Commission vs Booth rental: The Tax & Profitability Component behind both models
- E2
- 25:00
- June 11th 2018
Whether your salon is structured as a booth rental salon or a commission salon, if run properly, you will make money with either structure. But don't let the IRS or their rules interfere with your financial goals.
Whenever I am consulting with a new client we always discuss the type of business structure they would like to implement. They always respond with "which is better commission or booth rent?" In my humble opinion, I don’t think one is better than the other, instead, one should choose a business model based on their overall goals and intended outcome.
I do believe that before you pick a particular model, you should do your research so that you pick the one that aligns closets to your overall goals.
Most salon owner's do not take the time to think about tax consequence of either model. That's where I come in.
When I talk about the tax consequence of your business model I am referring to the things you need to know regarding IRS compliance, and what you need to do to make sure there is a clear separation between you the salon owner and the booth renter so you can protect yourself if god forbid, you are ever audited by the IRS or state.
PROFIT AND BEAUTY: A Show For Salon Professionals
This show was created for Salon owners who have decided to start running their salon like a business rather than a hustle.
The focus of the show is to help salon owners understand the numbers behind their business so they can grow and make extraordinary profits.
My name is Desarie Anderson, a hair stylist turned accountant and financial guide. When salon owners have trouble understanding the finer details of their finances, they come to me. With 19 years of salon ownership experience coupled with my experience in the financial world, I know the ins and outs of both the beauty and the financial industries. Whether you want to minimize your tax bill or grow and scale your salon, I’ve got you covered.
