Salon & Spa Management Chapter 1 – Flashcards
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Types of locations for salon/spas
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Hotels, medical spas, department stores, freestanding, fitness centers, mall/shopping centers
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The vast majority of small businesses start out as
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Sole proprietorships
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Partnership
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Two or more people operate for the common goal of making profit. Each partner has unlimited liability for all debts and profits of the business
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What is an advantage of a partnership?
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Partnerships are relatively easy to establish
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Limited liability company (LLC)
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A business arrangement that provides the limited-liability features of a corporation and the tax efficiencies and operational flexibility of a partnership (relatively new type of hybrid business structure that is now permissible in most states)
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Branches of cosmetology
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Practice of esthetics, practice of hair design, practice of manicuring, etc.
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When can manicurists use advanced techniques?
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After receiving training and services have been approved by State Board
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When obtaining a secured working capital loan, lenders will lend the business owner what % of your collateral?
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60-80%
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Used salon equipment sells for what % of its original value?
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25-60%
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Overhead
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Operating expenses, an ongoing expense of operating the business
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When filling out a job application form, the applicant should fill out
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Every line
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Financing
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Saving money, lending money, and how money is spent and budgeted within a business
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Receivables
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The amount due from individuals and companies. These are claims that are expected to be collected in cash.
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New businesses and/or businesses with bad credit may also still qualify for _____.
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Unsecured cash advance
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Reoccurring debt
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Debt or obligation that occurs on a continuing basis
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Entrepreneur
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A person who has possession of a new enterprise, venture, or idea, and assumed significant accountability for the inherent risks and the outcome
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Sublicense
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A license giving rights to occupy a rented space to a person or company that is not the primary holder of such location
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Place of business
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A fixed establishment, temporary location, or place, including any mobile barber or beauty salon, in which one or more persons practice as barbers, hairstylists, cosmetologists, manicurists, and estheticians
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Temporary location
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A location that is not permanent for your business. A term that denotes a finite period of time, with a defined beginning and an end
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Freestanding salon and spa
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A salon and spa whose structure is not attached to another structure
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Customer's goodwill
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The value of intangible assets such as a strong brand name, good customer relations, and good employee relations
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Employee discount
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Often used as incentive to work for a company, a discount on services or a percentage off products
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Demographics
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The profiles of characteristics of population used in government, marketing, or opinion research
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Privately owned salon and spa
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A business arrangement in which the owner has total and unlimited personal liability for profit or debts incurred by the business
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Sole proprietorship
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A business arrangement in which a single individual owns all the assets to the business, including the profits generated by it, and assumes all responsibilities for any liabilities or debts
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Joint venture
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A legal entity formed between two or more parties to undertake an economic activity together, like a general partnership but clearly for a limited period of time or a single project
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Corporation
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An institution that is granted a charter recognizing it as a separate legal entity having its own privileges, and liabilities distinct from those of its members
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S corporation
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For U.S. federal income-tax purposes, a corporation that makes a valid election to be taxed under sub chapter S of Chapter 1 of the internal revenue code. In general, S corporations do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to it'd shareholders
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Leased-space and booth-rental
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The latest ownership model in which the owner contracts for a given area of space and subdivides the space into several rooms or studios, much like a doctor's office, and each room is rented to a practitioner for a service
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What two boards may control the services offered in hotel salon/spas?
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Cosmetolog board and medical board
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What are the 7 benefits that salon/spa employees receive if they are part of a department store/fitness center salon and spa?
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1. Use of store lunch room/cafeteria 2. Employee discounts 3. Paid vacation 4. Sick pay (sometimes) 5. Group insurance 6. Profit sharing program involving all store employees 7. National & local store-paid marketing of beauty products and services
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3 factors that may influence what you pay for rent in a shopping center salon and spa
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Location, type of mall, state of the economy
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Medical spa
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Began to be introduced in the U.S. in 1997 by a group of innovative doctors. Its concept combines Western and holistic medicine combines with spa services to create a relaxing luxurious atmosphere
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Three most important factors to consider in choosing a name
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1. It should clearly identify the type of business 2. Should be short and memorable 3. Not so trendy that it becomes dated when styles change
