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