Nail Technology Program

Foundation 10: The Beauty Business

Owning a Business, Booth Rental & Marketing|37 Questions|Board Exam Prep

Student Name

Date

Instructor

Score

Vocabulary Matching

Match each numbered term with the correct lettered definition.

Terms

1.Business Plan

2.Sole Proprietorship

3.Partnership

4.Corporation

5.Demographics

6.Booth Rental

7.Overhead

8.Revenue

9.Target Market

10.Liability Insurance

Definitions

A.A business owned and operated by two or more people who share profits and liabilities

B.The total income generated by a business from services and product sales before expenses

C.The fixed ongoing costs of running a business, such as rent, utilities, and insurance

D.A written document that describes your business goals, strategies, target market, and financial projections

E.The specific group of consumers most likely to purchase your services based on age, income, and preferences

F.Statistical data about a population including age, gender, income, and lifestyle used for business planning

G.A business structure owned by one individual who has unlimited personal liability

H.Insurance that protects a business owner from claims arising from injuries or damages during services

I.An arrangement where a licensed professional rents a station within an existing salon

J.A business structure that is a separate legal entity from its owners, providing limited personal liability

Fill in the Blank

Complete each statement with the correct term or phrase.

Question 11Fill in the Blank

Before opening a salon, it is essential to create a detailed plan that outlines your goals, finances, and marketing strategy.

Question 12Fill in the Blank

The physical location and appearance of a salon is a critical factor because it creates the client's first .

Question 13Fill in the Blank

A salon owner must obtain all required local, state, and federal and permits before opening for business.

Question 14Fill in the Blank

The process of promoting your salon services to attract and retain clients is called .

Question 15Fill in the Blank

When calculating whether a salon is profitable, you subtract total from total revenue.

Question 16Fill in the Blank

An LLC (Limited Liability Company) provides owners with personal liability protection similar to a while maintaining simpler tax filing.

Question 17Fill in the Blank

Booth renters are required to carry their own insurance and manage their own taxes as independent business owners.

Question 18Fill in the Blank

The salon's includes the name, logo, color scheme, and overall visual identity that represents the business.

Multiple Choice

Select the best answer for each question.

Question 19Multiple Choice

The most important factor to consider when choosing a location for a new salon is:

A. The color of the building

B. Visibility, foot traffic, accessibility, and proximity to your target market

C. Being far from competitors so no one compares prices

D. The cheapest rent available in the area

Question 20Multiple Choice

A business plan is important because it:

A. Is only needed for bank loan applications

B. Serves as a roadmap for your business goals, finances, and growth strategies

C. Guarantees the success of your business

D. Replaces the need for licenses and permits

Question 21Multiple Choice

Which business structure offers the owner limited personal liability and is a separate legal entity?

A. Sole proprietorship

B. Partnership

C. Corporation

D. Booth rental

Question 22Multiple Choice

The key to a successful salon includes all of the following EXCEPT:

A. Clean, welcoming environment

B. Well-trained, professional staff

C. Ignoring client feedback and complaints

D. Consistent marketing and community presence

Question 23Multiple Choice

When setting prices for salon services, a salon owner should consider:

A. Only the cost of products used

B. Overhead costs, product costs, labor, desired profit margin, and local market rates

C. Charging the lowest prices in the area

D. Whatever the technicians want to charge

Question 24Multiple Choice

The primary advantage of owning a franchise salon versus starting from scratch is:

A. Complete creative freedom with no restrictions

B. Built-in brand recognition, training programs, and proven business systems

C. Lower startup costs than any independent salon

D. No fees or royalties to the franchise company

Question 25Multiple Choice

Which marketing strategy is most effective for a local salon?

A. National television advertising

B. A combination of social media, local partnerships, referral programs, and community events

C. Only word-of-mouth with no other marketing

D. Reducing prices to the lowest in town

Question 26Multiple Choice

Good salon management includes all of the following EXCEPT:

A. Maintaining accurate financial records

B. Hiring and training qualified staff

C. Avoiding client feedback surveys

D. Ensuring compliance with health and safety regulations

True / False

Write T for True or F for False.

Question 27True / False

A sole proprietorship is the simplest form of business ownership.

True

False

Question 28True / False

Salon owners do not need liability insurance if they rent booth space to independent contractors.

True

False

Question 29True / False

A good business plan includes financial projections for at least the first one to five years.

True

False

Question 30True / False

The salon atmosphere, including decor, music, and cleanliness, has no impact on client satisfaction.

True

False

Question 31True / False

In a partnership, each partner shares responsibility for the business debts and obligations.

True

False

Question 32True / False

An effective marketing strategy targets everyone rather than a specific demographic.

True

False

Question 33True / False

Employee management includes providing clear job descriptions, ongoing training, and regular performance reviews.

True

False

Question 34True / False

Salon owners are not required to comply with OSHA regulations if they have fewer than five employees.

True

False

Short Answer

Answer each question in 2-4 complete sentences.

Question 35Short Answer

Describe the key elements that should be included in a salon business plan and explain why each is important.

Question 36Short Answer

Compare the advantages and disadvantages of three different business structures: sole proprietorship, partnership, and corporation.

Question 37Short Answer

Explain three marketing strategies that a new salon owner could use to attract clients during the first year of business.