Salon Financial Management Flashcards
7 cards from real Beauty Business practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Salon Financial Management flashcards as text
A salon owner wants to know the minimum revenue needed to cover all costs without profit or loss. What is this figure called?
Answer: Break-even point
The break-even point is the sales level where total revenue exactly equals total costs.
Which cost stays the same each month regardless of how many clients the salon serves?
Answer: Salon rent
Rent is a fixed cost that does not change with client volume.
A service priced at $80 uses $12 in product. What is the service cost of goods percentage?
Answer: 15%
$12 divided by $80 equals 15%.
What does 'net profit' represent on a salon income statement?
Answer: Revenue remaining after all expenses and taxes
Net profit is what remains after every expense, including taxes, is subtracted from revenue.
A commonly recommended target keeps total payroll (including owner) at what share of salon revenue?
Answer: Around 35-50%
Keeping payroll near 35-50% of revenue is a widely used benchmark for salon profitability.
Why should a salon track retail sales separately from service sales?
Answer: They have different profit margins and inventory needs
Retail and services carry different margins and require distinct tracking for accurate reporting.
What is 'cash flow' in a salon business context?
Answer: The movement of money into and out of the business
Cash flow measures the money coming in and going out over a given period.