Business Practices, Law and Regulations
Business Practices
Know your numbers
Price a service from cost, not guesswork: product cost per service + your time (target hourly rate) + overhead share (rent, utilities, insurance, laundry, software) + profit margin. Retail typically uses keystone pricing (double wholesale). Track service and retail revenue separately; a fully booked chair with no margin is a failing business. Build a written cancellation and no-show policy, keep a card on file if you use one, and post prices so quotes stay consistent.
Records and clients
Keep a card per client: date, services, products used, patch tests, contraindications, consent signature, and notes. Before-and-after photos and testimonials need written permission, and social media is still advertising - no false claims, no implying you can "cure acne." Protect client information and never post someone's skin concern without consent.
Employment and tax basics
A booth renter pays rent, sets their own schedule and prices, and receives a 1099; an employee is directed by the owner, is paid wages, and receives a W-2. Misclassifying a renter as an employee (or the reverse) creates tax and liability problems. Carry professional liability insurance, keep business and personal money separate, and remember that in Michigan sales tax applies to retail goods but generally not to personal services.
Worked example: a 60-minute facial uses $6 of product, your target labor is $30, overhead share is $12, and you want 20% profit - cost is $48, so price near $60 rather than matching a competitor's $45. Trap: confusing revenue with profit, or discounting a service that was already underpriced.
Law and Regulations
Who regulates what
Michigan licenses estheticians through the Department of Licensing and Regulatory Affairs (LARA) under the Board of Cosmetology, within the Public Health Code. Both the individual and the establishment must be licensed; you may only perform services in a licensed facility, within the scope of your license, and you must display your license as required. Scope covers skin care, makeup, and hair removal by methods within your training - not diagnosis, not prescribing, not injectables, and not medical devices beyond your authorization.
Everyday compliance
Work only on intact, healthy skin; refer suspicious lesions to a physician rather than "working around" them. Obtain informed consent, keep records, and follow the sanitation rules for every client. Advertising must be truthful and must not imply medical treatment. Never allow an unlicensed person to perform services, and never work while your license is lapsed or your establishment license is expired.
Traps
- Assuming a business license replaces a personal license - you need both.
- Assuming training hours, minimum age, and continuing-education rules are frozen; they change, so verify current Board rules instead of trusting an old prep class.
- Treating the scope of practice as "anything a doctor's office does, but cheaper."
Rule of thumb: when a request falls outside your license, stop, explain, and refer. Example: a client asks you to "freeze off" a mole or to treat them with a medical laser; both are outside esthetic scope, so you decline, document, and suggest a dermatology referral.