higher earnings
- You can make your own promotions and deals
- You can choose which products you use
Cons of Renting a Booth/Space as an Esthetician
- Business accounting activities are more complex – you are responsible for bookkeeping, taxes, and audits
- Business operation activities are more complex – you need to take care of marketing, insurance, inventory, and buying your own esthetician tools and supplies
- More risky – if you have a bad week you might go into the red
- Requires an initial investment up front – you have to buy all your supplies, tools, and perhaps even furniture before you can start
- Not as much potential to meet new clients as the commission model – you need to already have an established base of clients, be in a very good location, or both
Following the Natural Progression from Commission to Renting Space as an Independent Business Owner
A general trend emerges when talking to estheticians who have worked according to both the commission and booth rental models. Typically these estheticians start out working on commission or earning an hourly wage, and after a few years of learning the industry and building up loyal clientele, they switch to the booth rental model.
You’ll find this is a comfortable progression to follow because you don’t face the risk of immediate failure as you start out fresh, even though this could potentially mean you would earn less than if you had started out renting a space. How do you know when it’s time to make the transition? Once the math adds up showing that you would make more as an independent renter. Experienced estheticians say a good rule of thumb is once you earn enough to pay off a weekly space rental after a day or two of work; then the time is ripe.
While this progression is common, you can still find plenty of estheticians who have worked their entire careers in the commission model, and others who have always supported themselves through the booth rental model.
If you feel strongly inclined one way or the other, then it’s important to chase down your goals. The most important underlying factor in success as a booth renter or commissioned employee is…you!
Examples of Each Model
You can find each kind of business arrangement throughout the nation (except New Jersey and Pennsylvania – these states don’t allow booth rentals), and many establishments have a mix of commissioned employees and booth renters.
Places that rent out space to estheticians …
- Hair for You Salon in Arlington Heights near Chicago is an example of a business that rents space to estheticians. Under the same ownership for the past 10 years, this salon is unique in specializing in wigs and hairpieces, while also offering traditional spa services performed by estheticians.
- Natural Balance and Beauty Day Spa in West Boylston outside of Boston also rents space for estheticians. This establishment offers services that include waxing, facials, and other spa techniques, and also shares space with massage therapists to offer clients a holistic spa experience. The owner started out working as an employee in a spa and then decided to transition to become an independent owner of a small business.
Places that hire estheticians and pay a commission …
- Elements Spa Salon at the Great Wolf Lodge Grapevine near the Dallas/Fort Worth International Airport hires estheticians as employees and pays them on a wage/commission basis. Responsible for providing all skin care and waxing services for clients – both walk ins and regulars – estheticians work at this establishment as part of a team environment.
- Massage Envy in Phoenix hires licensed estheticians and pays them an hourly wage plus a commission for product sales. As an employee of massage envy, you work as part of a team environment and don’t need to worry about advertising, client booking, or billing.
See what the professionals are saying about renting vs commission work as an esthetician:
Professional esthetician Veronica Lillie says that as a booth renter she has control over her hours, prices, and products; “…all of that great stuff that pretty much we all want.” Working for a salon or skin care studio on commission means you provide services in exchange for an agreed amount. While she prefers renting a booth herself, she advises, “…if you’re right out of school, I don’t recommend going straight rental. If you’ve got some experience underneath your belt and some clients, rental is where I recommend.”
Experienced esthetician Deborah Williams says that just starting out you need to get experience and an edge on your competition. Chain spas and retail stores are more likely to hire you fresh out of school, and putting in your time in these types of places is necessary to build your level of experience and clientele.