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Salon business. Regulations Business laws Insurance. Salon business. Local regulations Building renovations ( local business codes ) Federal laws Social security, unemployment compensation, cosmetics and luxury tax, OSHA State laws Sales tax, licenses, employee compensation

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Salon business

Salon business

RegulationsBusiness laws

Insurance


Salon business1
Salon business

  • Local regulations

    • Building renovations ( local business codes )

  • Federal laws

    • Social security, unemployment compensation, cosmetics and luxury tax, OSHA

  • State laws

    • Sales tax, licenses, employee compensation

  • Income tax laws

    • Both federal & state government

  • Insurance

    • Malpractice, premises liability, fire, burglary & theft & business interruption


Salon business2
Salon business

  • Salon ownership & operation

    • Individual ownership

      • Privately owned business

        • Proprietor is owner & manager

        • Proprietor determines policy

        • Proprietor receives profits & bears all losses

    • Partnership

      • Privately owned by two or more parties

        • More capital is available

        • Combined ability and experience

          • Makes it easier & possibly more successful

        • Profits are shared

          • Not always equally

        • Partners assume each other’s unlimited liability for debt


Salon business3
Salon business

  • Corporation

    • Ownership shared by stockholders

    • Charter is required by state

    • Subject to taxation & regulation y state or province

    • Managed by Board of Directors

    • Profits shared by stockholders

      • Profits proportionate to number of shares owned

    • Stockholder cannot lose more than original investment


Salon business4
Salon business

  • Purchasing an established salon

    • Written purchase agreement

      • Advice from both an accountant & an attorney is advised

    • Inventory statement

    • Investigate to make sure no default in the payment of debts

    • Correct identity of owner

    • Use of salon name & reputation

      • Called “Blue Sky”

    • Non-compete clause


Salon business5
Salon business

  • Drawing up a lease

    • Exempt equipment & fixtures that are separate from lease

    • Agree on necessary renovations

    • Option to sublease

  • Protection against fire, theft, lawsuits

    • Keep premises secure & locked

    • Purchase insurance

      • Liability, fire, malpractice, burglary

    • Do not violate medical law

      • Refer clients as needed to a physician

    • Know cosmetology law & sanitary codes in your state


Salon business6
Salon business

  • Keep accurate records

    • ignorance of the law is no excuse

  • Business operation

    • Sufficient investment capital

    • Efficiency of management

    • Good business procedures

    • Cooperation between management and employees

    • Trained & experienced salon personnel

    • Pricing of services


  • Salon business7
    Salon business

    • Allocation off money

      • A good accountant & accounting system are valuable

    • Average expenses

    • Importance of record keeping

      • Good records are necessary to meeting requirements of local, state/province, & federal laws regarding taxes & employees


    Salon business8
    Salon business

    • To determine income, expenses, profits, loss

    • To assess value of salon for prospective buyer

    • To arrange financing

    • For various reports

      • Income tax, social security, unemployment & disability insurance, accidents, payments of some leases


    Salon business9
    Salon Business

    • Weekly/monthly reports

      • Make comparisons with other years

      • Detect change in demand for services

      • Check on use of material

        • As compared to the types of services rendered

      • Control expenses and waste


    Salon business10
    Salon Business

    • Daily records

      • Allows owner to know how well business is functioning

        • Sales slips

        • Appointment books

        • Petty cash receipts

          • Check with accountant to determine how long to keep these documents


    Salon business11
    Salon Business

    • Purchase and inventory records

      • Help maintain perpetual inventory

      • To prevent overstocking

      • Alert you of pilfering

      • To establish net worth of business at year end

        • Consumption supplies are used in daily operations. Retail supplies are sold to clients

      • Plan future orders

      • Service records

        • Keep record of all treatments given & merchandise sold


    Summary
    Summary

    • There are many considerations in establishing a business that range from selecting an efficient salon layout, to inventory control, to payroll record maintenance, to filing accurate tax returns, to maintaining a loyal, happy clientele. A great deal more research and planning will be required than simply mastering the contents of this chapter.


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