Entrepreneurship and Small Business (ESB)

A restaurant owner finds that 68% of customers never come back. What is the most important thing the restaurant owner should do to have a higher percentage of repeat customers?

Listen to customers

What category on a balance sheet would 20 year loan on company property fall under?

Long Term Liabilities

Which are three risks of entrepreneurship?

Long hours

What is an advantage of buying a franchise?

Marketing assistance

A local micro-brewery wants to retain and develop close relationships with its customers.What is the best option for the micro-brewery to accomplish this goal?

Provide gifts each holiday season

Which of the following is an example of behavioral segmentation?

Homeowners who are highly price sensitive

Which of the following is an example of demographic segmentation?

Homeowners with higher incomes

A restaurant owner wants to attract more customers by getting enough ratings to appear on a popular social media site. The owner can generate 10% more business by reaching an additional 100 reviews. He knows that if he provides one - hundred 50% off coupons for meals, he can get 100 reviews.How much will it cost to increase business by 10% if reach coupon is likely to cost $15?

$1,500

A mechanic wants to start a business. The mechanic believes the business will cover its own costs after two months, and the start up expenses through that time will be $125,000.The bank asks the mechanic to complete a form with the following information. A Estimated investment in "start-up expenses" B "contingency amount" (equal to 10% of "A") C "start-up capital (A+B) D (one-half of C) E (sum of D+C) What is the answer for E?

$206,250

A beautician is preparing a cash flow statement for the year that just ended. The beginning cash balance was $2575. Cash sales were $41,340, annual chair rental was $4800, $2635 paid for supplies, licenses, and fees were $750. What was the ending cash balance?

$35,730

In the first week of January, a landscaping company had a beginning cash balance of $25,000. During this time, the company's inflow and outflow of cash include the following: Sales $10,000, AR collected $180,000, Asset sales $30,000, Direct materials and labor $(106,000), Manufacturing overhead $(29,000), Selling and administrative costs $(35,000), Asset purchases $(20,000) What is the ending balance?

$55,000

A firm is analyzing cash flow from the previous year. Beginning inventory balance was $5350. New inventory purchases were $6560. $4760 of items were used on work for the clients. What was the ending inventory value?

$7150

A gourmet chef sells high-priced, high-profit chocolates out of a very expensive store location in a very wealthy area. The store's fixed costs are $300,000 per year. The variable costs to make a box of chocolates average $10, including costs of ingredients, packaging and labor. Because the chocolates are so delicious, the store can sell them for $35 per box. How many boxes does the store need to sell to cover its fixed costs?

1,200

A mechanic generates $1,000 in revenue per repair, with a gross margin of 40%. The mechanic needs to earn $10,000 in gross margin per month to break even. Through experience, he finds that 20% of active prospects buy within 30 days. How many prospects should the mechanic have in the active client listings at all times, at a medium?

125

A baker serves a high-end market, including celebrity weddings. On average, the baker makes $1000 in gross margin per sale. The baker's monthly overhead expenses are $15000. Through experience, she finds that 10% of her active prospects buy within 30 days. At a minimum, how many prospects should the baker have in her active client listings at all times?

150

A furniture builder generates $1,000 per sale on average, and she needs to generate $12,000 per month to break even. Through experience, she finds that 20% of her active prospects buy within 30 days.How many prospects should the furniture builder have in her active client listings at all times, at a minimum?

60

Business Risk Legal Risk Reputational Risk Financial Risk

A competitor launches a new product that reduces your revenues. A competitor sues your company for stealing their new product idea A customer finds a dead mouse in a box of your chocolates

Providing 24 hour member access

A fitness trainer is presenting a business plan for a new studio to investors. The trainer envisions a studio with equipment and features that will meet the needs of customers with a variety of personal and work schedules. What studio feature would appeal to customers with demanding schedules?

Which expense is fixed

Property lease

12,000

A gourmet chef sells high-priced, high-profit chocolates out of a very expensive store location in a very wealthy area. The store's fixed cost are $300,000 per year. The variable costs to make a box of chocolates averages $10, including costs of ingredients, packaging and labor. Because the chocolate are so delicious, the store can sell them for $35 per box. How many boxes does the store need to sell to cover its fixed costs?

Service

A head chef conducts a survey of other restaurants in the area. The chef notices that most customer complaints primarily come from takeout order being delayed. The chef believes that having a short-order cook dedicated to primarily come from takeout orders being delayed. The chef believes that having a short-order cook dedicated to primarily come from takeout orders being delayed. The chef believes that having a short-order cook dedicated to preparing carryout orders will make his restaurant the fastest and most dependable place for takeout customers. By spending scare resources on hiring a short-order cook, what competitive advantage factor is the chef trying to achieve at his/her restaurant?

A) Sending discount coupons to car owner who lives within 5 miles of the shop B) Giving current customers a loyalty discount

A new auto mechanic business wants to grow revenues. What are marketing methods that promise to create new customers? Pick the two best answer.

Which is a benefit of buying a successful existing business?

A proven operation

B) Indicate on the blog that the fire 50 customers who visit when the bakery opens the next day will get "buy two, get one free" on the new cupcakes C) Give out free samples during high-traffic times when the store has the staff to handle a crush of customers

A successful bakery on street with lots of foot traffic is introducing a new line of animal cupcakes. The bakery already has a large number of loyal customers who follow the bakery's "What's New Sweetie?" blog. While the bakery is an active user of social media, like most small businesses it doesn't have lot of available cash to spend on paid advertising. What sales and marketing steps might prompt current and new customers to try new cupcakes?

Hotels

A travel agent wants to start-up a new travel company. He pays a market research company to survey 100 frequent affluent vacation travelers about luxury travel options. The market research responses: Which luxury travel service would contribute the most to the profitability of the start-up business?

Sales (in units) of the new product line

A young entrepreneur has launched a new product line on her website. Her business is already successful-the website has lots of traffic. The goal of this marketing campaign is to determine whether customers who love the company's current product will be willing to buy this new product line. Which one of the following metrics will best measure success?

An independent pizza operator wants to reach customers who eat pizza at a competing national chain. Which is a strategy for identifying those customers?

Accept competitor coupons

An independent pizza operator wants to reach customers who eat pizza at a competing national chain.Which is a strategy for identifying those customers?

Accept competitor's coupons

A dog grooming business is legally structured as a sole proprietorship. What are the tax implications for this structure?

All profit earned by a sole proprietorship is income earned by the owner, for which the owner will have a tax liability

80

An independent insurance agent on average receives $150 in commissions per policy underwritten. ("Underwritten" is the term for "a policy sold" in the insurance industry.) the agent's overhead is $3,000 per month. Through experience, he finds that 25% of active prospects buy within 30 days. How money prospects should the agent have in the pipeline at all times to have a good probability of generating enough in commissions to cover his overhead expenses?

What is a benefit for entrepreneurs in using angel investors for start-up equity?

Angels have no say in the management of the business

Networking

Areal estate agent who works exclusively with business clients looking for office space (call a "commercial real estate agent") wants to use a form of personal communication to contact local business leaders. Because office space leases are signed for large sums of money every few years, it's important that the commercial real estate agent build a long-term relationship with potential clients. That way, when the moment comes to seek new office space, the clients can turn to someone they know and trust to help on this major financial decision. Which form of communication should the agent used?

A competitor launches a new product that reduces your revenues, what type of risk would this fall under?

Business risk

If you are opening a new business and want to know more about potential competitors in that area, which resource would be useful for you?

Chamber of commerce

Which component of a business plan addresses a company's understanding of why that business would succeed in specific marketplace?

Competitive analysis

What category on a balance sheet does inventory fall under?

Current Assests

Inventory Manufacturing Equipment Bank revolving line of credit 20 year loan on company property

Current Assets Long-Term Assets Current Liabilities Long-Term Liabilities

A cabinetmaker is seeking new customers for a business that makes expensive cabinets, The cabinetmaker has identified a group of potential customers with high incomes.Which method of segmentation is the owner using?

Demographic

What are two traits of successful entrepreneurs?

Determined and proactive

A landscaper owns a successful local business that provides lawn care services. The owner wants to enhance the sustainability and longevity of the company. What should the owner do?

Develop off-season services and secure a long-term credit line

A fitness trainer is assessing a business strategy in a neighborhood whose residents are mainly single, recent college graduates. The trainer would like to target local businesses in the neighborhood to acquire new customers.Which group should be targeted at these local businesses?

Employees who work at them

A dietitian decides to start a cruise vacation business for those looking to learn how to live a healthier lifestyle. The cruise will offer seminars with materials on healthy eating and exercise, and all of the food on the cruise will be healthy alternatives.Classify each expense as fixed or variable. EXERCISE AND DIET BOOKS

FIXED

A janitorial service provider is reviewing requests for its services.Which potential new customer will generate the highest gross revenue over the next year?

Fitness gym that pays $500 monthly

A dietitian decides to start a cruise vacation business for those looking to learn how to live a healthier lifestyle. The cruise will offer seminars with materials on healthy eating and exercise, and all of the food on the cruise will be healthy alternatives.Classify each expense as fixed or variable. SHIP RENTAL

Fixed

A successful fitness trainer has decided to open a health club. The trainer's business plan includes an organizational chart with three levels of employees 1.) top management , 2.) department heads, and 3.) front - line employees. What are some of the expected roles for the health club's front- line employees?

Getting guests and training clients

What is a drawback of a public corporation?

Greater financial reporting obligation

Which of the following is an example of front line employees at a health fitness club?

Greets customers

First Second Third Last

Identify the skills needed Write the job profile Post the advertisement Review qualifications of applicants

A barber shop records all costs of operating the business in two expense categories. The first category is cost of goods sold and the second is overhead. For the past six months, the shop has shown a loss at the gross profit level. How can the owner improve the prospects of making a profit?

Increase price charged for a service and decrease cost of supplies

A cabinetmaker has noticed that sales volumes for two different product lines have changed during the recession. The sales volume for the less expensive line of restored cabinets, has increased by 20%; while the sales volume for the more expensive line of new cabinets, has decreased by 30%. The restored cabinets sell for 30% less than the new cabinets, but the cost to purchase, transport, and refinish the restored cabinets is 25% less than the cost of new cabinets.What should the cabinetmaker do to improve business?

Increase the production of restored cabinets

Which exit strategy is used when a clothing manufacturing company sells shares of stock to the public?

Initial public offering

Gerry wants to open a florist shop in a vacant building in a downtown shopping area. Gerry needs to determine whether there is sufficient demand for a florist shop.Which two questions should Gerry ask?

Is there a dependable supply chain? How much foot traffic is there in the neighborhood?

Which three key values does a business plan provide?

It helps determine business viability

Which factor is NOT a characteristic to the owner of a sole proprietorship?

Job termination

What is a drawback of buying a franchise?

Lack of flexibility to change marketing or operating policies based on local conditions

The owners of a new daycare company were told by a banker and a business consultant that they need to grow the business during the first year. The owners research the Small Business Administration website to learn more about business planning and goal setting. The owners want to determine whether or not their business is creating a sustainable foundation for future success. Which business results should the owners track?

Number of children enrolled, total monthly revenues, and customer satisfaction ratings

How can I reach price conscious consumers?

Offer coupons

Which of the following is an example of geographic segmentation?

Owners of homes in newly built neighborhoods

Which of the following is an example of psychographics segmentation?

Owners of homes who view their landscaping as their creative personalitiy

A beautician develops a tool for applying hair dye more efficiently.Which legal form of protection should the beautician apply for to protect this intellectual property?

Patent

What is considered to be the primary risk for an entrepreneur who is launching a start-up company?

Personal Financial insecurity

What is a comm drawback of an existing business?

Potential for being misled on viability

What is a consequence for a real estate agent who violates confidentiality by discussing the client's personal income after work at a party?

Probable loss of current and future clients

A fitness trainer is presenting a business plan for a new studio to investors. The trainer envisions a studio with equipment and features that will meet the needs of customers with a variety of personal and work schedules. What studio feature would appeal to customers with demanding schedules?

Providing 24 hour member access

A landscaper believes that if a value proposition can be identified that makes the business stand out, the business will grow. Which three strategies are considered potential value proposition to customers of a new business

Providing extended hours Establishing online interactive scheduling offering free consultation

A child daycare center needs to identify a value proposition that will help parents feel secure about using their services. Which two initiatives meets this objective?

Providing live web cams parents can access from the Internet by using a secure logon

A new auto repair shop has introduced a new technology that will save consumers money, the owner hopes the change is newsworthy so the local media will report it to the public. Which type of promotion is that?

Publicity

A hair salon is trying to determine how to tell if it is successful or not and has decided it will be successful when it starts to make a profit.Which milestone will indicate this?

Reached break- even point

The chef of a fine dining restaurant has created several DVDs demonstrating how to prepare the restaurant's best- selling menu items. The chef wants to protect intellectual property rights for the videos.What action should the chef take?

Register the DVDs with the copyright office

A chef has created a menu specializing in items from one supplier. The owner of the restaurant is concerned about the effectiveness of the supply chain associated with this menu. What is the concern of the owner?

Reliability of supply

A chef has created a menu specializing in items that are available from only one supplier. The owner of the restaurant is concerned about the effectiveness of the supply chain associated with this menu.What is the concern of the owner?

Reliability of supply

What is one impact that a company might experience as a result of an ethical violation?

Reputation damage and significant loss of customers' trust

Which is one impact that an entrepreneur might experience as a result of an ethical violation

Reputation damage and significant loss of customers' trust

A janitor provides evening cleaning services to local businesses and wants to expand his business to provide services to homeowners. The janitor holds an open house to allow neighbors to share concerns they may have about using housecleaning services. Homeowners say they are concerned with having strangers in their homes and with whether the cleaners would be comfortable working around children. What should his next step be?

Require his staff to undergo extensive background checks

Which business risk occurs when an owner prices products incorrectly?

Risk of financial failure

A personal trainer recently established a personal training company in an underserved urban community and has been having difficulties securing financial support from banks.Which resource should the personal trainer utilize to secure funding for his business venture?

SBA

What is an example of management buyout?

Selling the business to an external management group

An individual owns a dog grooming business and must pay self- employment tax on individual earnings. Which type of legal structure makes self- employment tax a relevant concern?

Sole proprietorship

What is a drawback of equity funding?

The entrepreneur must share profits with other equity investors

What is a drawback of equity funding?

The entrepreneur must share profits with other equity investors.

A real estate broker is applying for two loans at the bank. The first one is to purchase an office building. The second one is to provide operating cash to pay utilities and office staff until some receivables are collected.Why would a bank be more inclined to approve the first loan but not the second?

The office building loan would have the building loan would have the building as a collateral but the operating loan has no collateral

Benefits administration

The owner of a growing landscaping company with 30 employees has decided to outsource the payroll and payroll-related functions of the business. Which responsibility would be in this outsourcing?

A professional wood worker that makes custom cabinets has decided to offer credit to customers with a credit card. Why would the wood worker have to raise prices after this decision?

To offer any relevant processing fees

What is a drawback of a sole proprietorship?

Unlimited personal liability

A dietitian decides to start a cruise vacation business for those looking to learn how to live a healthier lifestyle. The cruise will offer seminars with materials on healthy eating and exercise, and all of the food on the cruise will be healthy alternatives.Classify each expense as fixed or variable. FOOD

VARIABLE

Easier to finance a business purchase than a business start-up

What is a key benefit of buying an existing small business versus launching a start-up?

Personal Financial Insecurity

What is considered to be primary risk for an entrepreneur who is launching a start-up company?

Probable loss of current and future clients

Whats is a consequence for a real estate agent who violates confidentiality by discussing the client's personal income after work at a party?

Investors do not earn a return (dividends or increased stock price) if the business does not make a profit

When entrepreneur convinces outside investors to contribute equity to the new venture, which is true?

A travel agent wants to hire a new information technology manager for a fast-growing startup. The company is two years old, and the ITM is a salaried position that oversees all technology operations.Which factor could prevent the hire?

Whether the business can afford to pay the salary of the ITM

Determined, Proactive

Which are two traits of successful entrepreneurs?

Shipping costs

Which expense is variable?

They believe they will have more success with a proven concept

Why do some entrepreneurs choose to purchase franchises rather than launch their own start-up?

An entrepreneur opened a business and has sufficient money to move to a new neighborhood. which requirement will eliminate a location from consideration?

Zoning

Which of the following best defines self-motivation?

ability to start and finish a task without giving up despite obstacles that might arise

Which is an entrepreneur?

an adult who started cutting grass as a pre-teen and now runs a gardening business with a sibling

Characteristics of successful entrepreneurs include:

optimism

A new auto repair shop has introduced technology that is better at diagnosing malfunctions and will save consumers money. The owner hopes the change is newsworthy so the local media will report it to the public. Which type of promotional tool is the owner hoping to use?

publicity

Which expense is a variable?

shipping cost

A fitness trainer in the downtown area of a major city is trying to attract Millennials by offering extended hours in the evening. The owner has a limited promotional budget. What is an efficient way to reach these customers?

social media

What is a characteristic of an entrepreneur?

tenacious

A dietitian decides to start a cruise vacation business for those looking to learn how to live a healthier lifestyle. The cruise will offer seminars with materials on healthy eating and exercise, and all of the food on the cruise will be healthy alternatives.Classify each expense as fixed or variable. CREW MEMBER SALARIES

variable