Beauty Business Beauty Business Techniques 2 — Questions and Answers
Question 1: What is the primary purpose of a SWOT analysis in a beauty business plan?
- To identify strengths, weaknesses, opportunities, and threats (Correct answer)
- To calculate monthly revenue projections
- To determine employee scheduling needs
- To set retail product prices
Correct answer: To identify strengths, weaknesses, opportunities, and threats
A SWOT analysis evaluates internal strengths and weaknesses alongside external opportunities and threats to guide strategic planning.
Question 2: Which pricing strategy involves setting service prices lower than competitors to attract new clients?
- Penetration pricing (Correct answer)
- Premium pricing
- Bundle pricing
- Cost-plus pricing
Correct answer: Penetration pricing
Penetration pricing uses lower initial prices to quickly build a client base and gain market share.
Question 3: What does the term 'client retention rate' measure in a beauty business?
- The percentage of clients who return for repeat services (Correct answer)
- The number of new clients gained per month
- The average tip amount per service
- The ratio of walk-ins to appointments
Correct answer: The percentage of clients who return for repeat services
Client retention rate tracks the percentage of existing clients who continue booking services over a given period.
Question 4: Which legal structure offers personal liability protection while allowing pass-through taxation for a solo beauty professional?
- Single-member LLC (Correct answer)
- Sole proprietorship
- General partnership
- C corporation
Correct answer: Single-member LLC
A single-member LLC provides liability protection while allowing profits to pass through to the owner's personal tax return.
Question 5: What is the recommended approach when handling a dissatisfied client's complaint about a beauty service?
- Listen actively, acknowledge the concern, and offer a resolution (Correct answer)
- Explain why the service was performed correctly
- Offer a full refund immediately without discussion
- Refer the client to the salon manager and step away
Correct answer: Listen actively, acknowledge the concern, and offer a resolution
Active listening and acknowledging concerns before offering a resolution builds trust and often retains the client relationship.
Question 6: Which marketing metric tracks how much a beauty business spends to acquire each new client?
- Customer acquisition cost (Correct answer)
- Return on investment
- Conversion rate
- Lifetime value
Correct answer: Customer acquisition cost
Customer acquisition cost (CAC) divides total marketing spend by the number of new clients gained in that period.
Beauty Business Beauty Business Techniques 2
What is the primary purpose of a SWOT analysis in a beauty business plan?