Fashion Entrepreneurship Master Quiz

Complete the following equation: Gross income / Net sales = ____. net margin profitability gross margin operating margin

gross margin

How many seasonal lines are developed by most fashion manufacturers, and what are they called? 2—fall/winter and spring/summer 6-- fall I, fall II, holiday, resort, spring, and summer 5--fall I, fall II, holiday, spring, and summer 4--fall, winter, spring, and summer

5--fall I, fall II, holiday, spring, and summer

Which of the following statements best describes the location hierarchy? The search begins with a narrow focus on sites in the community, then broadens A broad regional search is systematically narrowed down to a state, then a city, and then a specific site City to state to region is the sequence of the location hierarchy search The general location for the business is limited to the area where the entrepreneur lives. The location search is focused on sites

A broad regional search is systematically narrowed down to a state, then a city, and then a specific site

Based on the information below, which of these individuals is exhibiting entrepreneurial traits? A. Monique started her business based on suggestions from friends B. Anthony started a retail store offering clothing for outdoor enthusiasts based on a need in the marketplace C. Oliver started a retail business in the suburbs of a large city because several other businesses selling the same product or service were showing signs of success in that same geographic area D. Nancie stepped in and took over the family retail business

Anthony started a retail store offering clothing for outdoor enthusiasts based on a need in the marketplace

Which of the following scenarios best represents entertailing? Karl Lagerfeld joins models on stage at the Grand Palais at the conclusion of his spring fashion show The entry to the Donna Karan flagship store on Madison Avenue in Manhattan features huge modern doors flanked by uniformed doormen The Dior store on the Golden Triangle in Paris places its best-selling merchandise category, handbags, in the department where customers enter the boutique At Champs d'Elysée, Sephora attracts customers into the store by occasionally constructing a stage area in the front of the store where musicians perform

At Champs d'Elysée, Sephora attracts customers into the store by occasionally constructing a stage area in the front of the store where musicians perform

Which of the following statements about the franchise is true? The best part about a franchise is that the franchisee has significant control over the business For a fee, the franchisor provides a system, the right to use the company name, and assistance in building the business It is illegal for franchisees to be required to pay a portion of company revenues to the franchisor Buying a franchise often reduces the risk of growing a business from scratch, and is low cost

For a fee, the franchisor provides a system, the right to use the company name, and assistance in building the business

Which terms best complete the following sentence? A business __ needs to be turned into a business ___ that can be communicated, provide direction, and provide focus. A. Concept/idea B. Idea/plan C. Concept/plan D. Idea/concept

Idea/concept

An entrepreneur can best be defined as someone who: A. Identifies a need or want in the marketplace, then develops a product to meet that need or want B. Decides to open a business, then decides on their vision about where to take it C. Is determined to start something new, but will be cautious and avoid risk D.Pursues a career in their family's business

Identifies a need or want in the marketplace, then develops a product to meet that need or want

Which of the following statements is false about inventory management and e-commerce? It is most economical to begin with a more narrow and targeted inventory. The amount of time needed to ship goods from the manufacturer can impact whether or not the e-commerce entrepreneur should buy from this vendor The amount of time needed to ship goods from the manufacturer can impact whether or not the e-commerce entrepreneur should buy from this vendor If an item is not in stock at the time of purchase, most online customers will place an order if waiting for it to arrive is a reasonable time period Plan to stock a larger amount of inventory than normal during certain times of the year

If an item is not in stock at the time of purchase, most online customers will place an order if waiting for it to arrive is a reasonable time period

In the process of opening her business, Linda discovered she is required to post a sales tax bond. What is the sales tax bond based on? A. Projected sales B. Owner's equity C. Net income D. Gross revenue

Projected sales

The term low-end goods refers to which of the following? lesser quality goods merchandise steadily in demand and rarely influenced by fashion changes budget-priced merchandise merchandise carried only by discount retailers

budget-priced merchandise

Why do apparel manufacturers strive to move their merchandise in the specialty goods arena? Here, the customer compares products on the basis of price, quality, and style rather than buying out of habit In this product area, there is a significant group of repeat buyers willing to make a special purchase effort This customer shops around for an item, looking for the best value and caring little about brand names Merchandise in this area does not require unique characteristics and/or specific brand identification

In this product area, there is a significant group of repeat buyers willing to make a special purchase effort

Which of the following statements regarding a business location is false? It can refer to the e-retailer's Web site and/or Internet links It can refer to the destinations to which a mail-order company's catalogs are mailed It can describe the retailer's physical store, catalogs, and product Web site It is limited to the physical and geographic sites of the company's headquarters and its retail outlets

It is limited to the physical and geographic sites of the company's headquarters and its retail outlets

Which of the following statements is false about the tracking plan? It is used as a reference when adjusting stock content by area It is most effective for the fashion entrepreneur designing and building a new store It is an excellent and inexpensive method that can be used to maximize the sales potential of floor space By observing customer behavior, "hot spots" where merchandise sells quickly and "cold spots" where it may sit untouched can be identified

It is most effective for the fashion entrepreneur designing and building a new store

Which of the following is the best advice for naming a Web site? It should be short, simple to remember, alphabetically strategic, and keyword sensitive It should be unique so that it can be registered as a domain name As it is a virtual address, it should reflect the physical address of the business It is not necessary to choose a domain that indicates the type of business or its target customers; it's more important to make it memorable

It should be short, simple to remember, alphabetically strategic, and keyword sensitive

Which of the following statements is false regarding a resident buying office? It provides services such as forecasting trends, recommending new vendors, and planning promotions It represents noncompeting retailers that pay for its advisory services Its primary function is to locate vendors and place orders for its client retailers' sales floors It assists with the development of private-label goods

Its primary function is to locate vendors and place orders for its client retailers' sales floors

The main difference between inventory valuation using LIFO or FIFO is LIFO places higher value on the latest inventory receipts; FIFO applies higher value to goods received first FIFO places higher value on the latest inventory receipts; LIFO applies higher value to goods received first Neither of these are methods for valuing and recording inventory LIFO and FIFO have the same criteria for valuing merchandise, but have different tax implications

LIFO places higher value on the latest inventory receipts; FIFO applies higher value to goods received first

Which of the following is not a reason for the growth of e-commerce? a steady stream of new customers low start-up costs a wide range of sellers specializing in diverse product categories Legislation for brick-and-mortar retailing does not apply to e-commerce

Legislation for brick-and-mortar retailing does not apply to e-commerce

What kind of statement communicates what a company does, who it does it for, and how it does what it does? A. Purpose B. Mission C. Idea D. Vision

Mission

What is a resource that provides information about shopper traffic and conversion trends? National Retail Federation (NRF) National Retail Traffic Index (NRTI) Index of Retail Saturation (IRS) Index of Consumer Behavior (ICB)

National Retail Traffic Index (NRTI)

What is the primary difference between operations and control? Control is concerned with how to do things; operations are concerned with what can be done better Operations are viewed from an internal perspective; control is viewed externally Operations are the procedures that actually run the business; control compares results to goals and objectives Control regulates the day-to-day functions of a business; operations monitors the long-term functions of a business

Operations are the procedures that actually run the business; control compares results to goals and objectives

What is one of the most important purposes of the business planning process? A. Serve the sole purpose of validating the assumptions of the entrepreneur B. Determine strict guidelines for the entrepreneur to adhere to implement exactly C. Help the entrepreneur identify a potential opportunity D. Outline the focus and direction for the business

Outline the focus and direction for the business

Entrepreneurs would consider experience in the field, beliefs, life balance, and time when evaluating the business concept against what kind of choices? A. Financial B. Professional C. Educational D. Personal

Personal

What is among the top reasons for business failure? A. Failure to invest in capital assets B. Poor management by the entrepreneur C. A shift in consumer behavior D. Short-term financing

Poor management by the entrepreneur

Which of the following statements about unsought goods is false? An example of unsought goods is Snuggie Initially, the customer does not specifically look to find this merchandise Unsought goods often have short selling lifespans Promotion is not critical to selling unsought goods

Promotion is not critical to selling unsought goods

Meredith is carefully studying the economic, financial and political realities in which her new business will operate. What is Meredith doing? A. Researching for product development B. Identifying characteristics of her intended customer C. Researching her business concept D. Establishing a strategic position for her fashion retail store's product

Researching her business concept

Many customers will accept a low augmented product level in exchange for a low price. Which customer purchasing a new watch is an example of this? She looks at her purchase as a long-term investment and will save to buy the Rolex with its long-term warranty and after-sales services She checks out fast fashion retailers and buys a chic and cheap watch at H&M She sees a prestige Michele watch in a magazine and hunts down the best price in stores and online She finds the perfect watch at T.J.Maxx. It's a brand name, no box, minimal warranty, and a great price

She finds the perfect watch at T.J.Maxx. It's a brand name, no box, minimal warranty, and a great price

Which of the following are examples of private label brands? Burberry Exclusively for Bloomingdale's Nike and Adidas Strafford of JCPenney and I.N.C Macy's Jessica Simpson and Levis

Strafford of JCPenney and I.N.C Macy's

Which of the following statements is false about nonselling space? Typically, a store has 15 to 35 percent of its space dedicated to nonselling space The amount of square footage to be allocated for displaying and housing merchandise to be sold is not considered nonselling space The more selling space a business has, the greater the opportunity is to generate sales volume The amount of nonselling square footage in a store will not affect the estimated sales per square foot calculation for the business

The amount of nonselling square footage in a store will not affect the estimated sales per square foot calculation for the business

Which is these statements is not true? The business plan serves as a management tool for measuring whether the company is on target with its projections and goals The business plan defines the company, its goals and objectives The business plan should be at least 40 pages long The business plan defines a strategy for exiting the business

The business plan should be at least 40 pages long

Which of the following is not an advantage of market weeks for buyers? The buyer can order new merchandise and bring all back to the store The buyer can gain information by attending seminars held about fashion trends, visual merchandising, and other topics The buyer can meet with buyers of other stores to develop a support network during market week The buyer can review the lines of many vendors in a short period of time and comparison-shop before actually ordering merchandise

The buyer can order new merchandise and bring all back to the store

Which of the following statement regarding the retailer's returns to vendors is false? The buyer may negotiate with the manufacturers' representative to receive a merchandise exchange or a credit toward future purchases A return authorization must be attached to the carton containing the return to ensure the shipment will be accepted at the receiving dock of the manufacturer The buyer may immediately return defective merchandise to the vendor, whether it arrived this way or was returned by a customer The buyer must request a return authorization label from the vendor before sending back merchandise

The buyer may immediately return defective merchandise to the vendor, whether it arrived this way or was returned by a customer

Michael Yang has an idea and is planning to open it as an e-commerce business. Which of the following should not be part of his plans? The idea must be examined and carefully evaluated using variety of methods The idea should be assessed using many of the same steps needed to start a traditional brick-and-mortar business The idea needs to be developed to its full potential The idea will not need to be developed into a formal business plan

The idea will not need to be developed into a formal business plan

What is the difference between a letter of intent and a purchase agreement? The letter of intent is sent to the business seller; the purchase order is filed with the local government's business office by the business owner. The letter of intent discusses price; the purchase agreement examines all other selling issues The letter of intent informs the seller that the buyer is serious and sets a timeline of negotiations; the purchase agreement specifies results of negotiations The letter of intent is a first draft of the purchase agreement

The letter of intent informs the seller that the buyer is serious and sets a timeline of negotiations; the purchase agreement specifies results of negotiations

Which of these statements best describes the management plan? The management plan should address the key roles of the management team, but not focus on duties and compensation The management plan addresses the operational aspects of the business, in addition to the key management team roles The management plan addresses the critical success factors that influence the management team The management plan addresses the management team, compensation, team qualifications, and communication

The management plan addresses the management team, compensation, team qualifications, and communication

Cameron plans to open a business based on identifying a need in the fashion retail market. In order to develop an effective business concept statement, he plans to conduct research primarily what areas? A. Products and services B. Consumer demographics and the industry C. Finance and target market D. The market and the industry

The market and the industry

Which of the following statements about the retail operations plan is true? The retail operations plan demonstrates the entrepreneur is knowledgeable of merchandising The retail operations plan demonstrates the entrepreneur knows how to hire the right people to make the business successful The retail operations plan demonstrates the entrepreneur understands the importance of administrative policies, procedures, and controls The retail operations plan addresses the amount of cash the entrepreneur will have on hand to pay suppliers

The retail operations plan demonstrates the entrepreneur understands the importance of administrative policies, procedures, and controls

Which statement about space value is false? Selling areas on the main level contribute a greater portion to sales than do those on the other floors Typically, the farther away an area is from the entrance, the lower its value It is the value of each square foot of space in the store with respect to generating sales revenue There are no ways to increase lower space values

There are no ways to increase lower space values

Which statement is true about a product in the growth stage of the product life cycle? Many times, in order to compete, prices must be lowered to hold market share At this stage, the product is often found in discount stores and on markdown racks Typically, profits increase as the demand for the product increases Profitability is often low due to the costs of marketing the product to potential consumers

Typically, profits increase as the demand for the product increases

Which of the following is not typical of the characteristic of a successful organization's culture? assertiveness participative management style empowerment direction

assertiveness

The owner selling a successful business may include a charge for an intangible asset of the business, to include the business name and logo, its clientele list, and such. What is this called? image reimbursement blue sky acquisition reputation fee

blue sky

What is the process of attaching a name, an image, and a reputation to a thing, product, service, or idea? trademarking branding copyrighting sponsoring

branding

Which of the following describes a general line of products? a specialty store, such as Forever 21, that carries a particular product category with depth of selection for a general clientele, such as junior girls an electronics store, such as Best Buy, that carries a wide range of products to include appliances, computers, iPhones, office products, etc. a department store, such as Dillard's, that features women's, men's, and children's apparel, as well as home furnishings and home accessories an e-commerce site, such as Zappos, that offers shoes and apparel

a department store, such as Dillard's, that features women's, men's, and children's apparel, as well as home furnishings and home accessories

Kendall is considering opening a shoe store in an area close to her home. Which of the following would be considered direct competition? a shoe store operating in the same area, but selling brands different from those of Kendall's a large retail supercenter selling the same brands as Kendall's an online shop selling the same brands as Kendall's a shoe store already operating in the area selling many of the same brands of shoes Kendall wishes to carry

a shoe store already operating in the area selling many of the same brands of shoes Kendall wishes to carry

What does it mean to use the objective and task method to establish the advertising budget? costs are budgeted as a percentage of net income advertising is increased in anticipation of new customers advertising expenditures are linked to specific goals costs are budgeted as a percentage of sales

advertising expenditures are linked to specific goals

In the market research process, what is the final step? conducting primary research analyzing the information conducting secondary research analyzing the competition

analyzing the information

What term refers to the last day that the vendor is authorized to ship merchandise specified on a particular purchase order? lead time cancellation date backup order 4-5-4 calendar

cancellation date

A financial statement that reflects the difference between the cash a company expects to receive and its expected cash expenditures, on a monthly basis, is called the operating and expense statement balance sheet cash flow statement income statement

cash flow statement

As a start-up or early stage fashion retail business, entrepreneurs are often concerned about the business's ability to meet its cash obligations as they come due. The entrepreneur would be well advised to review his or her income statement profit and loss statement balance sheet cash flow statement

cash flow statement

Lauren, a local entrepreneur with a start-up business, recognizes that she will have to advertise to increase her chances of growing the business, but funds are limited. She uses the percentage of sales method to establish her advertising budget. What does this mean? the size of her potential market share should be taken into consideration costs are budgeted as a percentage of sales costs are budgeted as a percentage of net income advertising dollars are linked to specific objectives

costs are budgeted as a percentage of sales

This term refers to the ease with which customers can enter the establishment, move about the business, and find the merchandise they are seeking. tracking plan customer mobility selling space tracking merchandise

customer mobility

What term refers to the additional amount of time a vendor provides a retailer for payment due? POS EOM just-in-time dating

dating

As Alan's retail business grew, he recognized the importance of an organizational chart. The organizational chart communicates information about the duties and activities necessary for each position includes the job titles, to whom the employee will report, and a brief statement regarding the major job duties communicates the job description for each role required to make the business successful defines how the business is organized and illustrates the relationship among the job positions

defines how the business is organized and illustrates the relationship among the job positions

Entrepreneurs recognize the importance of branding to the business. What is the first step in creating a brand? determine a vision for the brand conduct market surveys evaluate the competition develop an advertising campaign

determine a vision for the brand

What term refers to the manufacturer's policies concerning to which retail operations and to where the line is to be shipped? cooperative advertising location analysis geographic legislation distribution practices

distribution practices

Products or goods that the customer normally comparison shops on the basis of quality style, price and uses often, such as apparel and accessories, are known as what two kinds of goods? service, convenience intangible, specialty unsought nondurable durable, shopping

durable, shopping

When is the time to introduce a new product to the product mix? during the early life cycle of the current product, when sales are strong, and profit margins are higher during the business's maturing stage, when sales generally continue to increase, but typically at a slower rate during the growth stage of a business, when a larger number of consumers begin to accept and purchase the product during the declining stage of a business, when selling discounted merchandise makes room for new products

during the early life cycle of the current product, when sales are strong, and profit margins are higher

As a fashion retail entrepreneur, Sally should be particularly concerned with three primary outcomes: cash flow, profitability, and financial ratios the 6-month merchandising plan financial performance capital expenditures

financial performance

What term describes an early-stage community that becomes established through growth outside of a metropolitan area? first ring suburb central business district neighborhood power center

first ring suburb

Start-up costs are categorized in two broad categories, capital expenditures and expenses. Which of the following would be categorized under capital expenditures? office supplies fixtures opening stock marketing material

fixtures

The difference between target marketing and mass marketing is that target marketing focuses on a specific group of potential customers most likely to purchase the product or service, while mass marketing focuses on an entire market focuses on short-term objectives, while mass marketing focuses on longer term objectives focuses on increasing sales, while mass marketing focuses on increasing profits focuses on the larger market while mass marketing focuses on a specific group of potential customers

focuses on a specific group of potential customers most likely to purchase the product or service, while mass marketing focuses on an entire market

Luke and Steven just launched their men's clothing store. They would like to be able to obtain additional advice, guidance, and ideas from experts. Given their current circumstances, which of the following is probably the best way for them to achieve this goal? add another business partner hire a consultant form an advisory team join a professional association

form an advisory team

What term describes the company that owns the business, and what term describes the entrepreneur buying the rights to operate a business in the format designed by the company? franchisee, franchisor franchisor, franchisee franchise, investor franchisor, franchise fee

franchisor, franchisee

What store layout creates a relaxed and friendly shopping atmosphere, and has been shown to increase the number of impulse purchases customers make? boutique free-form grid racetrack

free-form

Natasha recognizes the importance of determining the roles and tasks required to make her fashion business successful. She knows she first needs to develop a job analysis. The job analysis communicates the power relationships among owner, manager, and employees gathers information about the duties and activities necessary to perform a job identifies only the specific tasks involved in the job defines how the business is organized and illustrates the relationships among job positions

gathers information about the duties and activities necessary to perform a job

The primary purpose of the business plan is to guide a company by plotting a strategy for its success meet legal requirements designed to protect the entrepreneur attract lenders and investors enable the fashion entrepreneur to take his or her company public

guide a company by plotting a strategy for its success

Effective leaders possess qualities that are somewhat different from managers. Which of the following is most characteristic of a good leader rather than a manager? guiding and motivating people delegating conflict resolution to others the ability to focus on the logistics of the business the ability to plan, organize, and coordinate

guiding and motivating people

In the marketing research process, what is the next step following researching the industry? identifying and understanding the market analyzing the information researching the location analyzing the competition

identifying and understanding the market

Two factors addressed in the marketing plan that would impact the success of the business include pricing structures and product description operational considerations and the competition industry trends and pricing structures the management team and distribution methods

industry trends and pricing structures

Which of the following is not characteristic to include in the merchandising/product plan? markup/markdown policies proprietary aspects merchandise assortment inventory control

inventory control

What is the term for the vendor's detailed shipment listing with prices, and what is the term for the vendor's listing of merchandise in a particular carton or container? invoice, packing slip packing slip, invoice purchase order, merchandise breakdown merchandise breakdown, purchase order

invoice, packing slip

What term refers to an inventory replenishment system set up between a vendor and retailer in which inventory is shipped as it is sold? Give an example. shrinkage, time shrinks between the buyer's order and product fill-ins through adequate backstock in the store ready response, the buyer can place special orders for individual customers, and the manufacturer ships them directly to the customers book inventory, the buyer plans an inventory assortment for a specific product; the vendor's merchandise coordinator comes to the store to count stock and write reorders just-in-time, Dillard's hosiery buyer sends sales data to Hanes as soon as the merchandise is sold. As the buyer has established a model stock with the vendor, Hanes can automatically ship fill-ins for sold merchandise

just-in-time, Dillard's hosiery buyer sends sales data to Hanes as soon as the merchandise is sold. As the buyer has established a model stock with the vendor, Hanes can automatically ship fill-ins for sold merchandise

Challenges for franchisees may include the franchisor requiring the entrepreneur to operate certain hours or to use only preapproved advertising. What are these issues called? sales restrictions business standards employee terms limitations on methods of operation

limitations on methods of operation

Vendors often require start-up fashion retail businesses to pay for orders up front. In addition, new fashion retail businesses often experience cash flow issues when the business is first opened. How should the entrepreneur finance their cash shortage? SBA guaranteed loan credit cards line of credit venture capitalists

line of credit

One tool for motivating employees is the use of a performance appraisal. To ensure this tool is designed to provide helpful feedback to the employee, the entrepreneur should make sure the performance appraisal outlines the financial performance of the company links the job description to the employee's performance outlines goals that are more vague to give the employee room to interpret expectations outlines the expectations of the employee

links the job description to the employee's performance

Identifying indirect competitors involves looking at customers' wants and needs rather than specific products or services talking to competitors selling the same products or services in your geographic area identifying companies that produce a virtually identical goods or service that is offered for sale within the same market as your company identifying a business that is competing with yours by selling the same product or service

looking at customers' wants and needs rather than specific products or services

In marketing terms, what does place mean? making sure that the product is available where and when it is wanted making sure the product serves several markets in various geographic locations getting the product from one location to another utilizing traditional distribution methods

making sure that the product is available where and when it is wanted

Which of the following is not among the buyer's responsibilities? pricing the merchandise and assigning floor space to items or lines managing personnel in the departments carrying the buyer's merchandise locating and purchasing appropriate merchandise for the target customers selecting specific merchandise for visual presentation and promotion

managing personnel in the departments carrying the buyer's merchandise

Which of the following is not addressed in the marketing plan? merchandise assortment basis for differentiating your business from the competition target customers potential size of market

merchandise assortment

What is the term for the buying and selling of goods? merchandising management promotion branding

merchandising

The remaining income or revenue left after all expenses have been paid is called net income cost of goods sold assets owner's equity

net income

What are three common avenues used by entrepreneurs to find potential employees for the business? networking, classified ads, or employment agencies marketing agencies, CPA's, or banks observation, employment agencies, or Department of Labor department of labor, classified ads, or employment agencies

networking, classified ads, or employment agencies

What is the term for an online community of people? What is the term for radio programming produced with a computer, microphone, and a Web site for posting programming? newsgroup, podcasting niche, portal podcast, e-newsletter blog, newsfeed

newsgroup, podcasting

How can e-trepreneurs turn the challenges of brick-and-mortar, such as holiday rush purchases, into online sale opportunities and profit? offering 24/7 accessibility and return credits increasing service representatives and streamlining inventory offering expedited deliveries and stocking up on inventory increasing advertising and offering discounts

offering expedited deliveries and stocking up on inventory

Which of the following describes the third level of enhanced customer service the Internet entrepreneur may offer? discussion boards or blogs downloadable images or documents online demonstration and tutorials, live or 24/7 customer support, and second-language viewing options easy navigation, site search, and increased working links

online demonstration and tutorials, live or 24/7 customer support, and second-language viewing options

What describes the e-business model that most closely resembles a traditional brick-and-mortar store? shopping cart auction portal online storefront

online storefront

What terms refer to how much money the buyer will spend in each merchandise classification monthly and orders that have been placed with the vendors, but have not been shipped or received? six-month plan, backstock six-month plan, purchase journal open-to-buy, on-hand stock open-to-buy, on-order

open-to-buy, on-order

What is a shared system of meaning of how things are done in a particular company? organizational systems collective sensemaking organizational culture cultural sensitivity

organizational culture

What term refers to the number of people per square mile residing in a given area? space value population density demographic and psychographic analysis customer traffic pattern

population density

Define value-based pricing. setting a relatively higher price for a produce or service initially, then lowering the price over time pricing the product based on the perceived worth of the good or service to the intended customer pricing the product at a low price point to introduce the product to a market and promoting that product heavily pricing merchandise at the top of the relevant price range

pricing the product based on the perceived worth of the good or service to the intended customer

The marketing mix would not include price profit product place

profit

Small businesses often find it difficult to compete with larger companies. What is one of the more common ways a small business can differentiate itself from the larger competition? send direct mail notifications of promotions and sales offer seasonal promotions offer discounted merchandise to select target markets provide exceptional customer service

provide exceptional customer service

Annie Diaz has been employed as a new sales associate. She will be assigned a monthly sales goal and will receive a specified percent of commission on sales generated above this goal. This remuneration is referred to as bonus payment base plus commission quota plus commission fixed-rate compensation

quota plus commission

Internal sources that a buyer uses to forecast sales for a season include reports from resident buying offices and their forecasting divisions trade publications, such as Women's Wear Daily, Stores, and Footwear New, and consumer publications, such as Vogue, InStyle, and Harper's Bazaar Internet subscriptions to forecasting Websites, such as wgsn.com records showing merchandise performance by vendor, including the selling rates of each vendor by style, color, price point, and size

records showing merchandise performance by vendor, including the selling rates of each vendor by style, color, price point, and size

Secondary data might come from which of the following? reports and directories mystery shopping or observation industry events interviews

reports and directories

Which of the following ideas should be discussed in the management section of the business plan? required qualifications of key employees disciplinary process and procedures the use of outside consultants legal structure of the business

required qualifications of key employees

What is the term for what franchisors may charge based on a percent of weekly or monthly gross income? commission profit margin operating income fee royalty payment

royalty payment

In terms of space allocation, what are the four main types of space in a retail operation? sales, employees, receiving, and customer services merchandise display, technology, backstock, and staff merchandise warehousing, office, dressing rooms, and cash desk sales, customer service, merchandise warehousing and handling, and personnel

sales, customer service, merchandise warehousing and handling, and personnel

In what kind of advertising are products or Web sites tied to specific keywords? pop-up banner classified search engine

search engine

Which of the following are considered obstacles to effective communication? selective listening, ambiguity, targeting the incorrect audience patience, open-mindedness, faulty assumptions lack of clarity in the message, honesty, targeted listening selective listening, effectively communicating the company's vision, the right timing to delivering the message

selective listening, ambiguity, targeting the incorrect audience

The term product is not concerned with packaging selling warranty branding

selling

The brick-and-mortar location plan describes the physical location and any online presence the business will pursue should describe the amount of physical inventory necessary to be successful should describe the layout and building structure of competitors should describe the business in terms of its physical location, location features, leasehold improvements, and signage

should describe the business in terms of its physical location, location features, leasehold improvements, and signage

The initial responsibility of a business plan is to help to develop what kind of business strategy for where the business is going and how it is going to get there? strict regional hidden solid

solid

What are the three primary ways an entrepreneur can enter a business market? building a brick-and-mortar business, starting an e-commerce business, or creating a combination of these creating a new concept, copying an successful business, or franchising an existing business building, buying, or leasing a business location starting from scratch, purchasing a franchise, or buying an existing business

starting from scratch, purchasing a franchise, or buying an existing business

What do you call a measurement of inventory performance calculated as a simple fraction in which the numerator represents sales for a period and the denominator shows the average size of stock during that same period? inventory level stock-to-sales ratio operating costs stock turn

stock turn

Of the various reasons for planning an exit strategy before opening a business, the most important and prudent is that the entrepreneur can always make money selling the business and its assets if leaving it is the best option that it allows the entrepreneur to move on if the business isn't as profitable as planned that business funders will want a plan for valuing and exiting a business before they will provide finding for it that it is best to wait to develop an exit strategy until it's needed, rather than to go into business with a negative approach

that business funders will want a plan for valuing and exiting a business before they will provide finding for it

What is the primary characteristic of secondary data? that it includes sources such as surveys and mystery shopping that it is often free that it requires interviews and focus groups to gather information that is already exists

that is already exists

Which of the following examples illustrates a salvage investment? the business that is currently not successful, but for which the entrepreneur believes he or she knows the problems and how to resolve them the company that has been closed and out of business for a long period of time the new, thriving business that will provide a good return on investment the business requiring an investment of capital, but no day-to-day involvement by the entrepreneur

the business that is currently not successful, but for which the entrepreneur believes he or she knows the problems and how to resolve them

The financial plan consists of four key components. What are they? the balance sheet, the profit and loss statement, the assumptions, and the bank statements. the cash flow statement, the profit and loss statement, the assumptions, and the balance sheet The profit and loss statement, the asset allocation statement, the balance sheet, and the cash flow statement the cash flow statement, the balance sheet, the income statement, and the balance sheet return.

the cash flow statement, the profit and loss statement, the assumptions, and the balance sheet

Which of the following statements best describes prime selling space? the location in the store with the highest level of customer traffic the place in the store where the most expensive items are available the store windows and entrance that entice consumers into the retail operation the location in the store where basic, or replenishment goods, that consumers buy often are stocked

the location in the store with the highest level of customer traffic

What is the break-even point of a business called? the point at which the cash balance in the bank account is the same as current inventory the point at which the company shows neither a profit nor a loss, but dimply covers all its costs the point at which actual sales are the same as projects sales in the financial plan the point at which current inventory is equal to last month's sales

the point at which the company shows neither a profit nor a loss, but dimply covers all its costs

A number of considerations are taken into account when developing a Web site. What is one of the first things to be considered? the down time of the hosting site the cost of the site the level of online traffic the site will generate the purpose of the site

the purpose of the site

How is a distribution channel defined? the companies that actually produce the goods you want to sell the companies that provide materials and equipment needed to manufacture the product the route taken to move the product to the consumer the network created among different companies producing, handling and/or distributing a specific product

the route taken to move the product to the consumer

Including a written set of assumptions to accompany the financial statements is very beneficial because they show the historical revenue and profitability of the company they provide the reader with an explanation of the sources of information and thought process behind the financial statements they allow the entrepreneur to forecast sales for future growth they allow the entrepreneur to modify the accompanying financial statements as needed

they provide the reader with an explanation of the sources of information and thought process behind the financial statements

What kind of operation is a business that is completely set up to begin operation? turnaround blue sky salvage investment turnkey

turnkey

Olivia owns a small accessories business in the downtown area of a major city. Because hers is a newly opened business, she lacks experience in warehousing and distribution, compared to her competition, which could lead to overstocking. In preparing her SWOT analysis, what would this be considered? opportunity strength threat weakness

weakness

The online marketing strategy is best addressed in what section of the business plan? competitive analysis retail operations plan marketing plan web plan summary

web plan summary

Which of the following apparel products would likely be classified as basic goods? fit and flare skirts and leather motorcycle jackets white t-shirts and sneaker socks skinny jeans and print leggings bohemian crochet vests and peasant shirts

white t-shirts and sneaker socks

Rogan found many reliable sources for financial information on which to base his financial projections for his new fashion retail store. Which is the first place fashion retail entrepreneurs should look? financial advice from both local and national competitors studies of financial statements such as Dun and Bradstreet or RMA within the industry, sources such as trade associations provide information about sales and expenses journals and magazines

within the industry, sources such as trade associations provide information about sales and expenses