xiii
Copyright Goodheart-Willcox Co., Inc.
Content is presented in an easy-to-
comprehend and relevant format. Practical
activities relate everyday learning to enable you
to experience real-life communication situations
and challenges.
• Each chapter opens with a pretest and
concludes with a posttest. The pretest will
help you evaluate your prior knowledge of
the chapter content. The posttest will help
you evaluate what you have learned after
studying the chapter.
• The Essential Question at the beginning of
each section will engage you as you uncover
the important points presented in the
content.
• A You Do the Math activity in each chapter
focuses on skills that are important to your
understanding of math for business. You are
given an opportunity to apply math concepts
in that context of business applications.
• Research skills are critical for college
and career. Internet Research activities
at the end of each chapter provide
opportunities to put them to work.
• Event Prep presents information to
use when preparing for competitive
activities in career and technical student
organization (CTSO) competitions.
• A Math Skills Handbook provides you
with a quick reference for basic math
functions. This helpful information
will help clarify business math that is
presented in the chapters.
4
Dragon
Images/Shutterstock.com
Check Your Business IQ
Befor
e you begin the chapter, see what you already
know
about business
by taking
the chapter pretest.
The pretest is available
at
www.g-wlearning.com.
ng .com
.
E
Q
ssential
uestion
Why is planning
important for
any
business venture?
Objectives
After
completing
this
section,
you
will
be able
to:
•
Discuss
the
process
of
developing
an
idea
for a business.
•
Describe
the components
of
a business
plan.
•
Explain
the
types
of
financing
available
for
new
businesses.
Key
market
research
market
cash
flow
franchise
franchisee
franchisor
business
plan
mi i
start-up
capital
pro
forma
fin statAlgebraiclReasoningncinginalanrfiaatelleebtodcaincia
ements
pro
forma
balancce
sheett
pro
forma
e
t
form
cas
fl
capital
structurec
assetsts
equity
financing
venture
capital
Section
6.2
Business Planning
Ke y TeTermsResponsibility
rms
m
a rk et
r esea
r ch
m
a rk et
c
as h fl
ow
fr
a n chi
se
fr
a n chi
se e
st a r
t- up c
a pi ta
l
pr o
f o rm
a fi n a
nc a l
st
at e m
e n ts n n
pr o
f o rm
a ba l a
nc e s h
ee
c
a pi ta
l st ru
t ur e
d
bt fi
n a nc
g
c
o ll te
r a l
asse
nc in g
se e
e s h
ee t
asse
nc
Ethics and Social
55
specific permission. It is unethical for employees
to share proprietary information with outsiders. In
some cases, the employee may be breaking the law.
Honesty
Those who create communication
documents for an organization must carefully
consider the impact that
In algebra, letters stand in place of unknown
numbers. These letters are called
variables.forprostatemaeninchomow
When
a variable appears with numbers and signs
adding, subtracting, multiplying, or dividing, the
expression is called a
variable expression.
For
example,
x +
5 is a variable expression.
Solve the following problems.
1. Macy budgets $25 a week for office
refreshments. Sometimes, the amount she
spends each week is less than $25. Write a
variable expression to calculate the amount of
money left over after a given week.
2. Trey sells advertising space in the local
newspaper. The price for an ad is based on
how many inches of vertical space it fills.
The rate is $2.37 per inch. Write a variable
expression to calculate the price of ad space.
3. Mariana orders $350 worth office equipment
from a single supplier each month. Payment
for the order is made in a single payment
or is sometimes divided into equal smaller
payments. Write a variable expression to
calculate equal payment
amounts for
the office equipment order.
You Do the Math
in exaggerations or inaccurate statements about
the company’s products or services. The point of
view presented in any business communication
should be unbiased and honest.
Marketing messages that persuade the
reader to buy something or respond in some
way must be written a d
p
a
list of
listening
strategies
that c
mightinclude
monitoring the
message
for
what
is
being said
or fo
Internet
Research
Customer
Service.
Customer
service is
an
important asset for
a
business.
Using the
Internet,
search fo
customer service
trainingo manual.
Review several
examples
of
customer
service
training
manuals
available on
nline..
Takes
notes on
the
importantinformatoon i
you
find
that can
help
a
business
have
superiior
customer
service
representativ
ves.
What d
you
think are
the
top five
customer su
upport
actions
that
are
important to a
business??e
TeamworkessnFiunahip
t mer is always Hows
many
times
have
youlheard
this
phrase?re
Discuss the
What
extactly,
does
this mo
ean?
Gieve
of
when
sea
m a
nu a l s
av a i l a
b l e o
li n e
T a k es
n t
b u s i n
e ss h
a ve s u
p e r o
r cu
sto m e
r s e r v
ic e r e
p r ese
n t at i
es .
Wh at d
o yo
sto m
t t i
t h
at
im
r ta n
t to a b u s i
cu sto m
e r s
pp o r
t a c t i
o n s t h
at a r
e im p
o r ta n
t to
a b u s i n
ss ?
Chapter 17
Finanr
CTSOs
Busin
ncial
Plan.
Creating a
business
financial
planis a
competitive
entrepre e
rs
event that
may be
offered
by your
Career and
Technical
Student
Or ga ni
zat
ionright.“
(C T
SO).
Thi m
ay be a
n
indi v idu a
o r
tea m
eve n t.
Th e
m
ay be two
parts to
this event:
the
written
pl a n a
nd h
e o r a l
pr ese
n tat i
n o f t h
plexamples
a
n .
The event
calls
for the
development
of a
written
business
plan
that
will
likely be
judged
prior
to
the
competition.
Written
events can
be
lengthy and
take a
lot of
time to
prepare.
Therefore,,
it
isimportant to
start
early.
The
rules for
this
event are
siimillar
to
other
business
plan
presentations.
However,
writing
this
plan
reqMathes
quir
research
on th
of
financing a
business
and the
institutions and
individuals
that
provide such
ncing.
To
prepare for
wriiting a
financiiaand,ochganieachohhoullowwprsesetmiiiteites..
l
plan
omplle
ete t e
f
ing
ac iv t
1.
Read
the
guidelines
provided
by
your r
zatti
n.The
ill
be sp
cific
directions
given
as to the
parts
of the
business
plan
and
ow
s
nted.
Allfinal
format
guidelines will
also be
given,
includin
ho
ow to
organize nd
ub
h
busine
plan.
Be
sure to ask
any
questions about
points that
you do
notund
.
2.
Read
the re
esear
topic
assigned
by
your
CTSO..
Do
your
research
early.
Research
may
takePercentage
days or
weeks,
and you
doorganizesanciialhpltans.
not
want to
rus
process.
3.
Study this
chapter to
learn
about
fin
4.
Visit
the
websitte of
your
CTSO
and
create a
checkliist
of
the
guidelinesRentu
yo
must
follow.. Ask
yourself: Do
oes
this
event
still
me? Can I
do
what is
necessary to be
successful
at the
event?
If
youhorizontalurself
answered
“yes,” mo
ove
rward
wi
the
writing
process.
6 Set a
dead
dline for
yo
so
thatak
you
write at a
comfortable
pace.
f
a
teacher to
review
it
and
give you
feedback.
prepared
N N EVENT
E E E E E
V V E
N N N N N N N N T T
PREP
P P P P P P R
E P P P P P P
EVENT
PREP
T N N N N N N N N N N N N N N N N N N N N
E
V V V V V
N N N N N N T T T T
V
N N N N
E E E E E E E E
V V V V V V V V V V V V E E E E E E E E E
N N N N N N N N N N N N T T T T T T T T T T T T EVENT
E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E
V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V E E E E E E E E E E E E E E E E E E E E E E E E E E E E
N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T
E E
V V E E
N N T T
V V V V V V V
T N
E E
V V E E
N N
P
P
P P P P P P P P P P R R R R R R R R R R
E E E E E P P P P P P P P P P P P P P P
P P P P P R R R R R R R
P P P P PREP
P P P P P P P P P P P R R R R R R R R R R R
E E E E E E P P P P P P P P P P P P PREP
P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R
E E E E E E E E E E E E E E E E E E E E E E E E E P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P
P P R R
E E P P PRE P PREP
P P P P P P P P P P P P P R R R R R R R R R R R R R R
E E E E E E E E E E E P P P P P P P P P
P P R R
E E P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P
P P R R
E E P
Amplify Your Learning
i t i s im
p
u l
e s f o r
t hi s
ev e n t
a r e s
mi a r
to ot
h e r b
r e
ui r es
r ese
ar ch o
n t h e
m e a n
s o f
fi n a nc
in g a
b u s i n
e ss a n
d t h e
in st i
t u t i o
a l s t h
at pr
ov id
e s u ch
fi n a
nc in g.
r e p a r
e f o r
w r t in
g a fi
n a nc
a l pl a
n , c o
mp
te t h e
f o ll ow
in g a
c t i v i t
i es
d
t h e g
u id e
l in es
pr ov
id e d
by yo
ur o r
ga ni za
i o n .
Th e r
e w ill
be s p e
ci fi c
di r e c t
i o n s
g i ve n
o
t h e p
a r t s o
f t h e b
u s i n
e ss pl
a n a n
d h o
w ea ch
s h o u
ld be
pr
ese n t e d
. Al l
fi n a l f
o rm
at
d e
l in
es w ill a
l so be
g i ve
n ,
including g h
w to o
r ga ni
ze a n d
s u b
m t t h
e b u s
i n ss
pl a n .
B e
e to as k a
n y qu n n
es t i o
n s ab
o u t p
o in
ts t h at
yo u d o
n o t
un e r
s ta nd
.
a d t
h e r
se
arch ch to pi
c as s i
g n e d
by yo
ur C T
SO D
o yo
ur r es
e ar ch
ea rl
y. R
esea r ch
m a
y ta k e
ys o
r we e
k s, a n
d yo u
d o n
o t wa
n t to
ru s h
t h e pr
o c es
s.
ud y
t hi s
ch a p te
r to l
e a
rhorizontal
n
ab o u t
fi n a
nc a l
pl a n s.
s i t t
h e
we bs i e
o f yo
ur C T
SO a
n d cr
ea te a
ch e c
kl s t o
f t h e
g u id e
l in es
yo u
mu st f
o ll ow
A s k
o ur se
lf : D
es t
hi s ev
ebottom.interestfoinformationth
n t st
ill in te
r e st m
e
? Ca n I d
o w h
at i s n
e c
essa
ul
at t h e
v
e n t?
If yo u
a n sw
e r e d
“y es
,” m
ve f o r
t a d
e li
w h
at i s n
e c
essa
b s
sf f ul
at
m o
ve f o r
w d
et a d
e d li
Skills
Handbookfineameans
Data Analysis
Statisticsoldrebe
Graphs are used to illustrate data in a picture-aderstandcircleegraph.ess
like format. It is often easier to understand data when
shown in a graphical form instead of a numerical
form in a table. Common types of graphs are bar
graphs, line graphs, and circle graphs.he
A
bar graph
information along a
vertical axis and axis. The vertical axis
runs up and down one side and the horizontal axis
runs along the
A
line graph
also organizes on vertical
and axes. However, data are graphed as a
continuous line rather than set of bars. Line graphs
are often used to show trends over a period of time.
A
circle graph
looks like a divided circle and
shows how a whole object is cut up into parts.
Circle graphs are also called
pie charts
and are
often used to illustrate percentages.
Example A business shows the following balances
in its cash account for the months of March
through July. These data are illustrated
below in the line graph.
Month Account
Balance
Month
Example A business lists the percentage of its
expenses in the following categories.
These data are displayed in the following
Expenses
Cost of goods 25
Salaries 25
21
Utilities 17
Advertising 12
Monthly Expenses
Salaries
25%
Cost of goods
25%
Rent
21%
Advertising
12%
Utilities
17%