The Booth-Rental Decision Shapes This Business More Than Any Other Choice
This plan is built around the guide's core warning: whether a stylist is a legitimate booth renter or actually your employee is decided by the IRS common-law rules and your state's economic-reality test, not by the label on the rental agreement — and getting it wrong can mean back payroll taxes, unpaid overtime and penalties going back years. It covers the licensing path (roughly 1,000 to 2,100 training hours depending on the state), the real build-out cost of $69,000 to $145,000 for a 3–4 station salon, and the Cosmetology Licensure Compact that may eventually help military-spouse license portability.
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Built From Real Numbers
The plan works through the three workforce models — employee, true booth rental averaging around $400 a month nationally, and Sola-style suite rental — and the specific operating facts (who sets hours, who sets prices, who owns the client) that determine which one you're actually running.
It also covers the two separate licenses every salon needs — the individual cosmetologist license and the facility's own salon/shop license — plus the chair break-even calculator and sanitation readiness checklist built for a surprise board inspection.
What's Inside
- Chair break-even calculator to find the revenue needed per station
- Employee-or-booth-renter decision worksheet covering the six IRS/state test factors
- License and renewal tracker for both individual and salon/shop licenses
- Sanitation readiness checklist built for a same-day board inspection
- Startup cost breakdown for both a solo booth/suite rental and a 3–4 station build-out
- Guidance on the Cosmetology Licensure Compact and military-spouse license mobility
- Guidance on common first-year mistakes, including booth-renter misclassification

