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Commission vs. Rent

March 2013 issue of Skin Inc. magazine

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One of the first decisions a skin care facility owner has to make is how to earn income from staff. Usually that boils down to renting or commission. What’s the difference?

Rent

If team members are renters, they are independent contractors—a business working within a business. Spas typically will ask for a fixed weekly or monthly rent, and the renter provides everything needed to run the business, such as equipment, back bar and supplies ... and clientele. Rent-model spas are more desirable for a busy esthetician who has clientele, which provides opportunities for retail product growth. Some even do their own advertising and keep their own appointment books. Renters also should carry their own business licenses and liability insurance. If they don’t, that can be a potential burden for the owner.

As part of a contract, you may agree to provide certain amenities as part of the rent, such as reception or towel service. The more you provide, the higher the rent should be. Unfortunately, a common issue with renters is late payment.

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