Who Pays Better: Salon Employment vs. Salon Suite Ownership?
Curious about the financial difference between working for a salon and being your own boss in a salon suite? Let's break it down together! Use the formulas below to calculate and compare your potential earnings.
Salon Commission Earnings:
Weekly Breakdown
Gross Weekly Service Revenue: $X,XXX
Your % Commission of Service Revenue: XX%
*If you perform 25 services a week at an average price of $80, this would generate about $2,000 per week.
Formula:
(Gross Weekly Service Revenue) ×
(Your % Commission) =
Service Revenue Earnings
Example:
$2,000* × 40% = $800
Amount Kept by Salon:
(Gross Weekly Service Revenue) -
(Service Revenue Earnings) =
Amount Kept by Salon
Example:
$2,000* - $800 = $1,200
Salon Commission Earnings:
Product Sales
Weekly Product Sales: $XXX
Your % Commission on Product Sales: XX%
Formula:
(Weekly Product Sales) ×
(Your % Commission on Product Sales) =
Product Sales Earnings
Example:
$500 × 20% = $100
Weekly and Annual Earnings
as a Salon Employee
Formula for Weekly Net Income:
(Service Revenue Earnings) +
(Product Sales Earnings) =
Weekly Net Income
Example:
$800 + $100 = $900
Formula for Annual Net Income:
(Weekly Net Income) ×
52 weeks =
Net Annual Income
Example:
$900 × 52 = $46,800
Salon Suite Earnings:
Weekly Breakdown
Gross Weekly Service Revenue: $X,XXX
Weekly Rent: $XXX
Weekly Misc. Expenses (Fee, supplies, etc.): $XXX
*If you perform 25 services a week at an average price of $80, this would generate about $2,000 per week.
Formula:
(Gross Weekly Service Revenue) -
(Weekly Rent + Weekly Misc. Expenses) =
Service Revenue Earnings
Example:
$2,000* - ($250 + $100) = $1,650
Salon Suite Earnings:
Product Sales
Weekly Product Sales: $XXX
Your % Commission on Product Sales: 50%
Formula:
(Weekly Product Sales) × 50% =
Product Sales Earnings
Example:
$500 × 50% = $250
Weekly and Annual Earnings as a Salon Suite Owner
Formula for Weekly Net Income:
(Service Revenue Earnings) +
(Product Sales Earnings) =
Weekly Net Income
Example:
$1,650 + $250 = $1,900
Formula for Annual Net Income:
(Weekly Net Income) ×
52 weeks =
Net Annual Income
Example:
$1,800 × 52 = $98,800
How to Calculate Your Potential Earnings
Use the formulas from the sections above to plug in your own numbers. Whether you’re working at a salon or renting your own suite, you can calculate your potential weekly and annual income to compare the two scenarios.
Let’s recap: If you perform 25 services a week at an average price of $80, you would generate approximately $2,000 per week. Now, let's look at your scenarios below.
Salon Commission Earnings
Salon Suite Earnings
Salon Commission Earnings:
Weekly Breakdown
Your % Commission of Service Revenue
$800
Your salon earns $1,200, thanks to you.
Salon Commission Earnings:
Product Sales
Your % Commission on Product Sales
$100
Your salon earns $400, thanks to you.
Salon Suite Earnings:
Weekly Breakdown
Your Weekly Service Revenue Earnings
$1,650
Salon Suite Earnings:
Product Sales
Your % Commission on Product Sales
$250
Salon Suite Earnings
Salon Suite Earnings:
Weekly Breakdown
Salon Commission Earnings
Salon Suite Earnings
Your Weekly Net Income:
$800 + $100 = $900
Your Annual Net Income:
$46,800
Your Weekly Net Income:
$1,650 + $250 = $1,900
Your Annual Net Income:
$98,800
Factors to Consider
Salon Employment
Pros:
- Steady income
- Benefits (if offered)
- Less responsibility for expenses
Cons:
- Limited income potential
- Lack of control over products, pricing and schedule
Salon Suite Ownership
Pros:
- Higher income potential
- Full control over products, pricing and schedule
- Flexibility in treatment and product choice
Cons:
- Responsibility for rent, expenses, and business management
What’s Right for You?
Consider your financial goals, career aspirations, and personal preferences. Do you prefer the stability of salon employment, or are you ready to take on the challenge and rewards of being your own boss?
Take the Next Step with
Luxe Cosmetic Studios
If you're thinking about becoming your own boss, Luxe Cosmetic Studios offers salon suites designed for success. Schedule a tour for more information and see how you can start your journey!