I was just offered to be put on salary.

[Yooper]

Go for the Salary but ask for a percentage of ownership in the place after a period of time.

That way you'll build equity too, and won't have to pay income tax on it until it is time to sell.

 

[Yooper]

Okay, indulge my ignorant brain for a moment...

"Percentage of ownership." Are you talking about me taking a part of what the salon makes?

Nope. Talking about like after a period of two years, you own 20% of the business. Because as you get busier, you'll end up making less under the salary arrangement than you otherwise would have. So you have to be compensated in another way.

Then, if you leave after two years, the owner has to buy back your 20% ownership.

If the owner wants to retire in two years, and you want to buy the place, all you need to buy is the remaining 80%. And since you already have a 20% stake, you would be able to use that as collateral and get a loan for the rest, should that be necessary.

 

[Corny]

at least for the moment the deal sounds good. Not only an employer can offer temporary contracts, you can make a temporary contract with her, too. like for two years you will do exactly what she offers you, after that everything is up for discussion again.

 

[biguy732]

As time progresses - you assume more of a percentage of the ownership of the salon until eventually you own 100% and she has effectively sold it to you - but over a period of time.

 

[boxerdudeuk]

Go for the Salary but ask for a percentage of ownership in the place after a period of time.

That way you'll build equity too, and won't have to pay income tax on it until it is time to sell.

this is the correct answer.

 

[cklover]

I would say that Yooper has some very good suggestions and they are definitely worth pursuing. You will need to consult a lawyer to draw up a contract. Don't enter into a business arrangement without a proper contract. You might want to PM alpha and ask her what type of lawyer to consult if you want to go in the ownership direction.

 

[gingentleman]

Make sure that there are benefits, too...insurances and paid vacations and/or holidays, that sort of thing. If these are not offered, you should be paid an additional amount to compensate for their lack!

 

[chillyboi]

W/O Question just take it. times are tough & unstable,
but who am i to say?
Good Luck!!!

 

[pills]

Usually in the business world, being on salary is a good thing. Among other benefits, it just "looks" better to other people (potential employers, credit, etc.). Essentially, your company trusts you to do your job, work at least 40 hours per week and complete your work. You are less tied to clocking in and out. Only delivering...your deliverables.

But it is probably a bit more tricky in the Salon world. I really don't know how all that works. If you could get a percentage of the ownership in a few years as has been suggested earlier, then it would be great. If they are asking you to be on salary so they can pay you less (which it doesn't sound like they are doing to you) it's a bad thing. More work and no overtime.

The only thing I can relate this to as far as work that I have done in the past is hotels: valet parking, room service, and bellman. There is no way that they would put you on salary because they can pay you minimum wage and rely on the guests to pad your paycheck via tips. If they offered salary @ minimum wage, they'd lose all their employees because they wouldn't pay ~$50k/year salary to keep you.

I was salaried at the job I just left last Friday. Although I took an initial pay cut, it worked out in the end because I got more vacation (instead of sick days), a little flexibility on the stop/start hours, got paid for working partial days (good for morning/afternoon dental/doctor/hair appointments).

But it sounds like your employer is offering you a different sort of proposition completely. If it's more money and will continue to be for years then I would take it. If there is a possibility that you will make more now, but the future may hold more money, I'd give it serious consideration.

 

[BINOWGAYLATER]

wait- there are lesbian lawyers, really?
Yeah, this "deal" definately requires some thought - only you're the one who has to think on it - not us.........
Lots of "conditions" / perks (partial ownership) sound nice ineeed if possible. but they may not be..
I'd work the angle of the higher "permanent" salary - but still state the "hours" that would be for - because the 2 days before Easter you'll be killing yourself and kicking yourself - when "they" come back to you and say - hey - you're not hourly.
What you really want to know is if you're EXCEPT or NON EXEMPT. because you can be "salaried" and still eligible for overtime if your job is classified as NON-EXEMPT (from the FLSA Laws).......
Anyway - I would work some angle of "training" new stylists as "extra" cuz if there's lots of turnover - you could be doing way more of that that you think now - and hating it (even if you love it) --- Things are not always as they seem... These "deals" often benefit the owners - as you know --
and My friend quit his partnership - moved to another salon and rents a chair and is happy happy happy - he has not bills to pay - no corporate taxes to file - and all of his clients followed him to the new shop -- as we knew they wuld.
To make a long story endless---- anything that puts more money in your pocket is a good deal - if you can SURVIVE the terms and conditions......... The Dr's are still very busy performing triple by-passes every day...

 

[Alpha1851]

Hmmm...this deal could be financially better for you, but money doesn't seem like that big a motivator to you. I mean, you've taken some pretty big risks. You've quit school. You've moved around. You've changed jobs. Mostly b/c where you were at, just wasn't working for you. You weren't happy. You come across to me as someone who's not afraid of hard work or doing what it takes to be successful, but you also appear to dislike being ordered around or being cornered in. It seems that satisfaction w/ life, (your job, your roommate, your city) is your primary motivator.

Sure, this sounds like more money, but you'll be teaching as well so that's an added responsibility that will take up your time. Will you have control of the curly hair classes or will the current owner maintain control? Do you get along w/ her? Is she someone you can work w/ for a long period of time?

Just FYI, Illinois is an employment at-will state (unless the k specifies a certain period of time) but watch out for a non-compete clause (aka covenant not to compete) in the k. Basically, it will stop you from obtaining employment at a different salon or starting your own salon w/in a certain distance of her salon for a certain number of years.

No doubt, you've got a great head on your shoulders. You know what you're doing. Plus, you must be kicking ass for her to approach you w/ this new option. Woot, woot!! Just wanted to add my 2 cents.

 

[Alpha1851]

Did you know I moved back to Minneapolis?

No wifey, I didn't. MN is "at will" also unless otherwise specified in the k.

All hail to the queen of curly hair.

 

[chatolandia]

Pogue, it really depends on the contract that she offers to you


and what's she's willing to negotiate


does she want a business partner, or a Senior Level employee?


and then, what would you want?

Now, and in 2 and 5 years from now...


time to get thinking, after having a few drinks

Once you have an idea of what you want, and what she's offering, talk to a lawyer... and get negotiating!



Good Luck!


this is a good thing for you

 

[Alpha1851]

Did she write the contract herself then?

 

[Alpha1851]

Who, the salon owner?

Yes, she did.

Yes, the salon owner. Since it's her business, I just thought she'd be more careful w/ it than that. Her decision to not seek legal advice will probably help you though.

 

[Yooper]

She is not the wisest business person, and luckily she has stayed afloat so far.

I hope that as the salon grows it can get more of a solid infrastructure established. We need a solid lawyer and an accountant.

How come so many small business owners hate to consult their lawyers/accountants?

They can be expensive but so many times the cost becomes minimal; saves so many screw ups.

A friend of mine is running a Pizza place. He's got a Superior Product, great location, good pricing. It is failing because he won't listen to anyone that knows what they are doing, business wise.

I would guess that a Salon owner would make most of his/her money by chair rental. A good contract would be essential.