Question 1: You sell homemade juice. Your total monthly sales are KES 50,000. Your raw ingredients, packaging, and M-Pesa charges total KES 20,000. Your business profit is:

• A. KES 50,000. I count all the money that came in.
• B. KES 30,000. Sales minus direct costs (COGS) equals profit.
• C. I don't know yet—I haven't paid my own salary or the rent for the stall.

Question 2: You need KES 100,000 to buy new equipment. Your best friend offers you the money, interest-free, but asks for a percentage of your future profits. You should:

• A. Take the money immediately. Zero interest is a great deal.
• B. Draft a simple agreement to be signed by both of you, defining the percentage and the payment terms.
• C. Wait. First, check if your local SACCO or bank offers a small business loan to avoid giving up equity.

Question 3: A major client pays you KES 40,000 for a project delivered 60 days ago. Where does this money go first?

• A. Into my personal M-Pesa to pay the electricity bill at home. The business will need it later.
• B. Into a separate business bank account to clear any overdue supplier debts.
• C. I immediately invest it back into stock so I can make more sales faster.

Question 4: You check your financial records and realise your business spent KES 10,000 on "miscellaneous" items last month. Your reaction is to:

• A. Note it and move on. Small costs add up, but it's not a major issue yet.
• B. Implement a strict rule that every expense, no matter how small, must have a corresponding receipt or entry in a ledger.
• C. Go through your purchase history for the last 3 months to see if this trend is repeating.

Question 5: You want to increase your profit margin. Which is the most effective first step?

• A. Immediately increase the selling price of all your products by 10%.
• B. Calculate your Cost of Goods Sold (COGS) and look for cheaper, bulk suppliers for your ingredients or materials.
• C. Spend more money on marketing to attract high-paying customers.

Question 6: It's the end of the year. Your primary concern regarding KRA (tax) compliance is:

• A. I don't need to file anything unless I'm employed elsewhere.
• B. Ensuring all my business expenses are documented with ETR receipts (if applicable) and my annual returns are filed accurately by the deadline.
• C. I'll estimate my profit and pay a small amount of tax just to stay compliant.

Question 7: You currently have a high-interest loan (like a mobile app loan) and a low-interest bank loan. You receive an unexpected large payment. You use it to:

• A. Pay off the high-interest loan completely or significantly reduce its principal, saving money on interest.
• B. Put the money aside in a savings account to act as a buffer for the next 3 months.
• C. Use the money to buy a new, unnecessary gadget for your office to 'reward' yourself.

Question 8: Your competitor lowers their price. You know their product quality is slightly lower than yours. Your next move is:

• A. Immediately match the competitor's price to avoid losing customers, even if it cuts your profit margin.
• B. Hold your price, but immediately add a high-value service or product bundle (e.g., free delivery, extended warranty) that justifies the higher cost.
• C. Ignore them completely; my product is better and customers will eventually return.

Question 9: What is the minimum amount of cash reserves (Working Capital) your business should ideally have access to?

• A. Enough to cover all expenses for the next 1 month.
• B. Enough to cover all operating expenses(rent, salaries, utilities) for at least 3 to 6 months.
• C. Zero, cash should always be immediately reinvested into stock or marketing.

Question 10: Your business has KES 50,000 in surplus cash. Your best investment priority is:

• A. Buying a new, slightly better phone for personal use, paid for by the business.
• B. Saving it for retirement, as a personal long-term investment.
• C. Investing in efficiency-boosting assets (like a high-speed printer/blender) or professional training to improve productivity.