mgmt 470 Lewis exam 1
1. Payment History 2. Amounts owed/Debt 3. Length of credit history 4. New credit/number of inquiries 5. Types of credit
Your credit score is broken down into what 5 categories?
Sales Forecast
___________ _________ sets standard for expenses, profits and growth, plus determines profitability and whether you will stay in business or not.
Managerial Tax Financial
___________ accounting: used by managers for forward looking, planning and control ____________ accounting: used for calculating and reporting taxes ____________ accounting: used by banks and outside investors
concentrated strategy
a marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group
differentiated strategy
a marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs; used when there is more than one market segment likely to need a product or service.
heterogeneity
A quality of a service in which each time it is provided it will be slightly different from the previous time.
Inseparability
A quality of a service in which the service being done cannot be disconnected from the provider of the service.
Industry Analysis
A research process that provides the entrepreneur with key information about he industry, such as its current situation and trends; Includes the industry's SIC and NAISC codes, the size of the industry, profitability, and some indication of the historical trend of growth, stability, or decline.
Internal
Consumers _______________ reference price may be based on the last time they purchased something, recollections of what they might have read or hard in the past, their understanding of how much it would cost to make it, or their perception of the value the product has.
1. Product 2. Market 3. Competitive Advantage 4. Management 5. Business 6. Finances
What are the 6 topics covered in an Executive Summary?
1. Locate Industry statistics 2. Use information from "like" goods/services 3. Locate sales figures from direct/indirect competitors
What are three general steps to building a sales forecast?
1. Write or provide materials 2. Conduct interviews
What are two essential ways to generate publicity?
Word of mouth
When it comes to promoting a small business that is just starting out, what is the fastest way to spread news and build a client base?
Rebates
_____________ are great tools for small business because the redemption rate is extremely low
Business entity concept
a business has an existence separate from that of its owners
Internal reference price
a consumer's mental image of what a product's price should be
cost
the value given up to obtain something that you want
1. To produce information that is useful to you for managing your business 2. To meet legal or contractual requirements
two primary reasons for accounting?
40 pages (25 pages of text, 15 of finances/appendix)
How long is a business plan?
hurt/decrease
If a person opens up several credit card accounts within a short period of time this will __________ their credit score.
Screening Plan
If you intend to send your plan to professional funding sources such as private banks, investment clubs, or venture capital firms, it's common to send a 'mini-plan', which gives the basic overview of the firm and a detailed look at the financials. (executive summary and financials)
Secondary research
Information already collected for some other purpose than the current problem or questions
1. Tangibility 2. Perishability 3. Inseparability 4. Heterogeneity
What are 4 characteristics that differentiate Goods and Services?
Product
anything that is offered to the market to satisfy consumer wants, needs, and demands; can include goods, services, people, and ideas.
accounting equation
assets = liabilities + owners' equity
Concentrated strategy
best marketing strategy for small business?
Going concern
business is expected to continue in existence for the foreseeable future
1. Target Market 2. Current situation/Competitive Analysis 3. Marketing Strategy and Objectives 4. Sales Plan - 4 P's
4 components of a marketing plan?
1. Major factor in determining perceptions of quality and desirability 2. Price is directly related to gross revenue and to volume you can attain 3. Easiest of all marketing variables for a business owner to change 4. Essential part of competitive strategy
4 main reasons why owners of small businesses pay so much attention to pricing?
1. Introduction 2. Growth 3. Maturity 4. Decline
4 stages of product life cycle?
loyalty programs
45% of customers spend more money in stores with ______________ _____________
1. Business entity concept 2. Going concern concept 3. Accounting equation 4. Cost vs. Expenses 5. Information usefulness
5 basic accounting concepts?
Invention Plan
A business plan that provides information to potential licensees; focuses on the market, operationalization, and details of an invention, including intellectual property rights
Inseparability Seperability
A major difference between goods and services is the _________________ of services; services are consumed at the time of production while goods have _________________ of production and consumption.
Executive Summary
A one to two page overview (250-500 words) of the business, its business model, market, expectations, and immediate goals; the most popular item to send people who ask about their business
Informational Plan
A variant of the traditional business plan that gives potential customers or suppliers information about the company and its product or service. (executive summary + company + organization)
Secondary
Always start with _____________ research data.
Proof-of-concept (website)
An Internet-based type of business plan providing information or demonstration of a product or service designed to solicit information on customer interest.
elastic
An ______________ product has lots of substitutes, or are not necessities, and for which a change in price makes a difference in quantity purchased.
inelastic
An ______________ product is something people cannot or will not do without, or for which there are few substitutes; a change in price makes very little difference in quantity purchased
Tangibility
An item's capability of being touched, seen, tasted, or felt.
25%
As a rule of thumb, keep credit card balances at ______% or less of their limit to avoid outstanding credit
1. in person 2. telephone 3. mail
Between phone, in person, and mail surveys, list from most expensive to least.
Operational Plan
Designed to be used internally for management purposes as working documents that include detailed specifications of the major techniques, methods, recipes, formula, and sources used by the firm to do its work.
three
For a start-up business, the tradition is to offer __________ years of data projections.
increase
Having no late payments on credit accounts will ____________ your credit rating
increase
Holding a variety of accounts can _____________ credit ratings.
shop
Marketing research can reveal where potential customers are likely to ________
weaknesses
Marketing research can show what the competitors are doing correctly or what their _____________ are
size
Marketing research can verify the _______ of the potential market.
Primary research
New information collected to solve a problem at hand or answer current questions; research gathered to answer a specific marketing question
Income Statement
On what financial statement can you find the Annual Revenue?
Five
Research shows it costs ________ times as much to get a purchase from a new customer compared to an existing one
credit score
The ___________ ___________ lets the lender know generally how risky of an investment it is to lend to a specific borrower.
More
The ___________ accounts with credit balances implies a greater possibility of late or missed payments
External Legitimacy
The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business or the owner's family; best way for seeking outside support
Internal Understanding
The extent to which employees, investors, and family members involved in the business know the business's purposes and operations; when you want to get all the aspects of the business clear in your mind and the minds of others in the business, such as your partners or key employees.
Appendix
The goal of the _______________ section is to provide supporting information that helps detail or support the key selling points of your plan.
Elasticity
The idea that the market's demand for a product or service is sensitive to changes in its price.
payment history
The main influence is __________ ____________, which comprises 35% of a person's credit score.
higher
The more established a person's credit history, the __________ their score will be.
1. External Legitimacy 2. Internal Understanding
Two circumstances under which creating a business plan is absolutely necessary?
Title Page
Typically contains the company name, contact information, date this version of the plan was completed, proprietary statement to protect your ideas, other disclaimers.
survey
a generally cheap and popular data-collection method using a questionnaire - in person, on phone, on paper, or internet
1. the overall strategy 2. the sales plan 3. longer term
a good marketing strategy focuses on what 3 ideas?
ethnographic research
data gathered by simple observation - seeing what consumers do, rather than asking them
expense
entries made in your accounting system to record your use of goods and services; a decrease in owners' equity caused by consuming your product
Focus group
form of data gathering from a small group, led by a moderator; 8-20 people that are asked to meet to discuss a series of questions about a particular product or service.
Direct competition Indirect competition
your competitive analysis consists of analyzing companies that make a similar product or service (__________ __________) as well as companies that provide alternatives that are dissimilar to your product/service that customers may choose to meet a similar need (_____________ _________)
Private Placement Memorandum (PPM)
A specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments; the official version of the business plan offered to potential investors
The Organization
In this section, you lay out the components and supports for the firm itself; the goal is to convince the reader that the business will be successful because it has access to high-quality people both within the firm and within larger business community, and is structured to make the best use of those people.
homogenous
Products are generally thought of as _______________ or consistent because they should have the same quality every time you buy one.
monthly yearly
Sales forecasts show __________ sales first year, ________ sales for two to five years.
heterogeneous
Services are considered more _________________ since the service may differ depending on location, skill of labor, etc.
Captive pricing
Setting the price for an item relatively low and then charging much higher prices for the expendables it uses.
Balance Sheet
Snapshot of financial holdings and liabilities at the close of business on a specified date; Minimum detail is to report assets and liabilities in two categories: Current and Long-term; Used to determine the liquidity, financial flexibility, and financial strength of the business
Company Description
Typically the first few subsections that consist of the vision statement, mission, Company Background (description of business, markets, and history), and description of your competitive advantage.
1. Income Statement 2. Balance Sheet 3. Cash Flow Statement
What are the 'Big 3 Accounting Statements' to include in the financial section?
Whether a potential client has paid past credit accounts on time.
What is a credit lender primarily interested in knowing?
Being able to pay your bills as soon as possible. Waiting until they are past due, or nearly past due will hurt your score.
What is a key first step to maintaining your credit score? What will contrarily shave points off your score?
Which survey method has the lowest return rate?
1. Equifax 2. TransUnion 3. Experian
Who are the 3 big credit bureaus?
Banks, Landlords, Employers, and Insurance Agencies
Who else, besides lenders, use FICO scores?
an audience, whether that's an outside investor who prefers to read a business plan before investing in your business, or another firm.
Who's reading your business plan?
undifferentiated strategy
a marketing strategy that uses no segmentation; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix; useful when there is really no difference in the reasons why customers buy your products and makes no sense to try to segment or target a specific market.
Cover Letter
a one-page document on business stationary that introduces the business plan and owner and indicates why the recipient is being asked to read the plan.
perishability
a service exhibits ________________ in that if it is not used when offered, it cannot be saved for later use.
External reference price
an estimation of what a price should be based on advice, advertisements, or comparison shopping
1. get an idea of how crowded the market is 2. find out its strengths and weaknesses
identifying competition does what two things for us?
publicity
information about your company and its activities that is disseminated to the public in order to going their good opinion.
Property tax
local taxes that provide the largest source of money local governments use to pay for public schools, streets, roads, police, fire protection and many other community services.
income statement
primary source of information about a business' profitability
Prestige or Premium pricing
setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol
Skimming
setting a price at the highest level the market will bear, usually because there is no competition at this time.
Partitioned pricing
setting the price for a base item and then charging extra for each additional component
economy of scale
the idea that it is cheaper to make many of an item than few
Price lining
the practice of setting three price points: good quality, better quality and best quality in an attempt to appeal to several different markets (customers with different budgets and needs)
retained earnings
the sum of all profits and losses, minus all dividends paid since the beginning of the business.
Guerilla marketing
the use of creative, unusual, and relatively inexpensive ways to reach your customer
Cash flow statement
these 6 items are included in what financial statement Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net effect of foreign exchange rates Net change in cash balance during the period Non-cash investing and financing activities
product, promotion, price, place
what are the 4 P's?