Before you start: Start Your Business on a Budget pretest

About 10 minutes. Not graded. 12 questions, plus 3 quick confidence questions.

This is not a test you pass or fail. It is fine not to know these answers. Many people will not, because you have not taken the course yet. Your answers show your starting point, so at the end you can see how far you came.

Why we ask: it shows what you already know and which ideas are new to you. When you finish the course, you will see your before and after for each skill, so you can see where you grew and what to review.

How sure do you feel?

Rate each line from 1 (not at all sure) to 5 (very sure). There is no right answer.

I can describe a business problem and test it by talking with possible customers.

1 2 3 4 5

1 = Not at all sure5 = Very sure

I can work out my break even point and find official setup steps.

1 2 3 4 5

1 = Not at all sure5 = Very sure

I can write a one page plan with a 30 day goal I can measure.

1 2 3 4 5

1 = Not at all sure5 = Very sure

Questions

1. You want to start a pet sitting service. Which statement gives you the best place to start testing?

A. Pet owners everywhere would like their pets to be happy. B. I have loved animals ever since I was a small child growing up on a farm. C. Nurses on night shifts worry about dogs left alone for 12 hours.

2. A senior needs rides to medical visits. Her adult son usually pays for help. Who must you talk to first?

A. The son, since he is the one who pays. B. Only the senior, since she has the need. C. Other ride services, to see their prices.

3. You are testing a gutter cleaning idea. Which question will give you the most reliable answer?

A. When did you last have your gutters cleaned, and by whom? B. Would you hire me to clean your gutters later this fall or next spring? C. Do you think a gutter cleaning service is a good idea?

4. You talked with a neighbor about your tutoring idea. Which reply shows the most demand?

A. She said she might try it sometime next year. B. She gave you two names of friends to call. C. She said the idea sounds really cool to her.

5. After 10 talks, 8 people said on time service matters more than price. What should you do?

A. Change the offer to stress on time service. B. Lower the price to beat every competitor nearby. C. Ignore it, since 10 talks is not enough.

6. A tutor charges $40 a session. Each session costs her $10 in travel and materials. Her monthly costs (phone, ads, insurance) total $300. What is her break even number of sessions?

A. 30 B. 10 C. 8

7. A baker pays $25 a month for a market booth. What kind of cost is it?

A. Profit, since it is paid out of sales. B. Cost per sale, since it rises with each new sale. C. Fixed, since it stays the same each month.

8. A new owner sets a price just $2 above cost per sale to win customers. What is the biggest risk?

A. The IRS may reject the low price. B. Customers may think it costs too much. C. Sales may never cover fixed costs.

9. Where should you go to get an EIN?

A. IRS.gov, where it is free. B. A filing site that charges. C. Your bank, for a small fee.

10. Someone wants to test a small idea cheaply before spending on filings. Per the SBA, which structure fits the test?

A. Corporation, since it is the fastest and costs nothing at all. B. Sole proprietorship, though personal assets are at risk. C. LLC, since it forms automatically with no filing.

11. A new lawn care owner is setting a goal for next month. Which one can she measure?

A. Get the word out and become more popular around town this year. B. Make the business a success as quickly as possible. C. Book 3 paid jobs and log results each Friday by Dec 1.

12. A new owner wants reviews fast. Which plan follows FTC rules?

A. Have cousins post reviews as customers to get things started. B. Request honest reviews from all buyers. C. Pay for 5 star reviews to start out strong.

Save my starting point

Next up

Go to Lesson 1: Is it a business?.

This self check is not graded.