According to the Bitesize GCSE revision guide for business studies, the hairdresser is one of the most likely trades for a person to be self employed. As a self employed hairdresser, your status can mean anything from being a sole trader in charge of your own shop, to renting a chair from a franchise. We’ve put together a list of five facts you’ll want to know before you start snipping your way into your self employed life.
1: Lots of hairdressers are sole traders
When you’re a self employed hairdresser you are in control of your business: what kind of advertising you do, when and how you work. It also means, on average, being a sole trader. A sole trader has no protection against financial problems in his or her business: if the company goes down, you go with it – and your creditors can take what you owe out of personal assets including your home.
2: You can rent a chair in a salon
Potentially the reason why so many hairdressers are self employed, chair rental allows a salon to appear fully staffed without having to worry about sick pay, holiday pay and maternity leave. Maternity leave is taken care of by the Level 2 National Insurance Contribution (NIC) you pay: sick pay, you don’t get. Think about health insurance to cover periods off work due to illness.
3: You can freelance in a salon without needing a specific chair
As a salon hairdresser self employed status either means you are renting a chair (see 2) or you’re selling your services to the salon without paying rent to use the premises. When you freelance with the salon as your agent, you tend to pay a percentage of what you earn to the owners and keep the rest for yourself. The problem for salons is that you don’t guarantee a specific income. You only pay from what you earn, so if taking are low your fee is nominal.
4: Your salon might be in competition with you
Think about a freelance arrangement with a salon from the salon’s point of view. On the one hand, the salon needs you to do well so it gets a healthy chunk of your takings. On the other, if all of its clients start using your services, rather than its own, then it stands to lose out. The flip side of this is that a salon renting a chair or even a room to a hairdresser may want a contract, which states that you can’t take your clients with you if you move on. That’s hard to enforce (because your clients can choose to do what they like), but it’s worth noting as a potential cause of bad blood.
5: Working as a freelance hairdresser means your salon may even be afraid of you!
While there are plenty of benefits for a salon allowing a hairdresser self employed status, there are plenty of legal pitfalls too. For example, the salon might want you to work to a rota, and require you to be on the premises even when you have no clients booked. According to an Employment Tribunal case, which occurred in 2011, that actually makes you an employee – which means the salon may have to tread carefully if it wants you to leave.
Self employment is never easy – but you can make it simpler if you follow a few straightforward rules. When you rent a chair, or a room, or work with a commission arrangement, get everything in writing. Then everyone knows where they stand.
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