Here are some conversations I have had recently with salon owners on - how am I doing? How much should I be making. Interesting insights...
In these cases the owner is hands on management with 2 doing some services.
I only have a few truly absentee owners. I do have a few that do services full time and have a manager. One of these has a hair only business and she does 4 full days a week of hair. She pays the manager 40% of what she does in services almost 50K a year and expects the manager to handle her 12 stylists and 1 full time and 2 part time receptionists. She does not have a bookkeeper and her accountant does payroll and vendor checks. This is expensive I think.
In an absentee ownership situation I must speculate that the front desk costs are used to hire one more qualified manager and the balance would come from the owner’s compensation.
Owner compensation was given as 8% to 14% of sales. This figure I have no way to verify.
My most verifiable example is the 1.6k salon/spa.
The owner does 2 days of services a week and manages 3 (probably really 4) days a week. She said her total income from the business is about 180,000 (includes her salary, the commission on the 2 days looks to be worth about 40k a year at 50% of her sales volume, and end of year bonus she takes) and that is about 11%. If she didn’t do the management or services I would not expect her to make more than 6% net/net so that would leave 3% or 45+ a year for a manager?