Entrepreneurship Test Chapters 3 and 4

Customer management

A company's efforts to understand customers as individuals instead of as a part of a group

Customer profile

A description of the characteristics of the person or company that is likely to purchase a product or service

SCORE

A non-profit association made up of working and retired business professionals who volunteer their time to provide small businesses and entrepreneurs with free real- world advice and know- how

Focus group

An in-depth interview with a group of target customers who provide valuable ideas on products or services

Why should entrepreneurs analyze both direct and indirect competitors?

Analyzing the strengths and weaknesses of your competition will help you identify opportunities and threats against your business

Which of the following organizations can provide assistance when writing your business plan?

Bank, chamber of commerce, and SBA

Which of the following is not a good way to get customer feedback?

Check with you competition

Direct composition

Comes from a business that makes most of its market as other businesses

Which of the following is not a step involved when preparing a competitive analysis?

Create a customer profile

Sources of secondary data include all of the following except?

Customer feedback from survey

Which of the following is not a reason that entrepreneurs need to know who their customers are?

Customers have no influence on product or services offered

Secondary data

Data found in already-published sources

Demographics

Data that describe a group of people in terms of their age, marital status, family size, ethnicity, gender, profession, education, and income

Psychographics

Data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle habits

(T/F) Businesses do not need to identify their target market in order to succeed?

False

(T/F) Longer questionnaires are always better because you can collect more information?

False

The main body of a business plan includes which of the following?

Financial Statement

Data that helps you determine where your potential customers live and how far they will travel to do business with you are?

Geographic data

Short-term goals examples

Hire employees and advertise

Medium-term goals examples

Increase customer base and find investors

Primary data

Information collected or the very first time to fit a specific purpose is

What are limitations of market research?

It can be expensive and time-consuming

Purposes of a business plan are

It explains your idea for a product or service, it sets objectives and describes how they will be achieved, and it describes the backgrounds and experience of the people who will run the business.

A business plan is important for all of the following reasons except

It guarantees you will get financing for your business.

It is difficult for small businesses to compete with large retailers because

Large retailers usually are able to keep larger quantities of products in stock, large retail chains do not rely on a single product line, and large companies usually have more resources to devote to advertising

Which of the following is a strategy for maintaining customer loyalty?

Offering superior service

Long-term goals examples

Open more locations

Which of the following is not a true statement regarding risks?

Potential investors and lenders want to know the risks your business faces and how you plan to deal with them.

The purpose of including supporting documents in a business plan is to

Provide additional information

Writing a business plan

Requires patience, research, thought, and time

Which of the following is not an example of primary research?

Statistics from a government web site

Why is the quality of a business plan important?

The quality of a business plan is critical to an entrepreneur's success because it makes you think about all aspects of your business, help you secure financing and communicate your ideas to others. Determines your success

(T/F) Two disadvantages of collecting primary data are the costs and time involved

True

Mistakes to avoid when preparing a business plan include all of the following except

Wasting time on research

Why is it important to define the question you want your market research to answer?

You define the question that will be the focus of the research. If it is not well defined, you will waste time and money

Statement of purpose

a brief explanation of why you are asking for a loan and what you plan to do with the money

Pro forma financial statement

a financial statement based on projected revenues and expenses

Cover letter

a letter that introduces and explains an accompanying document or set of documents

Executive summary

a short restatement of the report

Business plan

a written document that describes all the steps necessary for opening and operating a successful business

Exit strategy

an entrepreneur's plan for extracting his or her money from a business after it is operating successfully

Small Business Administration (SBA)

an independent agency of the federal government that was created to help Americans start, build, and grow businesses

What is an executive summary?

is written after the main body because you can pick out the most important and persuasive points to outline your executive summary. The executive summary has the purpose of capturing the reader's interest making it more important than the main body

How are market segments useful to an entrepreneur?

it can help develop a product or service that will meet specific customer needs and wants

To identify your target market, you need to know.

who your customers are, how old your customers are and where your potential customers currently shop

A business plan is not intended for

your competition