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Chapter 4
Commission vs Booth Rent
The pay model you choose determines your profit margin, your management burden, and the kind of talent you attract.
Commission-Based
Stylist earns a % of the revenue they generate. Most common model.
Typical: 35–55% of service revenue
PROS
- Aligns incentives with performance
- Scalable — you only pay when revenue comes in
- Easy to attract experienced stylists
CONS
- Higher cost per service as stylists grow
- Can create competition among staff
- Harder to predict payroll costs
Salary / Hourly
Stylist earns a fixed wage regardless of service volume.
Typical: $15–$30/hour or $2,500–$5,000/month
PROS
- Predictable payroll costs
- Better team culture — less competition
- Attracts stylists who want stability
CONS
- You pay even when the chair is empty
- Less incentive for stylists to upsell
- Higher risk for new salons
Booth Rental
Stylists rent a chair/station and keep all their revenue. You collect rent.
Typical: $800–$2,500/month per chair
PROS
- Guaranteed monthly income
- No payroll, no benefits, no management overhead
- Lower risk for the owner
CONS
- Less control over client experience
- Stylists may leave and take clients
- No leverage to grow revenue per chair