Issue link: https://www.ahpindiestylist.com/i/1498691
N ot a m e m b e r ? J o i n at a s so c iate d h a i rp rofe s sio n a ls .c o m 19 nathan dumlau/unsplash 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 front- of-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