Business Practices
Business items test the math and the compliance basics an independent esthetician cannot ignore: pricing, product cost, recordkeeping, taxes, insurance, and the difference between an employee and a booth renter.
Pricing and cost
Know product cost per service, overhead per hour, and your target hourly wage. Markup is the amount added to cost; margin is profit as a percentage of the selling price - they are not the same number. Retail should carry a markup that covers shrinkage, shelf life, and your time.
Employment models
An employee works under the salon's license, schedule, and payroll taxes. A booth renter pays rent, sets their own hours and prices, and is generally self-employed: responsible for their own estimated taxes, self-employment tax, liability insurance, and - in most cases - their own sales tax permit. Misclassification is a real risk; the working relationship should match the arrangement on paper.
Records and compliance
Keep client records with intake forms, consent, service notes, and patch-test results. Retain them for the period your insurer and the rules require. Sales tax applies to retail product sales in Nebraska and may apply to some services; confirm current treatment with the Nebraska Department of Revenue rather than guessing. Carry professional liability insurance, keep an inventory system that rotates oldest stock first, and track expiry dates on actives and preservative-containing products.
Worked example
A 60-minute facial uses $5 of product. Your target is $40 per hour for your time, and overhead allocates $10 per treatment hour. Cost basis is $5 + $40 + $10 = $55. Adding a 20% profit margin gives a price near $69, not $55 plus $5 of "profit."
Traps
Confusing markup with margin. Pricing by what the salon down the street charges. Forgetting that unsold retail expires. And assuming booth rent means no tax obligation.