In the Beginning ...
Outlines funds a business will need to run efficiently by projecting revenue and expenses.
What is an operating budget?
A business owner uses their own savings to start up a business?
What is bootstrapping?
(Cost * desired profit margin) = cost
What is the selling price?
Assets - Liabilities
What is owner's equity?
Used to determine the cost of acquiring new customers.
What are customer acquisition costs?
This helps the entrepreneur calculate their startup costs, which they will incur when starting a new business,
What is estimating costs?
Business must pay back these loans.
What are SBA loans?
Shows net & gross income, income tax expense & break-even point
What is an income statement?
This report shows the company's assets, liabilities and equity for a specific period.
What is a balance sheet?
Marketing expenses + sales expenses ÷ number of new customers
What is customer acquisition cost?
A business plan, down payments, logo design & company signs, website design, rent, equipment, etc.
What are common startup costs?
They help fund a business or a specific project, usually for a stake in the company.
What is an angel investor?
Income - the cost of goods sold - expenses
What is net income?
The point where revenue covers expenses, the formula is Total Expenses ÷ Sales Price.
What is the break-even point?
Number of customers at the end of a period - number of customers at the beginning ÷ number of customers at the beginning (multiple by 100 to get the percentage)
What are customer retention rates?
Rent, utilities, employee payroll, taxes, insurance and advertising.
What are recurring costs?
An entrepreneur pre-sells products on an online platform to help fund a new business.
What is crowdfunding?
Income - cost of goods sold
What is gross income?
Cash, accounts receivable, inventory, equipment, company vehicles, etc.
What are assets?
A company's marketing plan might not be effective if this is high.
What are customer acquisition costs?
Permits, logos, web design, company signs, equipment, ec.
What are one-time startup expenses?
This is for business engaged in scientific research and development and don't have to be paid back.
What are SBA grants?
Gross profit * tax rate
What is income tax expense?
Accounts payable, bank and SBA loans, mortgage payments and credit card balances.
What are liabilities?
This may be more cost-effective that getting new customers.
What are keeping current customers?