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Chapter 3 Business Basics Flashcards | StudBud
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Chapter 3 Business Basics
Chapter 3 Business Basics
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Answers
1
What is not considered a total asset?
Checking and savings
Money owed
Savings bonds and T- bills
Property owned
2
A distributor sales consultant traveles, selling merchandise to skin care centers within their territory
True
False
3
A cash Reserve needed to keep a business going is referred to as operating capital.
False
True
4
Skills essential to a successful business owner include all except this?
Recognize new skincare trends & be able to manage the business
Do your own book keeping even if you're not good at it
Accept suggestions and criticism and exhibit self-control
Communicate well & adjust pricing with economics fluctuations
5
A marketing strategy tells how you plan to tell the world about your product or business.
False
True
6
Which type of insurance covers the Skin Care Center, equipment and location?
Inventory insurance
Property or premise insurance
Business insurance
Local insurance
7
Assets minus liabilities equals?
Collateral
Debt
Credit
Net worth
8
Another word for income is?
Asset
Earning potential
Projected income
Revenue
9
Workers Compensation Insurance is controlled by the state and required by law.
True
False
10
A cash Reserve that can be used when business is slow or unexpected expenses are incurred
Bank
Debit
Loan
Line of credit
11
Why is an Exit Plan important?
It gives you a strategy in case you need to call it quits.
It reduces excess stock
It helps with long range goals
It is an easy way out
12
Which will not determine your target market or your Market need?
Determine if there is enough discretionary income per capita
Determine if there is enough parking.
1st how many skin care centers/estheticians are working a 10 mile radius
Determine household income and average age of potential clients
13
Payments received for services and retail sales are referred to as income.
True
False
14
Estimating possible revenues earned and expenses paid out is called a projection.
False
True
15
About what percentage of a skin care center expenses do salaries and commissions account for?
40%
30%
25%
50%
16
Deciding to keep selling a retail product depends on its turnover rate.
True
False
17
Any activity that draws positive attention to the skin care center
Propaganda
Promoting
Public relations
Advertising
18
Although taxes & stock are expenses, the biggest expense of a business is staff COMPENSATION.
True
False
19
What is a typical commission rate for retail sales in the salon and Spa industry.
8-15 %
30-40%
35-50%
3-5%
20
Insurance is (risk management assessment of financial events that may occur requiring a settlement.
False
True
21
An accountant is helpful in all ways bit l but one?
Help find the right products to support your brand
Estimate how much a bank may lend you, based on net worth
Give financial advice on business type ownerships & tax benefits
Set up basic book keeping systems & evaluate profit & loss
22
Franchisee pays a fee to a parent Corporation
False
True
23
What is not an element of business plan essentials?
Market strategy & market potential & exit plan
Origin of company & company goals, 3-5 year projections
Background checks, customer profiles and limitations
Executive summary- (outlining goals & objectives)
24
What is a social security tax?
A state tax
A retirement fund for independent contractors
A property tax for people over 65
Withholding tax from employees for retirement fund in U.S.
