Q&A Hero

Q: Record keeping for a very small business can be accomplished by a journal and files for storing ________. A) records of transactions B) details of seed capital C) details of start-up expenses D) details of marginal costs

Q: The systematic recording, reporting, and analysis of the financial transactions of a business is called ________. A) accounting B) reconciliation C) cost analysis D) cash flow analysis

Q: Why is it best to pay expenses for your business with a check, not with cash? A) A check can't be traced. B) Cash is easier to lose. C) A check provides written proof of payment. D) Paying with a check keeps check printing companies and banks in business.

Q: Jenny is worried because when she calculates the EOU for her business, the gross profit is too low. Explain whether or not she could improve it by finding an office with a lower monthly rent.

Q: Depreciation is the percentage of value of an asset added each year to reflect wear and tear on the asset.

Q: Fixed operating costs can change over time.

Q: ________ is what remains when you subtract fixed and variable costs and taxes from revenues. A) Operating profit B) Gross profit C) Net profit D) Gross margin

Q: Fixed operating costs ________. A) are not included in COGS B) are not direct costs of creating each product C) include expenses like rent D) All of the above.

Q: In the phrase I SAID U R + "Other FXs", UR stands for ________. A) utilities, rent B) unknown rates C) unforeseen revisions D) unforeseen rates

Q: Carla sells hot coffee, cider and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities = $100, Salary = $2,000, Advertising = $0, Insurance = $0, Interest = $0, Rent (cart) = $600, Depreciation = $0. Calculate Carla's average sale per customer. A) $4.50 B) $4.00 C) $5.00 D) $0.80

Q: Carla sells hot coffee, cider and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities = $100, Salary = $2,000, Advertising = $0, Insurance = $0, Interest = $0, Rent (cart) = $500, Depreciation = $0. What are Carla's fixed costs? A) $2,000 B) $2,100 C) $2,600 D) $2,700

Q: Total Revenue divided by ________ = units sold. A) selling price B) profit C) total operating costs D) cost

Q: If a business sells 5,000 units for a total profit of $200,000, what is its profit per unit? A) $50 B) $400 C) $40 D) $500

Q: If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its net profit? A) $3,000 B) $3,220 C) $1,150 D) $0

Q: The percentage of value of an asset subtracted each year until the value becomes zero, to reflect wear and tear on the asset, is called ________. A) depreciation B) inventory C) deductible D) reduction

Q: Which of the following is not a category of fixed costs? A) rent B) advertising C) capital D) depreciation

Q: Depreciation is a(n) ________. A) fixed operating cost B) variable cost C) flexible cost D) administrative cost

Q: Explain the concept of payback period.

Q: What are variable costs? How are they broken down?

Q: Variable costs are expenses that must be paid regardless of whether sales are being generated.

Q: It is wise to keep a reserve equal to one-fourth of the start-up investment.

Q: A critical cost for a beginning business is the seed capital.

Q: ________ will tell you how long it will take you to earn enough profit to cover your start-up investment. A) Return on sales B) Return on assets C) Payback D) ROI

Q: You should keep reserves of at least ________. A) 3 months of fixed operating costs B) 6 months of fixed operating costs C) one half of the start-up investment D) one year of fixed operating costs

Q: Business start-up cost information can be obtained from ________. A) advisors B) quotations from vendors C) industry data D) All of the above.

Q: Carla sells hot coffee, cider and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities = $100, Salary = $2,000, Advertising = $0, Insurance = $0, Interest = $0, Rent (cart) = $500, Depreciation = $0. What is Carla's monthly cost of goods sold? A) $800 B) $600 C) $450 D) $100

Q: The cost of material used to make a product and cost of labor used to make the product is associated specifically with a single ________ of sale. A) unit B) hour C) dozen D) dollar

Q: The Thomas Register of American Manufacturers lists companies that specialize in creating ________. A) products B) prototypes C) copyrights D) services

Q: If you sell $2500 worth of product, pay COGS of $800 and other variable costs of $360, what is your gross profit? A) $1340 B) $1700 C) $2464 D) $2500

Q: A(n) ________ is a model or pattern that serves as an example of how a product would look and operate if it were manufactured. A) prototype B) archetype C) typology D) model

Q: Start-up investment is the one-time expense of opening a business. It is also called ________. A) entry cost B) seed capital C) down payment D) beginning capital

Q: Other variable costs per unit subtracted from Total COGS per unit equals ________. A) cost of goods sold per unit B) contribution margin per unit C) total other variable costs per unit D) operating margin per unit

Q: There are two categories of variable costs: ________. A) net variable costs and cost of goods sold B) gross costs and net variable costs C) cost of goods sold and other variable costs D) interest and taxes paid

Q: A litmus test for profitability is ________. A) the business plan B) the economics of one unit (EOU) C) the business model D) net profit

Q: Which two categories below are used for business costs? A) materials and labor B) gross and net C) fixed and variable D) cost of goods sold and administrative

Q: The bedrock principle of business is that it should ________. A) please its customers B) advertise better than its competitors C) earn a profit D) continually improve

Q: Discuss the eight step sales call.

Q: Describe three sales call behaviors used by successful salespeople.

Q: Asking the right questions is optional during a sales call or presentation.

Q: It is not really necessary to prequalify your customer before the sales call since it can be done during the sale.

Q: Which of the following is not a prequalification question? A) Is this individual in my market? B) Does he or she need my product? C) How will he or she pay for it? D) Can he or she afford it?

Q: Every sales call is an opportunity to ________. A) improve your selling skills B) talk and talk and talk to the customer C) exploit your customers D) None of the above.

Q: People you think might be receptive to your sales presentation are called ________. A) consumers B) customers C) prospects D) interested parties

Q: Successful businesses are built on ________. A) repeat business B) frequent sales C) big sales D) highly profitable sales

Q: ________ are people and/or organizations that may be receptive to a sales pitch. A) Prospects B) Potentials C) Probables D) Possibles

Q: What should you do when a customer raises objections during a sales call? A) Ignore them; the customer will forget about them by the time the call is over. B) Acknowledge objections as they arise and respond to them. C) Shorten the sales call; don't waste time on a customer who has objections to your product or service. D) Say, "I'll get back to that in a moment."

Q: The most important thing to do during a sales call is ________. A) listen, in order to learn what the customer needs B) keep talking so the customer doesn't lose interest C) ask questions to keep the customer engaged in the sales call D) push for the sale early and don't mention price until the end

Q: During each sales call you make, focus on this question. A) How can I make the customer buy from me? B) What does the customer need? C) How can I convince the customer to ignore his/her objections? D) How do I handle the objections that will be raised?

Q: Outline the principles of selling.

Q: Good salespeople ________. A) believe in what they are selling B) feel good about what they are selling C) All of the above. D) None of the above.

Q: Objectives during a sales call include making the customer ________. A) want to buy the product or service from you B) aware of your product or service C) want to buy your product or service D) All of the above.

Q: An appointment with a potential customer to explain or demonstrate your product or service is called a ________. A) sales call B) pre-qualification C) product demonstration D) presentation

Q: When you are starting out and cannot afford to pay sales representatives full-time salaries, you can offer ________ instead. A) incentives B) bonuses C) commissions D) bonuses and incentives

Q: If you decide to pay yourself a commission from your business, you will be earning ________. A) a percentage of your business profit B) a percentage of each sale C) a set salary D) a bonus

Q: Why have so many successful entrepreneurs started out in sales?

Q: The essence of selling is teaching.

Q: Entrepreneurs sell constantly to ________. A) potential employees B) potential investors C) customers D) All of the above.

Q: When you sell, you should always listen carefully to customer complaints, because ________. A) it's better to have customers complain to you than to other people B) customers are happier when you listen to them C) they provide invaluable information about how to improve the product or service D) the "buck" stops here

Q: Entrepreneurs ________ constantly, not just to customers, but to investors, bankers and people they want to hire. A) sell B) try to make a good impression C) attempt to be optimistic D) All of the above.

Q: The Small Business Administration advises sales people to put the customer first, stay close to the customer, and pay attention to details.

Q: As your database grows, you can make it more sophisticated by organizing it by region or ________. A) customer interest B) age C) gender D) ethnic group

Q: Information such as customers' e-mail addresses and purchasing history can be stored in a simple computer ________. A) Web site B) program C) database D) software

Q: When is an entrepreneur done collecting market research for his/her business? A) when the business has been opened B) when the business has been operating for six months C) never D) when the minimum sales have been reached

Q: Define customer service and give examples of offering good customer service.

Q: A successful business is built upon repeat customers.

Q: An angry customer can make you angry too. However, it is crucial that ________. A) you ensure you continue to sell your product or service B) you stay calm, ask the customer to explain the situation, and do not interrupt the customer as she speaks C) you make your points to the customer D) once the sale is made, you do not go back to this person

Q: Losing a customer can hurt by ________. A) loss of jobs B) losing your reputation and future business C) losing the current dollars D) All of the above.

Q: Customer service is everything you do to keep customers happy, especially ________. A) after they've bought something B) during the buying process C) before they've bought something D) as they are paying for the product

Q: Which of the following is not a cost of losing a customer? A) loss of past dollars B) loss of jobs C) loss of reputation D) loss of future business

Q: Telling the truth about any negative aspect of a product or service usually ________. A) means that you are dishonest B) annoys your customer C) gains your customer's trust D) makes a customer think you are up to something

Q: Customer complaints should be ________. A) carefully listened to, but not responded to (don't let the customer know you take the complaints seriously) B) acknowledged and responded to politely C) politely ignored D) put in priority order

Q: Joe Girard's Law of ________ states that just a few unhappy customers can keep a great many other customers away from your business. A) 250 B) Sales C) 200 D) Sales Averages

Q: Everything that a business does to keep its customers happy is called ________. A) customer service B) customer appreciation C) post-sale service D) customer satisfaction

Q: Which of the following is not an example of customer service? A) Suggest a less expensive product that will meet the customer's need. B) Deliver the product on time. C) Keep a customer on hold indefinitely. D) Help customers carry their purchases to their vehicles.

Q: Brian Tracy believes all objections fall into one of six categories. Which of the following is not one of the six? A) follow-up service and competition B) support, warranties and assurances C) price and performance D) None of the above.

Q: Using technology to sell ________. A) is not really necessary B) works for products but not services C) can be useful in helping you communicate your product to the customer and to stay in touch with the customer D) is too expensive for the average salesperson

Q: To break even, a business must ________. A) sell enough units to cover all its costs B) sell enough units to cover its fixed costs C) sell enough units to earn a profit D) sell enough units to cover variable costs

Q: Discuss the concept of fixed costs. How are they different from variable costs?

Q: Marketing should not be budgeted as a percentage of sales but rather as money that is needed to drive sales. Therefore it is part of the business's ________. A) variable costs B) sales forecast C) fixed costs D) intermediate costs

Q: Good marketers know that a(n) ________ is the heart of the marketing plan. A) researching suppliers B) sales forecast C) analysis of the market D) price/profit schedule