SS Mod 5 Suite Budgeting Practices
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Questions and Answers

Which of the following is NOT mentioned as a business expense in the text?

  • Paying rent for the salon suite
  • Purchasing color
  • Paying mortgage
  • Groceries for the kids (correct)
  • How many different accounts does the author suggest having for your business and personal life?

  • 2
  • 5 (correct)
  • 3
  • 4
  • What is the main purpose of having budget guidelines for your sweet business?

  • To pay for personal expenses
  • To bring in more money
  • To track and manage business expenses (correct)
  • To save money for tax time
  • Which expenses are considered direct expenses in your suite?

    <p>Professional supplies and retail cost of goods sold</p> Signup and view all the answers

    What percentage of your total income should be set aside for tax savings?

    <p>20%</p> Signup and view all the answers

    What are indirect expenses in your toolkit?

    <p>Advertising and social media costs</p> Signup and view all the answers

    What is the recommended percentage of your total income for indirect expenses?

    <p>15%</p> Signup and view all the answers

    Which account should you use to deposit all of your credit card transactions, checks, and cash?

    <p>Business bank account</p> Signup and view all the answers

    What is the purpose of having a separate checking account for personal expenses?

    <p>To pay business expenses</p> Signup and view all the answers

    Why is it recommended to have a tax reserve account?

    <p>To earn interest on your savings</p> Signup and view all the answers

    Which type of bank account is NOT mentioned in the text?

    <p>Emergency savings account</p> Signup and view all the answers

    What is the purpose of setting up a retirement account?

    <p>To invest money for future growth</p> Signup and view all the answers

    What is one of the action steps mentioned at the end of the module?

    <p>All of the above</p> Signup and view all the answers

    What can you do with the budget guideline worksheet?

    <p>Play around with rent amounts</p> Signup and view all the answers

    Why is it important to track your expenses?

    <p>To measure the success of your salon suite</p> Signup and view all the answers

    True or false: Setting up separate accounts for business and personal expenses is important for managing your sweet business effectively?

    <p>True</p> Signup and view all the answers

    True or false: The text suggests having five different accounts for your business and personal life?

    <p>True</p> Signup and view all the answers

    True or false: Budget guidelines can help put your sweet business on track for success?

    <p>True</p> Signup and view all the answers

    True or false: All of your credit card transactions should be deposited into a separate checking account?

    <p>True</p> Signup and view all the answers

    True or false: Cash should be considered as an expense and should be deposited into a bank account?

    <p>True</p> Signup and view all the answers

    True or false: It is recommended to have a separate checking account for personal expenses?

    <p>True</p> Signup and view all the answers

    True or false: A tax reserve account should be an interest-bearing account?

    <p>True</p> Signup and view all the answers

    True or false: The budget guideline worksheet allows you to see how changing rent amounts affect your expenses.

    <p>True</p> Signup and view all the answers

    True or false: The budget tracker helps in creating custom guidelines for your sweet business.

    <p>True</p> Signup and view all the answers

    True or false: Opening multiple bank accounts is not necessary for managing your salon suite finances.

    <p>False</p> Signup and view all the answers

    True or false: Tracking expenses for one month is one of the action steps mentioned at the end of the module.

    <p>True</p> Signup and view all the answers

    True or false: Direct expenses are expenses in your suite that are directly related to the income that comes in.

    <p>True</p> Signup and view all the answers

    True or false: The service provider draw is around 40 to 45% of your total income that came in that week.

    <p>True</p> Signup and view all the answers

    True or false: Professional supplies expense should be around 7% of your total income.

    <p>True</p> Signup and view all the answers

    True or false: Retail cost of goods sold is the money spent to restock your shelves after selling retail to guests.

    <p>True</p> Signup and view all the answers

    Study Notes

    Managing Business Expenses for a Sweet Business

    • The speaker emphasizes the importance of looking at guidelines and measurements for business expenses in order to have a sustainable and profitable sweet business.
    • It is suggested to have five different accounts for business and personal expenses: a business checking account, a personal checking account, a savings account, a tax reserve account, and a retirement account.
    • The business checking account is where all credit card transactions, checks, and cash should be deposited to track income accurately.
    • A separate personal checking account is recommended for personal expenses, and it is from this account that the business owner should pay themselves.
    • A savings account is suggested for saving money for vacations or major purchases.
    • A tax reserve account is needed to set aside money for taxes, and it should be an interest-bearing account to grow the funds.
    • A retirement account should be set up to invest money for long-term growth, and a financial advisor can be consulted for assistance.
    • Direct expenses in the business, such as professional supplies and retail cost of goods sold, should be tracked and measured against total income.
    • The service provider draw, which is the amount paid to oneself, should be around 40-45% of total income.
    • 20% of income should be transferred to the tax reserve account to ensure sufficient funds for tax payments.
    • Professional supplies should be around 7% of total income, and retail cost of goods sold should be approximately 10% or half of retail sales.
    • Indirect expenses, including advertising, rent, insurance, and education, should be around 15% of total income. A budget guideline worksheet is provided to help track and plan expenses.

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    Description

    Test your knowledge on tracking and paying direct expenses in this quiz. Learn about the relationship between income and expenses, specifically focusing on paying yourself as a direct expense.

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