Barbershop Business & Finance Flashcards

What is the primary benefit of maintaining a daily appointment book or scheduling software in a barbershop?

Answer: It maximizes chair utilization and helps forecast revenue

Scheduling systems optimize chair utilization, reduce idle time, and allow owners to project revenue based on booked appointments.

Under the employee model (as opposed to booth rental), which expense does the barbershop owner take on that the barber does NOT pay?

Answer: Employer's share of FICA payroll taxes

When barbers are employees, the employer pays 7.65% of wages as the employer's share of Social Security and Medicare (FICA) taxes.

What does 'client retention rate' measure in a barbershop business?

Answer: The percentage of clients who return for repeat visits within a given period

Client retention rate calculates the proportion of existing clients who continue to use the barbershop's services over a defined time frame.

A barber sells $200 in retail hair products in a week. The cost of those products was $120. What is the gross profit margin on retail sales?

Answer: 40%

Gross profit is $200 - $120 = $80, and the margin is $80 ÷ $200 = 40%.

Which of the following is considered a variable cost for a barbershop?

Answer: Disposable supplies like razor blades and neck strips

Variable costs such as disposable supplies fluctuate directly with the volume of services performed, unlike fixed costs like rent.

What is the purpose of a Point of Sale (POS) system in a barbershop?

Answer: To process payments, track sales, and generate financial reports

A POS system processes client payments, tracks service and retail sales, and generates reports that help with financial management.

Which business document outlines a barbershop's target market, competitive analysis, and financial projections?

Answer: Business plan

A business plan details the shop's goals, target customers, competitive landscape, marketing strategy, and financial forecasts.