Larry, there is a stylist who would like to work for me who would be bringing her own book of business with her. She wants 75% commission. She has been working in the area for 25+ years and has owned her own salon so I really want to be fair, she is going to bring an considerable amount of clients which we need, along with her business and training background – she could really help during our transition to a new and bigger salon.
What I'm really looking for is how much do you think we can pay her and still be profitable from the business she brings in?
Lila
Lila, one problem that sometimes occurs when you bring a person like this on is that word gets around to the other technicians and they feel that they should receive the same pay scale. Assuming that this is not a problem or you are comfortable that you can handle this type of problem, then the question is how much?
Besides normal pay, you have to remember that there are back bar and credit card fees. In addition, there are payroll taxes on the compensation.
There will also be some other fixed costs such as
- Education
- Refreshments for clients
- Towels, paper etc.
I know that this is a difficult decision. It would be nice to have the additional revenue, but at the same time you don’t want to give away all of the profits. After you have reviewed; let me know if you have any questions.
It is a pleasure serving you.
Larry Kopsa CPA
