Deca Exam 2
Which three components are characteristic of a Pitch Deck?
10-20 slides Highly Visual Used to Get Investoys Attention
Business Management Roles
Chief Executive Officer (CEO) - The highest-ranking employee in the company; reports to the board of directors. Chief Financial Officer (CFO) - Creates budgets, analyzes financial data, and forecasts company profits. Chief Information Officer (CIO) - Develops policies and structures to protect company data. Chief Operating Officer (COO) - Oversees the day-to-day administrative functions of a business; second in command.
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
Which are two characteristics of fulfillment centers differ from direct distribution?
Fulfilment centers pack and ship for a manufacturer. + Warehousing is a primary role.
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.
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 1. Find out how many customers you have at the end of a given period (week, month, or quarter). 2. Subtract the number of new customers you've acquired over that time. 3. Divide by the number of customers you had at the beginning of that period.
Bank Loans = Current Liabilities Equipment = Long-Term Assets Inventory = Current Assets Mortgage Payments = Long-Term Liabilities
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Stage of Business Life Cycle
1. Existence - The business introduces itself to the market and attempts to catch the attention of potential customers. 2. Survival of the Fittest - Focus shifts to revenue, expenses, and growth. 3. Success - Company is stable and profitable. 4. Takeoff - Expansion strategies are implemented, and investment is balanced with potential. 5. 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.
Which tool is most useful in helping Customer Service support sales strategies?
A Customer Relationship Management (CRM) system is most useful in helping Customer Service support sales strategies because it ensures all customer interactions via email, live chat, and telephone exist in a single location. RM support for customer service has a primary role because customer service blends marketing, sales, support, and retention efforts
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?
A quality product should elicit a positive reaction from consumers. Two criteria the bakery can use to determine the quality of their new artisan bread are the following: • Observe customer reactions while they taste the product. • Measure sales of the new bread after customers have sampled it.
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.
Business Documents
Business Plan: A - is a multi-page document describing and detailing a business. Pitch Deck: A slide presentation for potential investors that summarizes of the key items of a business is called a -. Lean Canvas: A - is a single-page business summary template that was created by Ash Maurya.
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?
Cash balance is calculated by the following formula: (Initial Cash Balance + Projected Revenue) - Projected Expenses = Projected Cash Balance In this scenario, the Initial Cash Balance is $1,500 + Projected Revenue is $2,500 = $4,000. The Projected Expenses are Gas $100 + Equipment $300 + Truck Payment $400 + Payroll $3,000 + Insurance $120 = $3,920 So, $4,000 - $3,920 = $80. This company will go out of business next month if they don't either 1) get more clients, or 2) cut expenses!
Which is the primary characteristic of all physical and digital sales channels?
Closing sales
Elements of the Design Thinking Process
Empathize: Research Your Users' Needs Acquire an empathetic understanding of the problem you're trying to solve, typically through user research. Empathy is crucial to a human-centered design process because it allows you to set aside your own assumptions about the world and gain real insight into users and their needs Define: State Your Users' Needs and Problems Accumulate the information gathered during the Empathize stage. You then analyze your observations and synthesize them to define the core problems you and your team have identified. These definitions are called problem statements. You can create personas to help keep your efforts human-centered before proceeding to ideation. Ideate: Challenge Assumptions and Create Ideas The background of knowledge acquired from the first two phases means you can start to "think outside the box, look for alternative ways to view the problem and identify innovative solutions to the problem statement you created in the Define stage. Brainstorming is particularly useful here. Prototype: Create Solutions This is an experimental phase. The aim is to identify the best possible solution for each problem. Your team should produce some inexpensive, scaled-down versions of the product (or specific features found within the product) to investigate the ideas you've generated. This could be as simple as paper prototyping. Test: Try Your Solutions Evaluators rigorously test the prototypes. Although this is the final phase, design thinking is iterative. Teams often use the results to redefine one or more further problems, so you can return to previous stages to make further iterations, alterations, and refinements to find or rule out alternative solutions.
Which of the following is an example of Primary Data?
In this scenario, an example of Primary Data is Information collected from a poll of your company Facebook followers. Primary Data is information collected through original or first-hand research. For example, surveys and focus group discussions. On the other hand, secondary data is information which has been collected in the past by someone else.
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?
In this scenario, the two types of compensation that would be appropriate for your landscape employees would be either Hourly or Salary. There is no mechanism to calculate pay for your employees based on sales Commissions or Piece Work.
In general, which two characteristics define a "small" business?
Less then $35.5 million revenue + Fewer than 1,500 employees
Physical or Digital
Physical businesses sell their goods or services onsite. Digital businesses sell their goods or services online. In this scenario, the following are Physical Businesses: - Bakery in your community is a physical business because you must visit it to purchase goods. - Hair salon that makes appointments online is a physical business because you must visit onsite to receive the servicest In this scenario, the following are Digital Businesses: - Online store that dropships camping gear. Although the camping gear is physical, the store is online, so the business is digital. - Bookstore on Amazon that sells Books. The store is online, so the business is digital. The format of the goods is irrelevant.
Pricing Strageties
Price Skimming - involves setting high prices when a product is introduced and then gradually lowering the price as more competitors enter the market. This type of pricing is ideal for businesses that are entering emerging markets. It gives companies the opportunity to capitalize on early adopters and then undercut future competitors as they join an already-developed market. Market Penetration - is the opposite of price skimming. Instead of starting high and slowly lowering prices, you take over a market by undercutting your competitors. Once you develop a reliable customer base, you raise prices. Many factors go into deciding on this strategy, like your business's ability to potentially take losses up front to establish a strong footing in a market. It's also crucial to develop a loyal customer base, which can require other marketing and branding strategies. Premium Pricing - is for high quality products marketed to high-income individuals. Premium pricing must develop a "luxury" or "lifestyle" branding strategy to appeal to the right type of consumer. Economy Pricing - involves targeting customers looking to save as much money as possible on whatever good or service they're purchasing. Big box stores, like Walmart and Costco, are prime examples of economy pricing models. Like premium pricing, adopting an economy pricing model depends on your overhead costs and the overall value of your product. Bundle Pricing - when companies pair several products together and sell them for less money than each would be individually. Bundle pricing is a good way to move a lot of inventory quickly. A successful bundle pricing strategy involves profits on low value items outweighing losses on high value items included in a bundle.
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?
Product Quality Control Testing involves the following testing processes: - Review the results of internal quality assurance testing. - Establish the method to use for testing product quality. - Determine what standards have to be met based on the product and industry.
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?
Sales Growth = 15%. To calculate sales growth, subtract sales revenue for the last year from the current year and divide that by the sales revenue from last year. Multiply the result by 100 to get the sales growth percentage. Step 1. $402,500 - $350,000 = $52,500 Step 2. $52,500/$350,000 = 0.15 Step 3. 0.15 x 100 = 15%
Elements of a Sales Process
Step 1. Prospecting Step 2. Preparation Step 3. Approach Step 4. Presentation Step 5. Handling Objections Step 6. Closing Step 7. Follow-up
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?
The most appropriate legal structure for this business would be a C-Corp for the following reasons; C-Corporation: - Best if the company plans to someday sell stock to the public; can issue shares to founders, employees, and investors. - Unlimited owners (aka "shareholders") allowed. - Shareholders are not personally responsible for business liabilities. - Taxed twice business pays at the corporate level, and shareholders pay on income received. A separate tax return is required for the business. S-Corporation: - Offers many of the same benefits as a C Corporation, but better for smaller businesses. 100 shareholders maximum allowed. All must be U.S. citizens or residents. - Shareholders are not personally responsible for business liabilities. - Taxed once--only the shareholders pay on profits received. A separate tax return is required for the business. Sole Proprietorship: - Best if you need an easy set-up. You may still need a BA or business licenses to operate legally, but no other paperwork is. - One owner maximum. - The owner is personally responsible for business liabilities. No personal liability protection. - Taxed once--you pay on profits in your personal tax return. Separate tax return not needed. Limited Liability Company (LLC): - Popular choice for business concerned about liability protection. - Unlimited owners (aka "members") allowed. No shareholders. LLCs cannot go public. Members are not personally responsible for business liabilities. - An LLC can choose how to be taxed by filing form 8832 with the IRS. An LLC can elect to be taxed as a Sole Proprietorship, Partnership, S Corp, or C Corp. An LLC is not recognized globally; you may be taxed as a corporation in other countries.
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?
The opening of a ski resort next to the rancher's land will increase demand for housing and businesses to support the new resort. This will increase the demand for land in the surrounding area and should increase the value of the rancher's land.
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?
Three options you will need to consider regarding the mass production of your lawncare service are the following: 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.
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?
Total monthly costs of $5,000 divided by 200 haircuts = $25 per haircut.
For each statement about trademarks, trade secrets, copyrights, and patents, select True or False.
True: A Trademark protects a brand name. Trade Secrets are confidential information which may be sold or licensed. False: A Copyright is used to protect a company logo. A Patent is used to protect an original work, like music.
Product/Market Fit
True: A fit exists when people need your product rather than just seeing a potential benefit of using it. Before hypothesizing a solution, first determine if there is a problem worth solving. When users love your product so much they tell other people to use it, you have product/market fit. False: Startups should develop a growth hypothesis before testing their value hypothesis.
For each statement about the Design Thinking Process, select True or False.
True: Assumptions are challenged and ideas are created in the ideate phase. Problem statements are written in the Define phase. False: Building prototypes in the final phase of the design Thinking process. The Empathize phase tests solutions to users' problems.
Requirements to Obtain Funding
True: Bootstrapping requires the owner(s) of the company to provide all of the funding. Equity financing requires a business owner to give up control of the business to obtain funding. False: Lenders do not require owners to identify the purpose of the loan. The business owner's personal credit score does not affect their ability to qualify for a loan.
Start Up and Operating Costs
True: Logo and website design are examples of start-up costs. Operating costs include payroll. Building improvements should be calculated into start-up costs. False: Business insurance is a start-up cost. Operating costs include your down payment on rental property
Selection of Distribution Channels
True: Products that are bulky or large in size are usually sold directly by the company to their consumers. Technical and complex products are best sold through direct distribution. False: Product price has no affect on the length of a distribution channel. The geographic location of customers does not require different distribution channels.
SWOT Analysis
True: Threats identified in a SWOT Analysis are the most difficult element to mitigate. Acting on weaknesses identified in a SWOT Analysis can be challenging but often necessary to grow business. False: Opportunities identified in a SWOT Analysis are not meant to be actionable. Strengths identified in a SWOT Analysis are new actions a business should implement.