Financial Management and Pricing Flashcards
7 cards from real Beauty Business practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Pricing flashcards as text
A salon owner wants to know how much profit remains after covering all operating expenses. Which figure should she look at?
Answer: Net profit
Net profit is what remains after all operating expenses are deducted from revenue.
If a haircut costs $18 in product, labor, and overhead and is priced at $45, what is the gross profit margin per service?
Answer: 60%
Gross profit is $27 on a $45 price, which equals 60%.
What is the primary purpose of a break-even analysis for a new salon?
Answer: To determine the sales needed to cover all costs
Break-even analysis identifies the sales volume required to cover fixed and variable costs.
Rent, insurance, and salaried staff are examples of what type of cost?
Answer: Fixed costs
Fixed costs stay the same regardless of how many services are performed.
A booth renter pays a weekly flat fee to the salon owner. This income for the owner is best classified as:
Answer: Rental income
Booth rent collected from independent stylists is rental income to the owner.
Which pricing strategy sets service prices based on what competitors in the area charge?
Answer: Competitive pricing
Competitive pricing benchmarks prices against similar local salons.
Why should a salon track its average service ticket over time?
Answer: To measure revenue per client visit and spot growth opportunities
The average ticket shows how much each client spends and highlights upselling potential.