GMETRIX Entrepreneurial Certification Exam Study Guide

A hair salon acquired 100 new customers last year. Costs in the marketing and sales areas were the following: - Marketing costs = $1,000 - Sales costs = $10,000 - Salaries = $96,000 What was the customer acquisition cost?

$10

You are examining the year-end balance sheet for your business. According to the information in the Balance Sheet, what is your equity in the business? BALANCE SHEET FOR YEAR ENDING DEC. 31: ASSETS: Cash: $10,000 Inventory: $2,000 Equipment: $5,000 TOTAL ASSETS: $17,000 LIABILITIES: Credit card balance: $2,500 Long-Term debt: $0 Unearned revenues: $3,500 TOTAL LIABILITIES: $6,000

$11,000

A barber charges $20.00 per haircut. The total cost for running his home-based business is $4,000.00 per month, which includes his salary of $3,000 per month. The minimum number of haircuts he must do to cover all of these expenses and his salary is 200 per month. The barber wants to increase his salary to $4,000 per month, making his total monthly expenses $5,000. What is the minimum price he must charge for each of the 200 haircuts so he can cover this increased salary?

$25

A local restaurant prides itself in having a high number of return customers. To build loyalty, the owner of the restaurant offers a free Prime Rib dinner (value $20) to any customer who purchases a meal during 10 previous visits. Meals purchased are tracked by stamps on a Loyalty Card. At the end of a month, the owner decides to calculate the customer retention cost. The data is the following: - Number of Customers at Start of Month = 100 - Number of Customers at End of Month = 120 - Number of New Customers = 40 - Value of Free Dinners Redeemed = $240 What was the Customer Retention Cost?

$3

You have a handyman services business. You have the following financial information for the month. -Initial cash balance: $1,500 -Projected revenue based on existing clients: $2,500 -Gas: $100 -Equipment maintenance fees: $300 -Truck payment: $400 -Payroll: $3,000 -Insurance: $120 What is your projected ending cash balance for the month?

$80

Place the stages of the business life cycle in the correct order.

1. Existence 2. Survival of the Fittest 3. Success 4. Take-Off 5. Maturity

The owner of an organic pet food store would like to analyze the sales data to determine if the business is growing, declining, or remaining flat. The owner has the following data: - Sales Revenue Last Year = $350,000 - Sales Revenue Current Year = $402,500 What is the sales growth?

15%

A rancher is preparing to retire. He is considering selling half of his land and giving the other half to his children. He hears that development for a ski resort was just approved on land adjacent to his property. Which viable business opportunity does the retiring rancher foresee?

An increase in land value

Which TWO are benefits of using Angel investors to help start a business?

Angel investors typically do not expect to be paid until the business begins making money. Angels often accept a lower return on investment compared to other sources of equity capital.

The owner of a landscaping business has noticed that none of his competitors are including ponds or other water features in the gardens they create. The landscaper wants to determine the viability of this business opportunity. What should this entrepreneur do FIRST before offering to design and build water features as part of his landscaping business?

Ask the customers in the area if they are interested in adding a water feature to their gardens.

Which TWO types of Sales Channels sell primarily to other businesses?

B2B. Wholesale.

Which TWO are benefits of equity funding?

Can be used to raise working capital. Investors do not get paid if the business does not make a profit.

What is a primary benefit of starting a new business without purchasing a franchise or buying an existing business?

Developing your own rules

Which Sales Channel has been opened to manufacturers because of digital tools?

Direct-to-Consumer

Which of these is a characteristic of a successful entrepreneur mindset?

Doesn't give up easily

Which is one of the greatest risks of being an entrepreneur?

Financial instability

Which are TWO characteristics of fulfillment centers differ from direct distribution?

Fulfilment centers pack and ship for a manufacturer. Warehousing is a primary role.

Which THREE are segments in a Marketing Plan?

Geographic. Behavioral. Demographic.

Which THREE are online marketing platforms?

Google ads. Email. Social Media.

You own a lawn care business. You have employees who work long hours laboring in good weather, often exceeding 40 hours per week. They also work short hours when the weather is bad, sometimes they can't work at all. You do all of the sales for your business. Which TWO types of compensation would be appropriate for these landscape employees?

Hourly Salary

Which expense is a variable cost?

Hourly wages for an office employee

You have an idea for a new service. Market research suggests the service is needed to solve a problem and will be enthusiastically embraced by customers. What is one of the first steps you must do before offering a new service?

Identify knowledge required

You have an idea for a new product. Market research suggests the product is needed to solve a problem and will be enthusiastically embraced by customers. What is one of the first steps you must do before creating a product prototype?

Identify materials

Which TWO ways can Customer Service and Support affect sales?

Increased Sales through Responsiveness and Personalization. More Sales through Customer Evangelists.

Which of the following is an example of Primary Data?

Information collected from a poll of your company Facebook followers.

In general, which TWO characteristics define a "small" business?

Less than $35.5 million revenue Fewer than 1,500 employees

You have opened a for-profit adult technical school and you want to advertise it to potential students throughout your state. Which marketing method would be most appropriate?

Local Television Ad

Match each Asset or Liability to its corresponding category on a Balance Sheet.

Long-Term Assets: Equipment Current Assets: Inventory Current Liabilities: Bank Loans Long-Term Liabilities: Mortgage Payments

A bakery has developed a new artisan bread. The staff are giving away taste samples to customers as they enter the store. What are TWO criteria the bakery can use to determine the quality of their new product?

Measure sales of the new bread after customers have sampled it. Observe customer reactions while they taste the product.

Which TWO documents summarize the business plan of a company?

Pitch Deck. Lean Canvas.

You operate a small insurance office with a partner. Which expense is a fixed cost?

Property lease for the office

You downloaded several of your favorite songs and used them in an ad to promote your product on social media sites. The ad was rejected because of the songs you chose. You are told that you violated Fair Use copyright. Which THREE are factors used to evaluate Fair Use copyright?

Purpose of your use. Amount of the work copied. Effect of your use on the potential market of the work copied.

Match each Element of the Design Thinking Process to its corresponding description.

Research your users' needs: Empathize State your users' needs and problems: Define Challenge assumptions and create ideas: Ideate Create Solutions: Prototype Try your solutions: Test

Which is one of the greatest benefits of being an entrepreneur?

Schedule control

Your company manufactures 72 hr. emergency kits and sells them for a low profit margin. You want to expand your customer base to increase your sales volume, but you have a limited budget. What marketing method would be the best choice?

Social Media

A DJ wants to analyze market reactions to the new music selections played at his dance last weekend. He advertises his weekly dances using social media and email. Which would be the most effective way to gather reactions from those who attended the dance?

Surveys

You create a new strategy for lawncare services that involves assessing lawn health, applying the correct herbicides and pesticides and other necessary solutions to quickly bring a lawn back to health. What are THREE things you will need to consider regarding the mass delivery of your source?

Training employees with the knowledge to consistently deliver the service. Finding a source of materials to support your service. Creating an effective demonstration of your service for potential customers.

Place the Elements of a Sales Process in the correct order.

1. Prospecting 2. Preparation 3. Approach 4. Presentation 5. Handling Objections 6. Closing 7. Follow-Up

Which THREE components are characteristic of a Pitch Deck?

10-20 Slides. Highly Visual. Used to Get Investors Attention.

You recently started a small affiliate marketing service. Last month, you spend $1,000 on a Pay-Per-Click (PPC) online advertising campaign that resulted in $1,200 in sales. What was last month's Return on Investment (ROI) for your affiliate marketing service?

20%

A law was passed increasing the minimum wage by 30%. The owner of a small landscaping business must now pay all of her laborers 30% higher wages. What is the minimum amount the owner must now charge customers for labor to balance her increased operational expenses? Note: Disregard associated increases in taxes, such as FICA.

30%

Which THREE statements help define a Market/Fit Hypothesis?

A fit exists when people need your product rather than just seeing a potential benefit of using it. Product/market fit exists when you have the right solution to a problem worth solving. When users love your product so much they tell other people to use it.

You need to create a legal structure for your small business. You have plans for it to grow and hope in the future to sell shares to the public. Your startup partners are citizens of Mexico and Japan. You do not want to be personally responsible for business liabilities. Which legal structure should you set up for your business?

C-Corporation

You need a photograph to use in a commercial presentation. You decide to use a photo with a Creative Commons license and implement the intellectual property guidelines for refusing the author's work.

CC: Identifies it is a Creative Commons license. BY: Credit must be given to the creator. SA: Adaptations must be shared under the same terms. NC: Only noncommercial uses of the work are permitted. ND: No derivatives or adaptations of the work are permitted.

Match each business management role to its corresponding description.

CEO: The highest-ranking employee in the company; reports to the board of directors. CFO: Creates budgets, analyzes financial data, and forecasts company profits. CIO: Develops policies and structures to protect company data. COO: Oversees the day-to-day administrative functions of a business; second in command.

Which is the primary characteristic of all physical and digital sales channels?

Closing sales

You are a technical trainer. You teach online courses to help workers more efficiently use Microsoft Office applications. What is an effective way to measure your teaching performance during an online course?

Conduct onscreen pop-up quizzes

Which tool is most useful in helping Customer Service support sales strategies?

Customer Relationship Management (CRM)

What is a Target Market?

Customers to whom a company wants to sell its products and services.

Which TWO are segments in a Marketing Plan?

Demographic. Psychographic.

Your company is manufacturing a new product. You need to establish a Product Quality Control Process. What are THREE things you must do to create establish your Product Quality Control Process?

Determine what standards have to be met based on the product and industry. Review the results of internal quality assurance testing. Establish the method to use for testing product quality.

Match each Pricing Strategy to its corresponding description.

Economy Pricing: Prices that targeting customers looking to save as much money as possible. Bundle Pricing: Pair several products together and selling them for less money than each would be individually. Market Penetration: Setting prices low until after a reliable customer base is established, then raising prices. Price Skimming: Setting high prices when a product is introduced and then gradually lowering the price. Premium Pricing: High quality products marketed to high-income individuals.

Which TWO are offline marketing platforms?

Flyers and Pamphlets. TV ads.

Match each Stage of the Business Life Cycle to its corresponding description.

Maturity: The business is separate from the owner with responsibilities delegated to staff. A business in this stage usually commands a considerable share of the market and may even be a household name. Success: Company is stable and profitable. Takeoff: Expansion strategies are implemented, and investment is balanced with potential. Survival of the Fittest: Focus shifts to revenue, expenses, and growth. Cashflow is the major issue. Existence: The business introduces itself to the market and attempts to catch the attention of potential customers.

Which TWO should be included when calculating start-up costs for a business?

Permits, licenses, and incorporation fees. Business cards.

Successful entrepreneurs have mindsets that typically possess which THREE characteristics?

Responsible. Adaptable. Tenacious.

Match each Type of Sales Channel to its corresponding description.

Retail: Selling products directly to end customers for a profit, either in-store, online, mail-order, or by phone. Wholesale: Selling products in bulk to various outlets or retailers for onward sale. Direct-to-Consumer: When a brand or manufacturer sells direct to consumers and the end users of their products, as opposed to selling them solely through retailers. B2B: Businesses that sell to other businesses who are the intended end user of the product.

You need to create a legal structure for your small business. You would like some of the benefits enjoyed by large corporations, but do not want to be taxed twice. You have four partners who will be shareholders. None of you plan to sell your ownership shares to the public, but do not want to be protected from business liabilities. Which legal structure should you set up for your business?

S- Corporation

Which THREE characteristics help identify a business opportunity?

Service. Price. Quality.

What is entrepreneurship?

Setting up a business with the aim to make a profit.

You create a new type of electric shaver that is light-weight, portable, and holds a longer charge. What are THREE things you will need to consider regarding the mass production of your electric shaver?

Sourcing materials needed for the components of the products. Finding a manufacturer. Creating your prototype to demonstrate the product's function to potential customers.

A photographer wants to do a SWOT Analysis with the characteristics identified. Setup a SWOT Analysis with the characteristics provided about this business by matching the company characteristic with the appropriate SWOT element.

Strengths: Large gallery of stock photos. Weaknesses: Working alone, no skilled help. Opportunities: Increase in weddings expected as COVID restrictions ease. Threats (T): COVID pandemic restrictions disallow large family gatherings.

Which THREE elements are required to have a Trade Secret?

Subject to reasonable efforts to maintain its secrecy. Information has economic value not generally known. Others cannot legitimately obtain the information.

Which are TWO characteristics of direct distribution that differ from fulfillment centers?

The manufacturer controls all aspects of distribution. Direct distribution is also known as a zero level channel.