Hairdressing Insurance - 8 Things you MUST know about Renting a Chair!
Whether you are a salon owner or a mobile hairdresser looking for a permanent base, renting a chair could be an excellent solution to grow and develop your business. However, it’s vital for all parties that you understand some of the fundamentals before you start.
1: Agree on the terms of the agreement at the outset
Hairdressing is a relaxed industry, and you often work with friends, that being said, failing to agree on a structure before you start can be a recipe for disaster (and many a lost friendship!).
Typically, the agreement will either be a fixed monthly rental payment for access to the chair on an agreed number of days. Alternatively, you could agree a split of income, typically 60/40, whereby the stylist receives 60% of the ticket value (net of VAT if applicable).
2: Product & Equipment
Your agreement also needs to cover and set-out who will be responsible for providing and paying for products used and for the provision of equipment. If the salon owner is providing access to their current equipment and use of treatment products, then this should be set-out clearly to avoid confusion.
3: Product Sales
As a key income stream, make sure you have a clear structure as to how product sales are to be agreed. If someone is self-employed, technically they could start selling their own products unless the Contractor Agreement specifies otherwise. Generally, this will be discussed as part of the agreement terms with a percentage of product sales generated paid to the stylist (normally in the region of 10%).
4: Client Ownership
Another area of potential conflict if things are not transparent from day one is “who owns the client” and the client data list. If a hairdresser is self-employed, you would typically expect them to have ownership of their own clients, including those which they generate and serve from the salon moving forward. To avoid things becoming blurry, make sure this is set out clearly along with client ownership and protection of the existing salon customer data. We would recommend keeping separate booking systems and databases to avert potential confusion.
5: Social Media / Use of Brand & Defamation
Another area which is often overlooked is the use of your brand and social media posting. Set out in the agreement when someone can use your brand name, both now and after the agreement is terminated. This will allow you to keep control of things such as how your salon (brand!) is advertised and also protect you against defamation should things not work out.
6: Hairdressing Insurance
Sorry, we couldn't miss this one out! Probably not a surprise, but this needs to be set out clearly in your agreement terms as to who is responsible for your Hairdressing Public Liability Insurance.
If the salon owner is providing all equipment and product, then the stylist should be able to be included under your existing hair salon insurance policy as a contractor. Alternatively, if the agreement makes provision for the hairdresser to provide product and equipment, then they should arrange their own hairdressing insurance policy.
If you rent a chair as a stylist, you should also consider whether you will carry out any other work wide of the salon as the salon policy will only cover work carried out for the policyholder (i.e. the salon owner). We would generally recommend if you are self-employed that you do purchase your own separate Mobile Hairdressing Insurance policy to protect you against such eventualities.
7: Accountancy Advice and VAT
Before commencement of the partnership, speak to your accountant to ensure you have a clear plan as to how your takings sheets and VAT returns should be completed and how you will make payment in line with the agreed remuneration structure. HMRC has firm guidelines around charge and collection of VAT for chair rental, and you must be familiar and comply accordingly.
8: Get a formal Legal Agreement
If you haven’t grasped this one by now, then I’m surprised you’re still reading this! Getting a solid Independent Contractor Agreement drawn up is the absolute foundation of the business relationship. A small expense at the beginning will save potential heartache and considerable costs further down the road.
Hairdressers Insurance Review
Hopefully, you have found this useful. Insync is a great supporter of the Hair & Beauty industry and specialises in all areas of business insurance from hair salons to mobile hairdressing insurance. Why not compare hairdressers insurance online or arrange a FREE Hair & Beauty Insurance review with one of our gurus. Alternatively, call us on 0330 124 0730, we would love to hear from you!
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About the Author
I’m passionate about family, sport, technology and business.
In fact, I have always been fascinated by business, whether it was running the school tuck-shop or my Saturday job in the local store, I was always looking for ways to improve or view things differently.
I have enjoyed an amazing career fast approaching 25 years in the insurance industry, which has given me real insight into the challenges and opportunities faced by SME businesses in today’s ever-evolving marketplace.
I co-founded Insync Insurance, to offer companies a new way to buy and manage their business insurance. A synergy of digital servicing and personal expertise - utilising the latest technology to enhance relationships, not to replace them.