tag:blogger.com,1999:blog-80346207081898225222024-02-08T13:40:28.507-05:00Master SalonsMaster Salons brings together some of the finest personal appearance professionals all in one place. If you are looking for quality service or if you are a licensed professional looking for a unique business opportunity that provides independence, reduced cost, and control of the budget, visit our website for more information at http://www.mastersalons.bizUnknownnoreply@blogger.comBlogger7125tag:blogger.com,1999:blog-8034620708189822522.post-45645912609562629162012-04-11T16:19:00.000-04:002012-04-11T16:19:16.671-04:00Cathy Antoniou Now Offers Laser Hair Removal in Woodbridge, VirginiaCathy Antoniou is pleased to offer laser and light based hair removal, in addition to the other skincare services she provides, from her location inside Master Salons in Woodbridge, Virginia.<br />
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Unwanted facial and body hair is a common problem that can be a source of anxiety for many people. Laser hair removal is now widely accepted as a successful approach to removing that unwanted hair in both men and women. <br />
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Laser hair removal has become very popular and is one of the most frequently performed cosmetic procedures in the United States. Laser hair removal uses beams of highly concentrated light to penetrate into hair follicles and destroy the hair within them. The procedure is a rapid, non-invasive method for hair removal where, in general, after a series of short treatment sessions, permanent hair growth reduction is possible.<br />
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For more information on laser hair removal or other skincare services that Cathy Antoniou provides contact her at (571) 286-7934. You can also visit Cathy’s website at <a href="http://cathy.mastersalons.biz/" target="_blank"><span style="color: #5080f0;">http://cathy.mastersalons.biz</span></a>, where you can view her price list and even schedule an appointment online.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8034620708189822522.post-77737605046992750712011-05-01T16:27:00.000-04:002011-05-01T16:27:47.384-04:00Crystal Mylonas Now Providing L'Oréal's New INOA HaircolorAmmonia is used in hair color to open up the outer layer of the hair shaft or cuticle so that the color molecules can penetrate and bond with the hair. The odor can be pungent and for some, the ammonia can cause scalp irritation.<br />
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INOA (pronounced in-oh-uh) is a permanent hair color system from L’Oréal Professionnel that is ammonia-free and uses an oil delivery system to get color into the hair. INOA is available in over 40 shades and provides excellent gray coverage. <br />
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For more information on this service or the other hair services that Crystal Mylonas provides, contact her at (703) 987-0970. You can also visit Crystal’s website at http://crystal.mastersalons.biz, where you can schedule an appointment online.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-8034620708189822522.post-8540615460688459102010-12-27T09:54:00.000-05:002010-12-27T09:54:23.402-05:00Grand Opening Event January 15th to Benefit Heather MainwaringOn Saturday, January 15, 2011, Master Salons will have a Grand Opening from 9:00 am to 5:00 pm. We will be offering free food, haircuts and facials. Something very special for us on that day is that we will be accepting donations to benefit Heather Mainwaring. Heather is a Prince William County school teacher that was recently diagnosed with cancer. All of the money raised that day from donations will go to assist her and her family as they go through this very difficult time. Please come by and show your support for Heather and her family.<br />
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Our address is 13885 Hedgewood Drive Suite 121 in Woodbridge, VA. We are located at the corner of Prince William Parkway and Minnieville Road beside Long and Foster Real Estate. Our phone number is (571) 285-4972. You can also get more information about Master Salons by visiting our website at <a href="http://www.mastersalons.biz/">http://www.mastersalons.biz</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8034620708189822522.post-48942050144860860102010-02-27T10:55:00.000-05:002010-02-27T10:55:21.115-05:00Stylist as Employee vs. Independent Contractor<span style="font-family: Arial, Helvetica, sans-serif;">Many salon owners desire to designate their stylists as independent contractors rather than employees in order to avoid paying payroll taxes. In some instances this may be permissible, but owners should be very sure before doing it. If the Internal Revenue Service (IRS) determines that the stylists are employees and not independent contractors, the owner can be penalized up to 75% of payroll taxes owed. If you have several stylists, that could be a huge penalty on top of still having to pay the taxes owed.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">IRS Publication 3518 provides specific tax guidelines for the beauty and barber industries. For the purposes of this post, I will take the perspective of a salon owner, but the same guidelines apply to a barber shop, spa, or any other service oriented business within the personal appearance industries.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">What makes an employee?</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">There are a number of factors that could make a stylist qualify as an employee, but here are some of the most common: (1) the stylist works hours established by the owner, (2) the salon has a dress code, (3) the owner determines the product line and provides products and supplies for stylist use, (4) a salon employee or owner handles appointments for the stylist, (5) the owner processes sales and manages payments for stylist provided services, (6) the owner provides training to the stylist.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">What makes an independent contractor?</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">There are also factors that could indicate a stylist is an independent contractor and not an employee; here are some of those: (1) the stylist sets her own operating hours, (2) stylist has her own key to the salon and is free to come and go as required, (3) stylist provides all products and supplies she will use and determines her own product line, (4) stylist has her own phone number, (5) stylist makes her own appointments and builds her own client base.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">What about booth or chair renters?</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Even booth renter arrangements can run into problems if not properly managed by both the renter and the owner. Arguably the most important item to keep the arrangement clear is to have a signed lease. Within that document, ensure there are no factors that could imply an employer/employee relationship; all the factors of an independent contractor should apply to a renter. In addition, the owner should provide the renter with receipts for all rent payments and any product or supply purchases. The renter should issue a Form 1099-MISC to the owner indicating the rent paid for the year.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8034620708189822522.post-79719208470060570202010-02-27T10:40:00.004-05:002010-02-27T10:57:03.528-05:00Could we use independent contractor stylists?<span style="font-family: Arial, Helvetica, sans-serif;">When we were doing the research for opening our own salon, we looked at the options for paying stylists. Most salons in our area pay on commission. As we did our research, we were a bit shocked to find that in most salons around 50% of gross revenues go to pay salaries, commissions, and payroll taxes. </span><br />
<a name='more'></a><span style="font-family: Arial, Helvetica, sans-serif;">This, and other factors discussed in my post called "</span><a href="http://blog.mastersalons.biz/2010/02/is-franchise-salon-really-for-us.html"><span style="font-family: Arial, Helvetica, sans-serif;">Is a franchise salon really for us?</span></a><span style="font-family: Arial, Helvetica, sans-serif;">”, caused us to decide against the franchise option for our salon. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">The potentially significant cost of payroll taxes has led many salon owners to attempt to designate their stylists as independent contractors rather than employees and issue them a Form 1099 at the end of the year instead of a W-2. The logic behind this is that business owners do not have to pay payroll taxes for independent contractors, only employees. However, there is potentially a huge risk being taken. If audited and the IRS determines that the stylists are employees and not independent contractors, a business owner can be penalized up to 75% of payroll taxes owed. If you have several stylists, that could be a huge penalty on top of still having to pay the taxes owed. See my post called “<a href="http://blog.mastersalons.biz/2010/02/stylist-as-employee-vs-independent.html">Stylist as Employee vs. Independent Contractor</a>” for more information on the differences.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">For the salon to effectively handle walk-in traffic, we needed predictability in stylist schedules, thus leading to specific hours for most stylists. Also, we wanted to provide some training and establish at least a basic dress code. After all, each stylist represents the salon and us.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">The overall effective management of salon operations made the argument for independent contractors very weak. Specifically, we did not want each stylist using and selling a different product line. We had a central telephone number and one receptionist that handled appointments. Finally, payments for services were made at a central location and deposited into the company account.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">It was very clear that independent contractors would not work for our salon.</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8034620708189822522.post-47651967474473198042010-02-27T10:35:00.000-05:002010-02-27T10:37:09.068-05:00Forming our salon’s parent LLC in VirginiaWhen my wife and I were preparing to start our business, we looked at all the different business structures. We decided to organize as a Limited Liability Company (LLC) due to the fewer requirements and the same limited liability as a corporation. It is important to note, however, that the Internal Revenue Service (IRS) treats us as a Partnership and all income is passed through to us as individuals. Thus, our LLC is a pass-through entity. Here is how simple it is to form an LLC in Virginia.<br />
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You will see websites, magazine articles, television commercials, and other advertisements wanting $100 to $150 or more to help you form an LLC. Keep in mind that this fee is in addition to the fees required to apply for your business with the State. I cannot speak for all states, but in the Commonwealth of Virginia, you are throwing your money away if you pay for this service. <br />
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The first thing I did was visit the website for the State Corporation Commission (<a href="http://www.scc.virginia.gov/">http://www.scc.virginia.gov/</a>) to confirm all of the requirements- which turned out to be fill out one simple, one-page form (LLC-1011) and mail it in with a check! The LLC-1011 is the Articles of Organization. The form is nothing elaborate, does not require a lawyer to complete and does not need to be notarized. The main things we had to have for the form were LLC name, registered agent, addresses, and one member of the LLC to sign it. The name of our LLC had to be distinguishable from any other LLC name in the Virginia database. We did a preliminary name search on the website above and then called the clerk’s office to confirm it was available. Once we confirmed our name was good, we continued with the rest of the form.<br />
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Next was registered agent. I will not go into the details of a registered agent, but basically it means someone to whom the State will send official notices and correspondence. I made myself the registered agent and used my home address since I deal with the administrative and financial matters for the business. The registered agent and address can be changed later if necessary. We also used our home address for the principal office address of the LLC. My wife signed the form as an organizer and we mailed it in along with the check for $100. Within a week we had confirmation our LLC had been formed. Too easy!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-8034620708189822522.post-19134029658017930452010-02-14T23:48:00.002-05:002010-02-26T23:17:35.623-05:00Is a franchise salon really for us?Some time ago we began looking into options for opening our own salon. We thought the most logical place to start was with franchise salons. After all, the large companies like Regis, Great Clips, and Fantastic Sams have the experience and walk you through the process. We looked at them all and narrowed it down to Fantastic Sams and Cost Cutters (a Regis chain). We did a lot of research, talked on the phone a lot, and met with regional developers. Fantastic Sams was our first choice and seemed to have a terrific program. All the while, however, I had been running numbers in excruciating detail again and again. Something just did not add up, but we were still collecting information. <br />
<a name='more'></a>We thoroughly reviewed the franchise disclosure document (FDD) to try and validate our estimates for startup costs and what we thought the monthly expenses would be. We obviously could not predict as accurately as we would like what the income would be. However, my wife worked in a franchise salon and was able to get a good idea of how much traffic went in and out on a daily basis.<br />
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One good thing about the FDD for Fantastic Sams is that it is very detailed on what you can expect for the major categories for start up costs. There were things on there we were not aware of such as deposits into marketing funds, minimum requirements for startup marketing, proprietary point of sale systems with software and owner training. The FDD also provided clarity on the franchise fees, ongoing royalties, monthly payments into marketing funds, minimum allowed advertising, and required computer support contracts. When we combined those things with the things we already knew about, we had a pretty clear picture of what it was going to cost to start up and what our breakeven point would be every month. Of course, the buildout costs and equipment costs are all based initially on averages. We can tell you that the averages were very low compared to what we would later experience. Our bottom line for startup hit just over $185,000 for a 1,500 square foot space with 8 stations. That was a bit higher than where we wanted to be, but not too far off. Then came the concern...<br />
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Being a detail oriented person, I listed everything I could think of for monthly expenses. The FDD and all the franchise folks were very helpful with the big pieces. But, once again, there were a number of small parts that very quickly added up. For example, in our county, there is a business license tax that is paid on gross receipts and there is also a business personal property tax. The franchisers also did not include merchant account fees, credit card fees, professional fees, and the kicker...employee theft. Yep, you got it. Employees stealing from you- more on that in a minute. When we crunched all the numbers, our monthly break even point was $25,285. Of course, no FDD is going to make any predictions on what your income will be other wise they assume liability. So, again, you get averages. For this, I can tell you the averages are very high, as would be expected. After all, it's a sales pitch even if it is regulated and supposed to be completely objective. We monitored closely the traffic in and out of franchise salons that rely heavily on walk-in traffic, as they all do, to get a feel for a reasonable income. In the meantime, we spoke with franchise owners to see how reality compared to what they estimated before opening. We took those numbers and combined it with our estimates and came up with a monthly gross income range of $25,000 to $28,000, with $25,000 being much more realistic than $28,000. We were not entering into a open market. We would have to go in and take market share away from established salons. So, achieving even $25,000 in a month would be a challenge for a while. Right away, we could see we would be cutting it too close. <br />
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The greatest factors eating away at our bottom line were royalties, which in the case of Fantastic Sams was not a % of gross receipts, but was over $300 paid weekly, a mandatory marketing fund, payroll or commissions and payroll taxes, inventory and supplies, rent, and loan payment. When we went through the details, there were just no places to cut back as everything was required. Then we started dealing with the issue of employee theft. From my wife's experience at her salon and from talking with other owners, employee theft has the potential to drive even the best producing salon out of business. Employees walk away with products and supplies like they're a perk of the job. Not only that, but the waste factor can be outrageous if not closely monitored. But, an even greater problem is in the accounting. Most salons in our area pay stylists by commission (40 - 45%). If customers pay cash, don't be surprised if those services do not show up in the system, but instead the entire payment goes into the stylist's pocket. If there is the need to give the impression that they are entering it into the computer, a cut, wash, blow dry, and color will end up being only a cut and the rest going into the stylists pocket. Credit card payments require a little more work, but it's still not difficult. Employees will also steal from each other. The "nice" one will offer to check out a customer for someone else so they can go ahead and take the customer that is waiting. The "nice" one will then credit themselves with the service or pocket some extra tip when one is left.<br />
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When we factored in everything we could possibly imagine we were left with a very tiny to non-existent profit margin. Granted we planned the worst case scenario. But, we were not about to sink that much money into something only to find out we had been too rosy in our outlook. There were a couple of mitigating factors that could have made a big difference. If we could find the right residential area with no salon anywhere around, that could have bumped up the gross income. Also, being owner/managers 24/7 could help with some of the theft and waste issues. Finally, opening 3 or 4 salons (which negates the last factor of being owner/manager for all of them!) could generate enough net income to make a good living. But, the headaches and stress would probably send you over the edge.<br />
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By no means are we the experts, but we just wanted to share our experience with researching the franchise option. Next, we will discuss another option...going it on our own.<br />
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