Question for you solo estys or business owners
I've been on my own for 1.5 years, renting a small room in an office-type space and doing well. I am branching out now, and about to start renting a retail space that has 3 rooms in it. I will occupy one room and will be looking to rent out the others. I have a ton of questions, but I'd love to hear from others who do this and what pitfalls and issues to be on the look out for?
A few of my questions:
1) I think I want it to be a straight 'room rental'- the other person is their own business. I don't want the hassle of employees or 1099 contractors, and I don't have the clientele to do a commission type employment. With this scenario, do they work under their own business name or mine? Do they work under my business' establishment license? If so, do I get fined for their state board issues in their own rooms?
2) If they are straight renters from me, what's the best way to handle things like retail items that are out and about? We'd have separate retail, I would think? Or do I provide all retail and they get a commission on sales?
3) Should I not rent to others who are doing services like mine? Or, if I do rent to others who have like services (facials, peels, etc), how do we not confuse clientele with different menus or product lines... different prices?
I may be thinking about this all wrong... I think I want their rooms to be separate from my business, but that may not be a) wise or b) easy to do.
Thoughts? Input? PLEASE :)
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Replies to This Discussion
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Permalink Reply by Carrie Patrick on
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Hmm, I guess my first question would be how the building/rooms appear from the viewpoint of the public, just in a physical sense. Is it the sort of setup that could be easily made to LOOK like it's three separate businesses, with separate signage and retail areas etc? Or is it going to be really hard to present it as anything but one business with three people working there (however you organize it among the three of you)? Because that's probably the starting point for figuring out how you want to present it and then you'll have a better idea who would be a good renter in that situation and how to arrange things.
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Permalink Reply by NBSkinCare on
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Hi Carrie, thanks for the reply. I'll attach layout.
The 2nd area Is separate from the lobby because I want to be able to keep it locked when I work there alone (therefore keeping the retail and computer, etc, away from the front lobby). I also may not have a receptionist, at least not until I really need one. I've always been 'by appointment only', which, I realize now that I'm moving to a retail center, that will begin to change. It's not a high traffic retail center, tho.
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floor plan.jpeg, 2.7 MB
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Permalink Reply by Nicole on
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If you find renters who offer different services you can refer clients to each other and that will benefit everyone. I think a massage therapist would be a great option and maybe someone who does lash extensions- if you don't already offer that service. There are a lot of estheticians in my area that do nothing but lash extensions.
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That's ideally what I want to do. However, the place directly next door to me is a chiropractic center with massage, so I have to keep that in mind. Lash extensions and spray tanning are all things I am looking for.
I really want to bring in someone to do waxing. I HATE waxing, I don't even really offer it. I spoke with an esty today who currently does only waxing and she is VERY interested in renting from me. However, she mentioned she may want to offer facials/peels for 1-2 days per week. As a renter, I couldn't tell her no. But, I'm not sure I want someone else offering similar services to me, especially when it could get confusing to clients.
I may be over thinking this. She seems like a good match because of her waxing expertise (she's good and has her own big client list), but I am unsure how to handle the issue if she wants to offer facial/peel services, too. I don't want her to be able to throw a menu of services up and offer facials for $35 or something ridiculous... it would undermine my business. I don't want to confuse clients either by having separate retail areas/skin care lines/facial menus...
I guess, even if I brought in a renter who said they wanted to do lash extensions only... nothing would stop them from being able to offer other things that their license allows (ie: facials, peels, etc), right?
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Permalink Reply by Cindy Greenwood on
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Actually - you can totally tell your renter that they can't do a particular service.
Landlords put restrictions in contracts all the time...in fact I found a really nice space to rent in an office suite building but they would not rent to me because they didn't allow any business that was noisy or smelly and were concerned about the "smells" from facial and massage services (jeez!)
Here was my situation as a renter in the last place I had...
Landlords business name was (blank) Wellness Center, my biz name was the Skin Center at (blank).
(In hindsight, since her biz went belly-up last year, I would not have chosen a biz name that was affiliated with hers. Oh well, live and learn)
I paid a flat monthly rent. Conditions were that I would NOT offer any competing/same services as she did and that I was NOT allowed to hire employees or IC's...just me in the room. I was inspected and licensed by the state as a seperate business. In exchange for retail display space I gave her 10% of ALL retail sales - not just what she sold when I was in session. This worked because I am an honest person and always kept good accounting of what total sales were.
All check and credit card payments were made thru her business and she paid out to me weekly, less any credit card processing fees. Now in my current business I have all transactions paid directly to me and I absorb my own lower cc fees. She also kept all money from gift cert sales - which was a disaster when she went out of business. Now I sell my own gift certs.
So anyway - your rental agreement can most certainly include restrictions on what they can and can't do. If you put that in, make sure there are clear penalties included. You can also include that NO marketing be done using your business name unless you approve and agree in writing.
You can also offer retail display space with the caveat that you must APPROVE the product(s) beforehand.
Bottom line is that you would be a landlord...and what you say goes.
IMO - complementary not competing services would be most beneficial to everyone. You already mentioned waxing, spray tanning and lashes, and I agree with considering a massage therapist.
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Thanks so much for the info, Cindy!
I've really got to think on this! :)
I *know* I wouldn't want anyone offering acne services (since that's my main thing and the direction my business is heading in). I'm not so sure I'd mind if the renter wanted to offer facials/peels, as long as the pricing was in line with what I do, and as long as she used a different skin care line. I don't want her involved in my retail when I'm not there (too complicated, I think, to keep track of the inventory and $$).
If they are a straight renter and an esty- do they get their own establishment license? or are they under mine (and what would that mean with state board?)
thanks so much!!!
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As far as I know, if they are an esty they would have their own seperate facility license.
If they worked under yours they would be an IC, wouldn't they?
I know that each state is a little bit different.
So - you could just put in no competing services without your prior agreement.
It would be ideal if they would be amenable to working together on maintaining similar pricing and doing joint marketing efforts. Good Luck!
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Permalink Reply by Tracy Watson on
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Would you by any chance like to share your acne services. I"m wanting to specialize in a few things acne one and anti=aging another.
since we live in different states it wouldn't be any competition. Thought it would't hurt to ask.
here is my email address tracy@naturesgenesis.com
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Hi tracy, I use Face Reality for my acne services. Check them out. The owner, Laura Cooksey, is on these boards as well. :)
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Permalink Reply by Miss D on
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I own a business located in a med/pro building. My suite has 4 treatment rooms and 3 of them I rent out to independent contractors. 2 massage and 1 esthetician. They run their business in their own names. I have had the Esthy renting from me for 1 yr now. I gave her 2 shelf spaces for her products and I use the other. We use different lines. There has been no issue or competition in our matching services or selling products. Probably because we are located in a private exclusive area with no walk by traffic. She has her clients, I have mine. We both have our own menu's out. They use their cell phones for their business I have a credit card terminal that can hold up to 10 different merchants, so we have cc's deposited into our own separate business acct's. They have their own insurance and i require that they "piggy back" my spa on their policy. As far as it goes with state-board regulations it depends on what state your in. I am in California and I know I have to abide by the Establishment rules and regulations. They are all responsible for their own taxes, license ect... I have been renting to therapists for 8 yrs so far and have been in this biz for a total of 15yrs as a commission employee, renter and business owner. These ladies except the esthy have been working and renting from me for 8 plus years now and no problems. in fact, when i relocated my office last year they all said they were coming with me! You just have to find the right people who share your same thoughts, values ect... good luck!
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Sounds like where I am currently (renting from someone).
I am wondering how we'll handle walk ins, since the new space is in a retail setting (though, not high traffic) and there won't be a receptionist (at least not at first).
Thanks!,
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Permalink Reply by Sheila Gordon on
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I rent from a massage therapy business (a room). I feel very blessed to have found this place becassue the owner is extremely laid back. SHe is massage and no competition. We offer packages together and when we do that, I let her collect the money and pay me at the end of the week. I am ok with that. Also she does collect the money for gc sales if they buy one of our combo packages, while it stinks bc yes she makes money if they never come in, it really doesn't bother me in the least. She books appts for me, I book for her, I answer the phone when I am around even though it's not my business necessarily. I sell my retail (she doesn't have any as of yet), she pretty much lets me have use of office space for my business, reception area for our clients. I help out with cleaning although it's not required. It's a very your scratch my back I scratch yours. Be very careful who you choose to have in with you, get references from past employers. I feel very much like a family with her. We have another mt that does a split comission but the owner mt feeds her clients all the time. I realize it's not a typical situation but it's a really awesome one and I love going to work every day. One thing she did with me was have me sign a 6 month lease to just test it out and see how we get along and what not.
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