Managing a Business

Managing a Business

Are you ready to test your knowledge about business management? This ten-question multiple-choice quiz will explore some fundamentals regarding your business plan, business basics, and infrastructure. After completing all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

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How long does it take on average to break even for your new business?
A majority of new businesses do not become successful overnight. On average, it takes roughly 1.5 to 3 years for a new business to break even and roughly 7 to 10 years for them to become truly successful.

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A roadmap for your business and a tool that helps you obtain outside funding is called a ______.
A business plan is a roadmap for your business and a tool that helps you obtain outside funding. It should answer questions relating to what you want to sell, build, or offer as a service, who your ideal customer is, your objectives, and what your 1-year and 5-year targets will be. Answering these questions will help you get outside funding.

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What question(s) should your business plan answer?
A business plan will help you understand what your business will be and help get outside funding. It would be best to figure out what your market is, who your customer is, and what your goals and objectives are.

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Why is money management essential?
Money management skills are essential because you need to understand bookkeeping, make and keep a budget, and pay bills on time. By mastering these skills, you will be able to set your business up for growth. The more adept you are in managing your money, the better your cash flow will be.

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What are the primary reasons for recordkeeping?
Detail tracking, planning, and documentation for legal compliance and tax preparation are the primary reasons for recordkeeping. Detail tracking involves keeping information on your customers, inventory, and sales. Detail tracking will help you create a budget that will help you with your overall growth. Planning coincides with your budget as you track where you've been, where you are, and where you are going with your business. Documentation for legal compliance and tax preparation are essential for your business to exist.

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What are the primary records needed for legal compliance?
The primary records you need for legal compliance are contracts, leases, other legal agreements, licenses, and permits. It is important to have them available so you can check the terms, conditions, and obligations of both parties. You should always have the original copies of your documents for your legal safety. Licenses and permits will need to be shown as required by different levels of government agencies.

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What should you use to manage your inventory?
Inventory management is crucial when managing your business and its growth potential. The magnitude of your business' inventory can help you decide what system you will use based on what you want to track automatically. There are multiple ways to manage your inventory. You can utilize an e-commerce platform with inventory management capabilities, inventory management software, or excel or QuickBooks.

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What are the three common approaches for calculating the value of your business?
The three most common approaches for calculating your business's value are assets, income, and market opportunity. For an asset-based approach, you calculate the net value of all the assets your business owns, take into account depreciation, and the result is your firm's value. For an income-based approach, you focus on cash flow and investment return over a single year. For a market-based approach, you would look at sales figures based on industry averages as a multiplier. A market-based approach is the most subjective of the three approaches.

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What can damage your relationship with a vendor?
Frequently changing your purchase order, spotty payments, and lack of communication can lead to a vendor dropping you as a partner. Damaging your relationships with vendors can be detrimental to your entire business. It can affect your inventory and your overall growth.

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What is the foundation of your business success?
Customers are the foundation of any business's success. The customer provides your business with revenue, keeps it in existence, and funds employment. Improving your customer service will lead to an increase in your business' revenue.

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