How to

PUT YOUR SPACE TO GOOD USE

Want to capitalise on any spare space in your business, but not sure where to start? Here are some top tips – from licences to legal contracts.

January gets us all thinking about what we want to achieve in the year ahead. Indeed, now is as good a time as ever to think about the way businesses in the hair, beauty and barbering industries use their fl oor space. You could be looking to expand into new services and save money rather than employing a stylist, barber or therapist.

Th ere are various pros and cons to renting out a chair, space or room in your salon or barbershop (see Considering the costs, right). But whether it’s right for you or not is down to you, your priorities and your persuasions. 1 UNDERSTAND WHAT YOU’RE OFFERING Anyone who rents a chair, room or space in your salon or barbershop is classed as self-employed and separate from your business. Th ey will make their own decisions about how they run their business, such as hours of work, services they off er and prices they charge. In turn, they will be responsible for dealing with complaints from their clients. Th ey will also keep their own business accounts and pay their taxes.

Th e government is currently consulting on employment status, and any changes may aff ect the self-employed status of people who rent space. Th e NHBF will update Members on any changes as soon as they are made.

2BE CLEAR ON CONTRACTS Before allowing someone to rent space, you must have a contract signed and dated by you and the renter. Th is is as important for you as it is the renter, as it can help avoid confusion or disputes should things not work out as planned. Th e contract should be clear on what the renter will get in return for their payments to you – for example, heating, lighting and water.

It should also include the amount you are being paid, the date you will get paid each week or month, and how long the agreement is in place for, specifi cally for space and room renters. A probationary period is not

advisable because this could align too closely to employment. Termination clauses in the agreement will allow the contract to be terminated.

Remember, laws can diff er between each of the four nations so check what applies to your country (see Legal advice).

3MAKE SURE YOUR CHARGES COVER YOUR COSTS Th e price you are charging the renter also needs to be in the contract. Calculate how much you should charge as follows:

A fi xed rent (weekly or monthly) – known as the licence fee

An agreed percentage of the stylist or therapist’s takings – known as the service charge

A combination of the above.

NHBF director Tina BeaumontGoddard says: ‘You’ve got to ensure

AS A BUSINESS OWNER, YOU NEED TO MAKE IT VERY CLEAR THAT YOU ARE NOT TAKING ON ANY FINANCIAL RISK

you are covering all costs and making a profi t. As a salon or barbershop owner, you need to make it very clear that you are not taking on any fi nancial risk.’

For example, if you are VAT registered, ensure you add on VAT to the rent you are charging the person using your chair, space or room. However, for beauty services only, VAT does not have to be added to the rent. For any other charges, however, rent has to be applied.

To fi nd out how to calculate these licence fees and service charges, read our full guide (see Resources).

4REMEMBER GDPR Under UK law, everyone responsible for using personal data has to make sure this information is used fairly, lawfully and transparently. As such, the renter must protect the data they hold on clients.

LEGAL ADVICE

If you have specifi c questions relating to the differences in commercial law across the four nations, NHBF Members can access our legal helpline. For more information, go to

nhbf.co.uk/legal-support

RESOURCES

NHBF chair, space and room renting guide for salon owners: nhbf.co.uk/

chair-renting-guide

5HIGHLIGHT HEALTH AND SAFETY RESPONSIBILITIES Someone who is selfemployed and rents space or a chair must follow the necessary health and safety guidelines. Th is includes allergy alert testing and sensitivity checks for clients.

PROS AND CONS CONSIDERING THE COSTS

PROS

Save money on employment costs – for example, training or pension contributions Offer new treatments or services to your existing clients and attract new ones Gain fl exibility if you can’t afford a fulltime employee.

CONS

Lack of control – for example, you cannot tell your renter how much they should charge clients Competition and higher risk of poaching clients compared with employees Integration of employees and renters may be challenging.