Business Management Flashcards
7 cards from real CHS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Business Management flashcards as text
A client requests a full refund after a color service they dislike. What is the most professionally appropriate first response?
Answer: Listen to the client's concerns and offer to correct the service at no charge
Offering a complimentary correction addresses the client's dissatisfaction while giving the salon the opportunity to resolve the issue and retain the client.
Which type of business structure provides the owner personal liability protection while avoiding double taxation?
Answer: Limited Liability Company (LLC)
An LLC protects owners' personal assets from business debts while allowing profits to pass through to personal tax returns, avoiding corporate double taxation.
What does 'accounts receivable' represent for a salon?
Answer: Money owed to the salon by clients or insurance companies for services already rendered
Accounts receivable represents money clients owe the salon for services already provided but not yet paid for, such as corporate billing arrangements.
A salon owner notices a top stylist is generating 40% of total revenue. What business risk does this create?
Answer: Over-reliance on one employee makes the salon vulnerable if that stylist leaves
When one employee drives a disproportionate share of revenue, the salon is at high risk of significant income loss if that person resigns or leaves.
What is the purpose of tracking 'client retention rate' in a salon?
Answer: To determine how many clients return for repeat services over time
Client retention rate measures the percentage of clients who return for services, indicating satisfaction, loyalty, and the salon's long-term revenue stability.
Under US labor law, which factor most clearly distinguishes an employee from an independent contractor in a salon?
Answer: The degree of behavioral and financial control the salon exerts over the worker
The IRS and Department of Labor assess behavioral control (how work is done) and financial control (business aspects) to determine worker classification.
Which action best helps a salon manage cash flow during slow seasonal periods?
Answer: Offering prepaid service packages or gift cards to bring in revenue in advance
Prepaid packages and gift cards generate immediate cash inflow that can offset slower revenue periods while building client commitment.