Salon business

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 others 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.