Freelance Barbers: Would it Work?
Q.
I am in the process of researching opening a barber shop; I have nearly finished my due diligence and the stage where I am looking at employment of staff. I am considering Freelance Barbers and just charging a weekly rate for the seat. Is this something that is regularly done, if so what would be a good rate to charge?
I am new to this, however I know a good business when I see one, I have found a great location, reasonable rent, very high footfall and fantastic parking. I am keen to get this right from the take off. Any tips would greatly be appreciated.
A.
It is common practice for a shop to rent out seats to freelance barbers, but rather than charge a flat rate, it is better to charge a percentage of each barber’s takings. No matter how good your market research is, there is no way to gauge exactly what the shop’s takings will be until it has been open for at least a few months.
Setting a flat rate for a seat before knowing what the shop’s takings will be is very difficult and can be risky. Set the rate too high and barbers will leave, unable to earn a reasonable wage; set it too low and the barbers will be happy but the business will be losing out on potential profits.
To a certain extent, the same can be said of charging barbers a percentage of their takings, but this system is easier to manage. For example, if market research indicates the shop will provide enough work for four barbers, employ three when the shop opens. This should ensure the barbers are busy and keen to stay and leaves you the option to employ a four and fifth barber at a later date if the business really takes off.
The percentage of takings charged by the business will depend on a wide range of factors. For a start, it must allow the barbers to earn a reasonable wage and it should offer the incentive of a really good wage if the shop is busy and the business a success. Equally, the business has to cover its overheads and make a worthwhile profit.
If keen to attract good barbers currently employed elsewhere, the deal offered will most likely have to be better than their existing deal. However, individual rates for individual barbers can cause disharmony in the workplace and lead to problems, so try to stick to one rate for all. The exception may be to give a slightly higher rate to a freelance who is given additional responsibilities, such as a managerial role.
If the shop is expected to be a busy one, think in terms of offering barbers 40 per cent of their takings with the shop retaining 60 per cent. If offering a barber additional managerial responsibilities, offer 45 per cent. If three, four or more barbers can earn a good living at that rate, just think how much the business will be pulling in.
