Entrepreneurship- Unit 3: How Do I Start a Business?

Donna is starting a fashion business. She is putting together a detailed list of her startup costs. Which are short-term startup costs? Select all that apply.

0.5 of 1 conference table and chairs stationery and shipping boxes business license and tax ID

Lorne needs to plan for all the startup costs for his fishing tackle shop. Which are long-term costs? Select all that apply.

0.5 of 1 inventory utilities website

Which are demographic characteristics to consider when identifying your target market? Select all that apply.

0.67 of 1 age income Try adding educational background

Which are possible outcomes of quality target market research? Select all that apply.

0.83 of 1 fewer customer complaints increased customer loyalty higher sales efficient use of resources

Swapna owns a small flower shop. Which is the best example of her business's purpose?

Bring a little joy into everyday life.

Which statement from a business plan states a problem commonly included in such a plan?

Consumers are looking for high-quality, low-cost solar energy solutions for their home, which are not available in the Detroit area.

Lesson 12

Creating a Business Plan Is Easy!

Which is the best reason to use differentiation in your business?

Differentiation can lead to higher sales and more repeat customers.

Why might an entrepreneur prefer to create a lean startup business plan over a traditional business plan?

It takes less time to create.

Lesson 11

It's Time to Expand

Julie is an attorney who is starting her own practice. She wants to calculate her short-term and long-term startup costs so she will be better prepared for this new venture. Which is a short-term expense?

Julie purchases a website domain name for her business

Lorrie has two dental practices in the city. She owns one of the buildings and rents the other building. Which answer illustrates her tax obligation on the buildings?

Lorrie owes property tax on the building she owns.

Which statements describe microloans? Select all that apply.

Microloans offer low interest and easy repayment plans. Microloans are short-term loans.

John's current business is in a high-income area with high rent and good visibility. It is located near his target customers. He is considering moving his business to an area farther away with a much lower rent. What is a possible disadvantage of moving his business to a location with low rent?

People living in the area might not be able to afford the product or service.

Which sentence defines return on investment (ROI)?

ROI is a measure of the benefit of an investment over the cost of the investment.

Which are characteristics of return on investment? Select all that apply.

Return on investment can be either a gain or a loss. Return on investment is calculated as a ratio or percentage.

Match each statement to the right answer.

Rose's Photography gives memories that last a lifetime.: purpose Hernandez Roofing repairs roofs for both homes and businesses.: mission People over profits.: core value

Sergey opens a fitness studio. Which is the best example of his business's mission?

We provide monthly fitness memberships to individuals.

Lesson 13

What's the problem?

When is a business most likely to hire a specialist?

XXX before it seeks out venture capital

Stormy's small restaurant has, in the past year, had a long wait for lunch almost every day. Stormy has an opportunity to expand her business because she has _[blank]_. Which word best completes the sentence?

XXX working capital

Darius has a frozen yogurt business in a food truck that is highly profitable and has plenty of working capital. It has a staff of three, including himself. Recently, he has noticed a big increase in sales. He has an opportunity to expand by moving into a retail location as well as keeping his food truck. Should Darius expand his business?

Yes, because he has working capital.

Which is a key component of any type of business plan?

a description of who the customers will be

Maria likes the idea of asking for startup money for her fashion business through crowdfunding. What is crowdfunding?

a funding source where a group of people donate money to a project or business but do not share in its ownership

After expanding her day care, Maria hires Teresa, who is skilled at bookkeeping, marketing, and teaching, as a full-time employee. Which best describes Teresa's position?

a generalist

Jacob sells custom-made promotional products to businesses through his website. He is happy with his current customer base, as most of his business is repeat and referral. He gets very few walk-ins or visits from customers and ships all products directly to them. Which describes the best location for Jacob's business?

a higher-cost, more visible location

Which are characteristics of a mission statement? Select all that apply.

a statement that clearly describes the business to those outside and inside the company a single sentence that describes what a business does and whom it serves

Jose wants to find a nontraditional source of capital to fund his startup. Which is the best option?

ask for money through crowdfunding

Which factors would prompt a business to expand? Select all that apply.

better branding new customers

How can a business differentiate itself from the competition? Select all that apply.

by providing a unique customer service experience by offering products that other businesses do not offer

Which of the following is money used to operate a business?

capital

Read the sentence. A _[blank]_ is used for business costs like working capital, equipment, and inventory, but not existing debts. Which best completes the sentence?

microloan

Cristina uses money from a traditional bank loan to open her styling salon. How is the money being utilized?

money as a source of capital

How does LUSH Cosmetics differentiate itself from other cosmetics companies? Select all that apply.

offers organic, handmade products from ethical sources provides a hands-on, customer-focused shopping experience

Harry owns a tutoring company that specializes in early reading tutoring. Which possible target markets for Harry's business reflect the best target market research?

parents of school students who are getting low grades in reading

Which are associated with identifying your target market? Select all that apply.

price of your product age of potential customers locations where product demand is high

Katie owns a small software company that provides educational technology to schools. Her competitors are focused on always having the newest models of devices available to students. Katie knows that her company cannot afford to compete based on product design because she has a small staff and limited budget. Which actions would be the best ways Katie could differentiate her business? Select all that apply.

providing a specialized customer experience selling at the lowest price ensuring that her product has the best quality

Which describes a component of a business plan that describes the ways in which a business will make money?

revenue streams

Which are typical components of a business plan? Select all that apply.

revenue streams mission statement

How does the Small Business Administration help small-business owners with funding?

It has a network of nonprofits that offer microloans.

A business has been around for many years and makes steady profits. The business owner has always planned for slow growth. Why would it be less likely to seek out venture capital?

It is already established with no plans for quick growth.

Why is identifying your target market important?

It is better to spend time and money marketing to the people who are most likely to be interested in your product.

Two business partners are comparing locations for their new restaurant. One wants the business to be in a busy strip mall with no outdoor space, while the other wants it to be in a building on a quiet street with land to allow for the possibility for dining on an outdoor patio. Which statement describes an advantage and a disadvantage to the location in the busy strip mall?

It provides high visibility but limits dining options for customers.

Which statement is likely to be included in a small business's core values? Select all that apply.

Expect the unexpected. Treat others as you want to be treated.

Lesson 14

It Takes a Bit of Detective Work

Why might small businesses seek venture capital?

It can help a small business grow quickly.

How is venture capital different from working capital?

It gives investors equity in the business.

Tasha decides that she wants to start a small business catering weddings. She will need to purchase commercial kitchen equipment for which she does not have money. Why is it important for Tasha to create a business plan?

She can show it to possible investors or lenders to get the funding she needs.

Rachel wants to take out a small startup loan without using a traditional bank or credit union. She wants a low interest rate and a quick turnaround time. Giving up controlling rights to her business, even partially, is not an option. Which is the best funding source for her needs?

She should utilize peer-to-peer lending.

Lesson 10

The Nuts and Bolts of Starting a Business

Which statements describe when a business might seek and receive venture capital? Select all that apply.

The business has plans to expand quickly. The business has the possibility to make large profits.

Brooklyn is searching for a location for her after-school tutoring program. She comes across a location that seems promising, but another highly successful tutoring business is located nearby. What conclusion can Brooklyn draw that can help her compare this location to other possible locations?

There are people who need tutoring who live in the area.

After a very successful first year at his printing company, Raj is ready to hire his first employee. Which employee would best fit Raj's needs?

Todd, who can run the machines and help with marketing and customer service

Michael wants to use money that has been donated online to his business to fund his T-shirt startup. Which best describes his source of capital?

crowdfunding

LUSH Cosmetics provides handmade organic cosmetics to customers in an inviting and friendly atmosphere. What are these characteristics examples of? Select all that apply.

differentiation unique products and services

Abdi and his brother own a small hardware store. They have 12 full- and part-time employees. What tax do they owe for the employees' wages?

employment tax

Leonard is considering opening a health and nutrition store in town. He is researching what obstacles might be in his way. Which of the following correctly states a barrier to raising capital for his new business?

having no credit history

Mason invented a medical device for a certain type of heart surgery. He is reviewing revenue statistics about hospitals that perform this heart surgery. Which is Mason most likely researching?

his target market

Jake just opened an auto parts store and is working on identifying the income, revenue, profit, and capital for his new business. Match each term with the correct example.

income: the money Jake takes home (his salary) from selling his auto parts revenue: the total amount of money Jake's business earns through selling auto parts before subtracting salaries, utilities, and other expenses profit: the amount of money Jake's business makes after subtracting costs from earnings capital: the money Jake got through a traditional loan and is using to operate his business

When a business first expands, it is a good idea to hire generalists because they can _[blank]_ of the business. Which phrase best completes the sentence?

take on many tasks

Which is the best resource for finding demographic data about your town?

the Small Business Administration website

If Javier is asking himself what his business does and whom it serves, what is Javier trying to determine?

the mission of his business

What is the definition of differentiation?

the process of distinguishing a product or service from others

Which is the best definition of the purpose of a business?

the why behind the business

Which describes the main goal of an investor?

to fund the costs related to the initial startup and make a profit

Which reason explains why it is important for a business owner to establish core values?

to help shape company culture

What is the purpose of differentiation?

to provide customers with a reason to purchase from one company over another

Janice is beginning an international shipping company and is seeking global investors. She will be sending information ahead and then traveling to various countries for face-to-face meetings with top investors. She is considering her options and comparing different types of business plans. Which is best for her to create?

traditional business plan