Beauty Business Beauty Business Techniques 2

Question 1

What is the primary purpose of a SWOT analysis in a beauty business plan?

Accepted Answer

To identify strengths, weaknesses, opportunities, and threats

Answer

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?

Accepted Answer

Penetration pricing

Answer

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?

Accepted Answer

The percentage of clients who return for repeat services

Answer

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?

Accepted Answer

Single-member LLC

Answer

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?

Accepted Answer

Listen actively, acknowledge the concern, and offer a resolution

Answer

Active listening and acknowledging concerns before offering a resolution builds trust and often retains the client relationship.

Beauty Business Practice Test