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Salon business

Salon business

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Salon business

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  1. Salon business RegulationsBusiness laws Insurance

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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.