Over the last few days a number of potential new business starts have asked me which is best:-
Rent or % of turnover
Let us consider the situation.
Is this your first venture into self employment/ business? Have you a client base?
Most mobile Beautician, therapist, hairdresser, nail technician’s usually start with family and friends.
They make some below the radar, tax wise, profit, but this is NOT a business, in the true sense. It will not sustain you, nor provide a steady, growing income.
Before you embark on your journey to salons, in an attempt to secure a room or chair, take a step back.
Firstly, ask yourself is this the right location?
What is the existing clientele base?
Old? Young? Affluent? A particular product / offering?
Are their other therapists etc. based on the premises? Does the owner operate within the salon?
Secondly, why should they give you, their customers? I can assure you, they will not!
They expect YOU to bring your clients, develop your own client base.
Given this, the decision is easy for you to make, not so easy for the owner!
You want a ready made business? Yes? No!
If you pay £50-£100 per week, this is very good value, as you have no other overheads, however, if you do not have many clients, can dishearten you, as all you see is the owner taking your money, particularly if you have not earned any that week.
If you are prepared to work, and build a base, it is the best route!
However, a % payment, which initially seems a way to extract your blood and sweat, can often be beneficial to new starts. As your business grows, you pay more than rental system, but it buys you time, and is less risk. You can always renegotiate later.
Put yourself in the owners shoes, they are the ones taking a risk on you!
Do the Maths!
It is better to get a chair, than lose heart on JSA!
Learn your craft, be realistic. A client base takes time. Although not your salon, you still need to get out their, and network, leaflet drop etc.
Get a signed agreement! Duration, and rules. Protect yourself!
I hope this makes you think?
It is a two way deal. The owner is taking more risk than you, and you are learning whilst earning.
Remember there are start up loans to help you, unto £10,000 at interest only repayments in first year. 6% interest!
New Enterprise Allowance if your are on JSA
As always like if you think this has helped.
Contact me at Get Started in Blackpool.
Look at our website on http://www.blackpoolunlimited.co.uk
If you live in Blackpool and want to attend our free courses, ring 01253 477147 and let me help you live the dream