Lesson 1
1. Lesson 1
1.5. Explore 4
Module 2: Number
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When beginning a business, typically you will need to purchase some equipment or services. This start-up cost will often include some large, expensive items. For example, a gasfitter would need to purchase a truck, a pipe cutting and threading machine, and a large number of other tools, such as a pipe bender, drills, wrenches, screwdrivers, levels, a measuring tape, and saws. To purchase all of these things could be expensive. Expenses associated with the business after the start-up costs are called operating expenses.
It is also important to decide whether a new business is feasible. This means deciding whether a business is likely to be profitable. To determine if a business is feasible you should begin by asking questions such as the following:
- Will people purchase my service or products?
- Can I sell my services or products for more than it costs me to provide them?
- How much competition is there in the community in which I plan to set up the business?
Read “Explore the Math” on pages 276 and 277 of your textbook. Pay attention to the definitions of the terms in the left margin.
Self-Check 3
Complete “Build Your Skills” questions 2, 4, 7, and 8 on pages 282 to 284 in your textbook. Answer
Add the following terms to your copy of Glossary Terms:
- sales revenue
- break even
- loss
- profit
- variable expenses
- fixed expenses
- start-up cost
- operating expenses
- feasible