Week 10 Reading Reflection

Financial Preparation for Entrepreneurial Ventures

1. I was surprised that the operating budget was projected just by advertising. Typically, price has a lot to do with projected sales revenue, much more so than advertising.
2. I honestly wasn't confused by anything. I am taking 4000 level accounting classes and definitely know all the basics that this chapter tried to teach.
3. Question 1: Regarding capital budgeting and payback period, with a venture that may be considered risky, what is a recommended payback period?  Question 2: When starting the business, would you recommend a low fixed cost structure or high fixed cost structure? Obviously, this would depend on your projected sales, but even if for your projected sales a high fixed cost would be most profitable, would you recommend a low fixed cost to hedge risk?
4. The "Watching Your Accounts Receivables" article advises to develop a process and be consistent when dealing with customers. I agree that you shouldn't let payments slide and due dates be continually pushed back, but I think that you should treat your most loyal/biggest customers specially and offer them discounts or extended payment due dates.