Get Certified for Free Browse courses

Starting a Small Business · Level 3 of 5 · Intermediate

Money and pricing

Startup costs, pricing for profit, cash flow, and bookkeeping.

Study notes

  1. List startup costs (equipment, licenses, deposits, initial inventory) separately from monthly operating costs.
  2. Gross margin is price minus the direct cost of the product, divided by price.
  3. Break-even point in units is fixed costs divided by (price minus variable cost per unit).
  4. Profit is not cash. Late-paying customers or big inventory purchases can leave a profitable business short of cash.
  5. Use bookkeeping software or a simple ledger from day one, and set aside money for income and self-employment taxes.

Quiz: 6 questions

Choose one answer for each question, then check your answers. Score 5 of 6 to pass. Then enter your name and email to download a PDF certificate and have a copy emailed to you. Answers are graded in your browser.

1. A product sells for $40 and costs $24 to make. Gross margin is:

2. Fixed costs are $3,000 a month. Each unit sells for $50 with $20 variable cost. Break-even units per month:

3. A business is profitable on paper but cannot pay rent. The likely issue is:

4. Which is a startup cost, not a monthly cost?

5. Self-employed people in the U.S. usually need to plan for:

6. Bookkeeping should start:

About this certificate: Certificates are issued by Get Certified for Free for passing a free online knowledge quiz. They are not accredited, licensed, government, academic, or professional credentials and do not confer a license. Read the full terms.