30 Questions
Which of the following is NOT mentioned as a business expense in the text?
Groceries for the kids
How many different accounts does the author suggest having for your business and personal life?
5
What is the main purpose of having budget guidelines for your sweet business?
To track and manage business expenses
Which expenses are considered direct expenses in your suite?
Professional supplies and retail cost of goods sold
What percentage of your total income should be set aside for tax savings?
20%
What are indirect expenses in your toolkit?
Advertising and social media costs
What is the recommended percentage of your total income for indirect expenses?
15%
Which account should you use to deposit all of your credit card transactions, checks, and cash?
Business bank account
What is the purpose of having a separate checking account for personal expenses?
To pay business expenses
Why is it recommended to have a tax reserve account?
To earn interest on your savings
Which type of bank account is NOT mentioned in the text?
Emergency savings account
What is the purpose of setting up a retirement account?
To invest money for future growth
What is one of the action steps mentioned at the end of the module?
All of the above
What can you do with the budget guideline worksheet?
Play around with rent amounts
Why is it important to track your expenses?
To measure the success of your salon suite
True or false: Setting up separate accounts for business and personal expenses is important for managing your sweet business effectively?
True
True or false: The text suggests having five different accounts for your business and personal life?
True
True or false: Budget guidelines can help put your sweet business on track for success?
True
True or false: All of your credit card transactions should be deposited into a separate checking account?
True
True or false: Cash should be considered as an expense and should be deposited into a bank account?
True
True or false: It is recommended to have a separate checking account for personal expenses?
True
True or false: A tax reserve account should be an interest-bearing account?
True
True or false: The budget guideline worksheet allows you to see how changing rent amounts affect your expenses.
True
True or false: The budget tracker helps in creating custom guidelines for your sweet business.
True
True or false: Opening multiple bank accounts is not necessary for managing your salon suite finances.
False
True or false: Tracking expenses for one month is one of the action steps mentioned at the end of the module.
True
True or false: Direct expenses are expenses in your suite that are directly related to the income that comes in.
True
True or false: The service provider draw is around 40 to 45% of your total income that came in that week.
True
True or false: Professional supplies expense should be around 7% of your total income.
True
True or false: Retail cost of goods sold is the money spent to restock your shelves after selling retail to guests.
True
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.
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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