Employment v Self Employed Salon Model

This is something I really do have some strong opinions on, so I issue this disclaimer…I mean no offence, it’s my opinion and you are welcome to your own too.

For me, as a salon owner there is only one model. I employ my team, I always have, they have a contract on the first day and I believe they are treated fairly and know where they stand, I don’t cut days short when they are quiet, which leads to them earning less and struggling to pay bills or feeling insecure, I employ them, I try my best to keep them busy, and when it’s quiet ( rarely) we train, we clean, we get some staff treatments and we fill time that way.

Salons with a self employed model are literally just renting space, the owner is taking very little responsibility for the welfare of the team, their training or their future.

And then there is the great tax avoidance question, SE salons are rarely VAT registered, with each person creating their own income and having their own card machine.

To many struggling employers it can seem like the SE model is the answer to saving their salon. Paying all the bills during quieter times is tough, I know, but you should only move to a SE model after some really thorough research into the legalities of it and an open and honest conversation with your accountant.

The Pro’s

-It can be a way to keep former staff earning if you have no choice but to close your employed model salon business. Beware of the hidden employment rules, especially when staff were formerly employed and now moved to SE

-It can reduce set up costs if you are looking to open a salon

The Con’s

-It’s never your business, your business is as a property landlord

-They are not your clients, so can and will follow the therapist to the next salon they work from

-There are some major tax and employment law implications

-They are not your employees and are unlikely to follow your rules

-Fallings out about equipment, cleaning, who pays for the milk and coffee are all common

-The self employed model will actually see an end to apprenticeships. I do know a young person that was offered an apprenticeship in a SE business where they would be working on a percentage set up and the apprentice was required to find clients and be self employed, whilst doing the apprenticeship scheme at college. How was that going to work? And of course college would have never have allowed it.

If you are looking to open a salon, whether with a self employed or employed business model, then do make sure you are well advised, do your research on the legalities of both, and if you want to build a business of value to last the test of time I think there is only one option.