Is your Salon Rent too high?

ARE YOU PAYING TOO MUCH RENT?

If you were negotiating a lease today how much would you be willing to pay?

The average independent salon pays 20% more in rent than a comparable chain salon. Your lease may have been signed a few years ago and many lease agreements include an annual increase in base rent. Even if your lease does not include increases you may be paying too much rent. Check your area yearly to find out the rates for which comparable facilities are available.
Your rent should not be more that 7% of your sales. If you have cheaper rent your marketing costs will be higher that 3% of sales. If your rent is greater than 7% your marketing expenses should be less.

Call us for more figures on costs of doing business at 513-528-5100.

When salons go out of business it is usually because expenses outnumber income. It is increasingly important to manage your expenses efficiently and one of our largest items is rent. You are not helpless to reduce this expense just because you have a lease. Property owners have seen the empty store fronts in strip centers, the many small salons going out of business and the decline of value in their own property. They know they are in a buyer's market. Property managers and landlords shop their market and know the value of space you are leasing. You owe it to yourself to do the same.

It's in your property manager's best interest for your business to thrive and holding down the amount you pay in rent will facilitate this. If you find that space in your area is going for less than the amount you are paying and many small businesses are failing, you are in a prime position to renegotiate your lease. As any business proposition, this should be approached in a professionally to be executed effectively.

Use this format as a guide in designing you letter. Get your lawyer and accountant involved in the financials and letter format if possible. If you don't get a response within 30 days send a second request and then call them.
See our marketing and management articles on our web site at .
Call us for more marketing and management ideas at 513-528-5100.

Sources of information RA Lipton-Beauty Store Business, Retail Association, The GreenBook

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