Business and Ethics
Business and Ethics
This domain tests pricing, inventory, retail, marketing, insurance, record retention, and ethical decision-making in an esthetics business.
Core rules
- Price services from labor, product cost, overhead, and target profit, not only competitor prices. Track cost per service and reorder points.
- Use written service and retail policies; disclose fees and cancellation terms clearly.
- Market truthfully. Do not claim medical cures, guaranteed results, or credentials you do not hold.
- Carry appropriate liability insurance, keep licenses current, and follow record-retention rules.
- Avoid conflicts of interest and pressure selling; recommend products the client needs and can use.
Worked example
A 60-minute facial uses $10 of product; overhead is $25 per hour; the esthetician's pay is $30 per hour; target profit margin is 20%. Total cost is $65. Price equals $65 divided by 0.8, or $81.25, rounded to $85. Reasoning: dividing by the complement of the profit margin builds profit into the price rather than adding a markup to cost.
Traps
- Pricing only by competitors can hide losses.
- 'Guaranteed results' claims create legal and ethical risk.
- Undisclosed fees damage trust and may violate consumer rules.
- Expired products or unlicensed staff undermine safety and insurance coverage.