Entrepreneurship & Small Business V.2 Study Guide

Success

Company is stable and profitable. Success

Economy Pricing

Prices that targeting customers looking to save as much money as possible

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

Property lease for the office

Successful entrepreneurs have mindsets that typically possess which three characteristics? (choose three)

ADAPTABLE TENACIOUS RESPONSIBLE

Which two types of Sales Channels sell primarily to other businesses? (choose two)

B2B AND WHOLESALE

Credit must be given to the creator

BY

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

CEO

The highest-ranking employee in the company; reports to the board of directors.

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? -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 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?

$110

A barber charges $20.00 per haircut. The total cost of 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 - Numbers 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

Which two are benefits of suing Angle investors to help start a business? (choose two)

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

1. Long-Term Assets 1. Current Assets 3. Current Liabilities 4. Long-Term Liabilities

1. Equipment 2. Inventory 3. Bank Loans 4. Morgage Payments

Elements of a Sales Process

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

A photograph wants to do a SWOT Analysis with the characteristics identified. 1. Strengths 2. Opportunities 3. Weaknesses 4. Threats

1. large gallery of stock photos 2. increase in weddings expected as covid restrictions ease 3. working alone, no skilled help 4. covid pandemic restrictions disallow large family gatherings

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%

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 passes 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?

30%

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

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.

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 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. What legal structure should you set up for your business?

C-Corporation

Identifies it is a Creative Commons license

CC

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

CUSTOMER REALATIONSHIP MANAGEMENT (CRM)

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

Closing sales

You are 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

CFO

Creates budgets, analyzes financial data, and forecasts company profits.

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? (choose two)

Demographic AND Psychographic

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

Developing your own rules

CIO

Develops policies and structures to protect company data.

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

Doesn't give up easily

Takeoff

Expansion strategies are implemented, and investment is balanced with potential. Takeoff

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

Financial Instability

Survival of the Fittest

Focus shifts to revenue, expenses, and growth. Cashflow is the major issue. Survival of the Fittest

Premium Pricing

High quality products marketed to high-income individuals

What is a variable cost?

Hourly wages for an office employee

You have an idea for a new service. Market research suggest 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

Only noncommercial uses of the work are permitted

NC

No derivatives or adaptations of the work are permitted

ND

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? (choose two)

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

COO

Oversees the day-to-day administrative functions of a business; second in comand.

Which two documents summarize the business plan of a company? (choose two)

PITCH DECK AND LEAN CANVAS

Bundle Pricing

Pair several products together and selling them for less money than each would be individually

Which three characteristics help identify a business opportunity?

QUIALITY PRICE SERVICE

Adaptations must be shared under the same terms

SA

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

Schedule control

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.

Price Skimming

Setting high prices when a product is introduced and then gradually lowering the price

Market Penetration

Setting prices low until after a reliable customer base is established, then raising prices

What is Entrepreneurship?

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

Your company manufactures 72 hr. emergency kits and sells them for a law 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

Business Life Cycle:

Stage 1: Existence Stage 2: Survival of the fittest Stage 3: Success Stage 4: Take-Off Stage 5: Maturity

Design Thinking Process:

Step 1: Empathize Step 2: Define Step 3: Ideate Step 4: Prototype Step 5: Test

Existence

The business introduces itself to the market and attempts to catch the attention of potential customers. Existence

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.

Direct-to-consumer

When a brand or manufacturer sells direct to consumers and the end users of their products, as opposed to selling to them solely through retailers.

Which sale channel has been opened to manufactures because of digital tools?

direct-to-consumer

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

Which three are segments in a Marketing Plan? (choose three)

- Behavioral - Geographic - Demographic

Which two should be included when calculating start-up costs for a business? (choose two)

- Business cards - Permits, licenses, and incorporation fees

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? (choose three)

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

You download 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? (choose three)

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

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? (choose three)

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

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 service? (choose three)

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

Which are two characteristics of fulfillment centers differing from direct distribution? (choose two)

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

Which two ways can Customer Service and Support affect sales? (choose two)

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

Which two are benefits of equity funding? (choose two)

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

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

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

Which three elements are required to have a trade secret? (choose three)

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

Which three are online marketing platforms? (choose three)

- Social Media - Google Ads - Email

Which two are offline marketing platforms? (choose two)

- TV ads - Flyers and Pamphlets

Which are two characteristics of direct distribution that differ from fulfillment centers? (choose two)

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

Which three components are characteristics of a Pitch deck? (choose three)

- Used to get investors attention - Highly visual - 10-20 slides

Which of these statements help define a market/fit hypothesis? (choose three)

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

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 of the following is an example of Primary data?

Information collected from a poll of your company Facebook followers

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 want to be protected from business liabilities. Which legal structure should you set up for your business?

S-Corporation

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 attened the dance?

Surveys