Making Your First Hire
by Lauren Snow
If you find your schedule so full that you are turning away potential clients, it might be time to make your first hire. When there is ample interest in potential untapped revenue streams, like offering makeup application or brow lamination to your existing clientele, this may indicate that getting help is the answer. However, expanding your business and bringing on another person without a plan is a big mistake that could cost you money, time, and many headaches. On the other hand, when done well, hiring extra help can afford you more time to do important tasks, generate more revenue, and even create time to do more of what you love.
Sometimes, when we don’t have enough time or resources, things fall through the cracks—and other things don’t get done correctly. (Ask any bookkeeper who has bravely taken over the books for a busy sole proprietor.) For example, suppose you spend most of your time at the chair and need more time for essential office duties, like maintaining records, paying bills, and handling dayto-day business operations. You may first look at your time management and then at hiring a bookkeeper to help you stay organized, manage your cash flow, and understand where your money is going.
For many hair professionals, their first and often best hire is a bookkeeper. A good bookkeeper is detail-oriented and wants to help you correctly record your business operations. In addition,
they should understand tax basics (but they are not CPAs), so preparing your taxes is easier. A good bookkeeper can also help you find ways to cut costs and increase your profits by having real-time data to help you make meaningful decisions.
When deciding how you want to move forward with expanding your business, an excellent question to ask is, “How much do I want to manage and direct my salon?” If you’re passionate about growing your brand and building a salon empire, an employee is probably the right choice for you, so you can control scheduling, services, pricing, and training. However, if you want to increase your bottom line with extra rental income or bring in other services you don’t already offer, a booth-renter situation may work for you.
IDENTIFY THE NEED
Identifying the most urgent need is an excellent place to begin your expansion plans. If your frontof-house chores are bogging you down, look for an administrative assistant or receptionist. They can help you with returning and answering client calls, keeping retail shelves stocked, and checking clients in and out, along with other operational duties.
If you know your clients are going to another salon to get their brows done because you don’t (and don’t want to) offer those services, consider bringing on a professional who specializes in brows so your clients can get all their services performed in your building. This can be a strategic move because you lessen the risk of losing them to another salon that offers the same services you do. In addition, this arrangement allows you to rent a booth when you’re not using it or another booth if you have one available. If your business is growing and you have a wait list of 30 people, consider bringing on another stylist or barber who can do the services your way and let them help you grow your brand.
When you’re looking for a person to fill your role, a good first start is to outline the areas where you need help and list what impact an addition like this would have on you and your business. After you get clear on your goals and reasoning for expanding your business, you can start to think about what the ideal person looks like in terms of qualities and skills.
THE HIRING PROCESS
When you think about bringing on another set of hands, there are two common ways to do this: Hire them as an employee or engage with them as a booth renter. Both employment statuses have pros and cons, which you must weigh before deciding what is best for you.
While we will discuss some of the more common differences, you will want to consult your state and federal laws to ensure you are complying. Businesses in the beauty industry can find themselves in a gray area by bringing on a self-employed booth renter but having expectations of an employee. This misclassification can cause employers to pay fines from the Department of Labor and back taxes, interest, and penalties from the IRS.
The ABCs of an Employee
When you hire an employee, your business pays them hourly, on commission, or a combination of both. In addition, your business is responsible for deducting state, federal, and local taxes. You will provide everything they need to perform their job, including products, equipment, sundries, and protocols. This also means you have more control over what the employee does and does not do. For instance, you may expect them to work Saturdays during specific hours. They will use the products you use because you provide them. You can also dictate their uniform or dress code and ask them to do laundry, refresh retail, and other job-related activities. All payments from their services are collected at the same location, and employees are never paid directly by a client.
The Rules of a Booth Renter
When you hire an independent contractor or booth renter, that person is responsible for paying taxes and running their business alongside yours. They pay you to rent your booth. This
works for companies that want to expand or offer additional services they do not offer.
It is important to note that booth renters differ from independent contractors, where you pay someone to complete a specific task, such as helping you do bridal makeup for a large wedding party. With a booth renter, you have less control over what they do and what hours they work; they set their schedule and choose what services to offer and what to charge. They will provide their supplies, tools, products, and equipment. The self-employed person is responsible for acquiring new clients, booking them, and maintaining their clients’ information. They are also responsible for collecting their payments directly. A bonus for a booth renter is that you will not have to provide extensive training since they will have to rely on their own experiences and expertise to do their job.
Discussing expectations ahead of time is a good practice, since booth renters are only entitled to what is written in their lease agreement. You do not need to provide a backbar, linens, supplies, vacation time, or even clientele. While you can’t require a booth renter to sell your products, you can include a provision in your lease agreement that prohibits them from selling any competing retail.
CREATING A JOB DESCRIPTION
In an employee situation, you will naturally need to create a job description that outlines the roles and responsibilities of your new position. In addition, you will want to include any requirements required to do the job, such as a cosmetology license (if necessary) or Microsoft Word skills. There are many job-posting websites. The trick is figuring out where your ideal candidate will be looking. If you’re looking for a receptionist or administrative help, you may want to look on Indeed, Glassdoor, and LinkedIn. On the other hand, if you are looking for someone who specializes in styling, esthetics, massage, or another field, you may have
better luck posting in local community groups on Facebook for beauty and wellness professionals.
ACING THE INTERVIEW
Once you receive resumes and inquiries, you’ll want to set up a time to interview interested parties. Whether you are interviewing a booth renter or a potential employee, make sure you find each other likable, because you’ll need to have an effective working relationship.
Another quality an applicant should demonstrate is a strong track record of responsibility. For a booth renter, that includes a solid rental history and the ability to provide references for previous rentals or work history. If this person is flighty or flaky, you may not want them to cause extra chaos in your business. For an employee, responsibility includes showing that they can keep a job. You should be able to see on their resume what responsibilities were given to them and if promotions were offered at their previous places of employment.
MAKING AN OFFER AND ONBOARDING
It’s good practice to outline your expectations and arrangement details up front and offer your applicant time to think it over. As mentioned before, a lot of misclassification occurs in the service industry, so they may be accustomed to different arrangements that may not be legal.
A good onboarding plan is one of the best ways to ensure an employee’s success in your business. Onboarding introduces your new employee to your brand, culture, and expectations while making the new hire feel welcome and a part of the business. This also includes ample time for training, product knowledge, protocol guidance, customer service standards, and learning about their new role. Although it takes time away from your day-to-day, onboarding is well worth the investment for the future. Businesses fall short when they don’t take the time to onboard effectively, leaving the new hire feeling lost and unsure of expectations. This can often result in a high turnover rate and lead to unsatisfactory employee performance.
The Small Business Administration (SBA.gov) is an excellent resource for managing your business. They have checklists, guides, and pertinent information about legal requirements, general business help, and proper processes that will save you a lot of time and money.
As an entrepreneur, you will reach many milestones, but hiring your first employee can be one of the biggest. So, here’s to building your empire and growing your business!
Whether you are interviewing a booth renter or a potential employee, make sure you find each other likable, because you’ll need to have an effective working relationship.