Cosmetology State Board Prep: Salon Business and Florida Law 100% Verified Correct(GRADED A)

Word-of-mouth advertising = -ANSWER The most effective way of building your clientele Personal assets = -ANSWER Property you own; house, car, jewelry, etc. Liabilities = -ANSWER The money you owe. Net worth = -ANSWER Assets minus Liabilities. Sole proprietorship = -ANSWER Business owned by one person. Partnership = -ANSWER Business owned by two or more persons. Corporation = -ANSWER Legal entity, separate from its shareholders, which is formed under legal guidelines. Franchise = -ANSWER An operating agreement in which a fee is paid to a parent corporation in exchange for fixtures, promotion, advertising, education and management techniques. Rental agreement = -ANSWER Lease Fixed rent = -ANSWER Set dollar amount paid per month to the lessor. Variable rent = -ANSWER Includes a set dollar amount paid per month plus a percentage of the total monthly income. Malpractice insurance = -ANSWER Protects the salon owner from financial loss that can result from employee negligence while performing hair, nail and skin care services on salon clients. Property/premise insurance = -ANSWER Covers the actual salon equipment and physical location in case of natural disasters, fire, theft or burglary, or accidents occurring at the business. Product liability insurance = -ANSWER Protects against financial loss arising because of injury or damage resulting from the use of a product. Un