Lesson 3: Planning and Building a Business- EverFi

8.) Regina is looking to start a knitting business and completes a target market profile to include in her business plan. Identify which item in her target market profile is in the wrong category and where it should be moved.

"Don't spend $$money$$ on unnecessary items"

4.) What are the four parts of a SWOT analysis?

Ans. 3

Break Even

Fixed costs / contribution per unit

Full Capacity

How many units can you physically sell in a month

2.)Sharon is thinking about opening a bakery. She knows she wants to set her own hours, reduce her stress and make a profit. But she still has a lot to think through. Which of the following would NOT be a good early step?

Immediately finding a storefront properly for her business, putting down a deposit and signing a lease

15.) Which of the following is NOT one of the four steps to preparing a sales forecast?

Select an organizational structure for your company

Wholesaler

Sells a products in large volumes to the retailer.

Retailer

Sells directly to the customers.

Which of the following is NOT an important step in the marketing cycle?

Show customers your marketing plan so they know you though out these steps

Buying Patterns

What customers are WILLING to spend $$$$Money on and how much they are WILLING to spend

Geographics

Where customers live and where businesses are located, including region, city, and neighborhood

Direct Competitor

A business in the market that sells a product or service similar to yours.

Secondary Data

Information that was previously gathered for a purpose other than the study @ hand.

Indirect Competitor

Is a business that sells a different product or service

Line Organization

Is the simplest organizational structure, which contains a direct chain of command through levels of personnel.

Primary Data

New Info gathered during the Market Research phase that come directly fro potential groups of customers or competitors in the market.

Demographics

Objective social and economic facts bat ppl such as age, gender, and family size

Which of the following should you NOT do when collecting and evaluating data on your market?

Only look for data that supports your initial idea

Consumer Profile

An overview analysis of a group of potential customers that businesses use to improve how they market their goods and services.

Interviews or Surveys

Asking potential customers their thoughts regarding your business and/or the current businesses they visit.

Focus Groups

Bringing a small group of ppl 2gether to help solve a problem or a set of questions

Cost of Goods Sold ( COGS )

Calculating every single cost that goes into making a unit. How to Calculate this: Materials- Cost of ingredients and / or parts that go into one unit. Labor- The $$$ Money u pay employees for their time making the unit. Packaging- The cost to pack the unit and get it to the customer.

12.) Pete wants to write a business plan for Pete's PB&J Cupcake Cart. He needs to identify all expenses associated with making a peanut butter and jelly cupcake for a Economics of One Unit. What is the most accurate way of determining his expenses?

Go thru the detailed process of making the cupcake step by step, measuring the ingredients he uses and calculating the cost per ingredient

Sharon is thinking about opening a bakery. She knows she wants to set her own hours, reduce her stress and make a profit. But she still has a lot to think through. Which of the following would NOT be a good early step?

Immediately finding a storefront property for her business, putting down a deposit

Which of the following is NOT a way that an entrepreneur could increase the contribution margin or profit of each unit sold?

Increasing the selling price and Decreasing the Variable Expenses per unit will BOTH Increase Profit.

Which of the following is NOT a creative thinking exercise entrepreneurs use to generate ideas?

Judge Each Idea as Realistic or Not

Last Quiz: 1.) Which of the following is NOT a creative thinking exercise entrepreneurs use to generate ideas?

Judge each idea as realistic or Not

7.)Which of these is NOT part of a consumer profile?

Polygraphics

A Market

Potential group of customers- ppl or businesses- who are ABLE and WILLING to purchase a particular product or service

Sales Forecast

Prediction of amt. of future sales ur company expects to achieve over a certain period of time.

Service

Provider offers services to customers.

Psychographics

Psychological characteristics of consumers such as

Benefits:

Reasons customers choose to buy a product.

Competition

Rival businesses competing for the dollars your target market spends.

Target Market Segment

Specific group of customers in the broader target market who are most likely to buy a product or service.

George and Miguel are considering opening up a shoe store but first need to do market research. Which one of these is NOT part of the market research process?

Start promoting their shoe store to ppl in the neighborhood

5.)George and Miguel are considering opening up a shoe store but first need to do market research. Which one of these is NOT part of the market research process?

Start promoting their shoe to ppl in the neighborhood.

What are the four parts of a SWOT Analysis?

Strengths, Weaknesses, Opportunities, Threats

Organizational Structures

Systems for dividing work, authority and responsibility. There are different approaches to structures based on what is best for the business.

Which of the following ensures a good idea for a business is an actual business opportunity?

The idea solves a unique or want in the market that group of customers is WILLING to buy.

Observations

Visting competitors in the area and observations how they interact w customers

Competitive Advantage

A benefit of your product that differentiated your business from the competition.

Break Even Point

when a business's expenses and sales equal zero because the business has sold exactly enough units to cover its fixed expenses.

11.) Which of the following is a start-up expense for Maria's food truck?

{ All of the above } A.) Kitchen appliances and other equipment need to conduct her business B.) Cell Phone Bill C.) Gas D.) All of the above

10. ) Which of the following is a fixed expense for Maria's sandwich food truck?

{ All of the above } A.) Salaries for her employees B.) Truck Insurance C.) Advertising D.) All the Above

13.) Pete's disappointed with the projections of how much his cupcake cart will make in the first month. What could he do to try to improve his net profit?

{ All the above } A.) Increase the prices B.) Increase the # of cupcakes he sells C.) Decrease his fixed expenses D.) All the above

3.) Sharon realizes that she needs additional research before she approaches potential investors. What kind of research should she do to effectively evaluate her potential business opportunity?

Conduct market research to determine weather her business idea is a business opportunity that meets a consumer need or want.

Sharon realizes that she needs additional research before she approaches potential investors. What kind of research should she do to effectively evaluate her potential business opportunity?

Conduct market research to determine whether her business idea is a business opportunity that its a consumer need or want.

Business Opportunity

Consumer need or want that can be potentially met by a new business

External Entrepreneurs

Create business ideas by identifying sources of opportunity.

Manufacture

Creates a products

Unit of Sale

Defines what the customer is likely going to be buying

Internal Entrepreneurs

Entrepreneurs that apply their hobbies, skills, and interests to a business opportunity.

Financial Ratios

Equations; Break- Even= (Fixed Expenses) / (Contribution Margin)

SWOT Analysis

Evaluation of a company's internal strengths, internal strengths, internal weakness, external opportunities in the market and external threats in the market.

9.)Regina is creating her competitive analysis. She understands why it's important to know her direct competitors, but she's not sure why indirect competitors matter. She asks you if indirect competitors are important to know about. What should you say?

Yes. Indirect competition is important to understand, since the different product fulfills the same customer need.

Project Organization

puts employees in more than one department together to work towards a specific goal.

6.) George and Miguel want to know more about their local and online competitors and about the retail industry. What is the best way for them to find all of this information?

{All the above} A.) Go online to find trade associations, listings, of local and national competitors, and any information on finicials. B.) Explore websites of other shoe retail businesses and take notes. C.) Try to think of friends, family members or acquaintances who have experience in retail and ask hem bat it. D.) All the above