Business Startup Costs Quiz

Which of the following is an example of an initial startup expense?

• Office rent

• Salaries for employees

• Buying equipment and furniture

• Monthly internet bill

A business’s burn rate refers to:

• The time it takes to start making a profit

• The rate at which a business spends its cash reserves

• The total amount of revenue a business generates

• The percentage of profit reinvested into the business

If a company has $60,000 in savings and a burn rate of $10,000 per month, how long is its runway?

• 3 months

• 6 months

• 9 months

• 12 months

Which of the following is NOT considered a monthly operating expense?

• Rent for a retail space

• Advertising on social media

• Purchasing a one-time business license

• Paying employee wages

A business has fixed and variable expenses. Which of the following is a variable expense?

• Loan repayment

• Monthly lease payments

• Employee salaries

• Raw materials for production

Why is it important for a startup to track its burn rate?

• To ensure they are making enough sales

• To know how quickly they are spending their funds before needing additional investment

• To attract more customers

• To compare their revenue with competitors

If a startup wants to extend its runway, it should:

• Spend more on advertising

• Reduce operating expenses or increase revenue

• Take on more debt

• Hire more employees

What is the main purpose of calculating initial startup expenses?

• To determine how much money is needed before the business starts making revenue

• To calculate the price of each product

• To decide how many employees are needed

• To figure out the best location for the business

A business owner spends $5,000 per month to operate and has $25,000 in the bank. If they don’t increase revenue or raise more money, when will they run out of cash?

• 3 months

• 5 months

• 6 months

• 12 months

Which of the following is a one-time initial expense rather than an ongoing cost?

• Business registration fees

• Office utility bills

• Monthly marketing budget

• Employee wages