Business Management Flashcards

A salon owner wants to evaluate staff performance. Which metric best measures a stylist's contribution to salon revenue?

Answer: Service revenue generated per hour

Service revenue per hour measures how effectively a stylist converts their time into income for the salon.

What does 'booth rental' mean in a salon business context?

Answer: Renting a styling chair or station from the salon owner as an independent contractor

Booth rental is an arrangement where a stylist pays the salon owner a flat fee or percentage for use of a station while operating as an independent contractor.

Which strategy is most effective for reducing no-show appointment rates?

Answer: Sending automated appointment reminders via text or email

Automated reminders prompt clients to confirm or cancel in advance, significantly reducing no-shows.

A salon's 'cost of goods sold' (COGS) primarily refers to what?

Answer: The direct cost of products and materials used to deliver services

COGS in a salon represents the cost of hair color, chemicals, and retail products directly consumed in providing services.

When setting retail product prices, what does the term 'keystone markup' mean?

Answer: Marking up the wholesale price by 100% to set the retail price

Keystone markup doubles the wholesale cost, so a product bought for $10 sells for $20, providing a 50% gross margin.

What is the primary purpose of a salon's employee handbook?

Answer: To document policies, expectations, and procedures for staff

An employee handbook communicates workplace policies, dress codes, scheduling rules, and conduct expectations to all staff.

Which financial document shows a salon's revenues, expenses, and net profit over a specific time period?

Answer: Income statement (profit and loss statement)

The income statement summarizes all revenue earned and expenses incurred during a period, revealing the net profit or loss.