business exam 1

• what is entrepreneurship?

  setting up a business with the aim to make a profit.
• b2b and b2c

  b2b- wholesaling flooring distributor, purchases requiring b2c- chain of local grocery stores, motorcycle repair shop
• you need to create a structure for your small business but don't want to be taxed twice. you have four partners, don't plan on selling your ownership shares to the public, but want to be protected from business liabilities. what legal structure do you set up?

  s-corporation.
• owners of equity in a business

  true- a partner owns equity, founders own equity

  false-all stakeholders own equity, contractors own equity.
• an example of __ compensation is paying field laborers for the amount of fruit they pick.

  piece work
• A ___ employee receives a set amount of pay each month without overtime compensation for extra hours worked.

  salary
• Employees most affected by minimum wage laws are compensated ___

  hourly
• an employee who is paid a percentage of a sale is paid by ___

  commision
• business life cycle

  stage 1- existence

  stage 2- survival of the fittest

  stage 3- success

  stage 4- take-off

  stage 5- maturity
• element of the design thinking process

  empathize- research your users' needs

  define- state your users' needs and problems

  ideate- challenge assumptions and create ideas

  prototype- create solutions

  test- try your solutions
• successful entrepreneurs typically possess which three characteristic traits?

  responsible, adaptable, tenacious
• which is one of the greatest benefits of being an entrepreneur?

  schedule control.
• which three characteristics help identify a business opportunity?

  service, price, quality.
• the owner of a landscaping business has noticed that none of his competitors are including ponds or other water features in the gardens they create. The landscaper wants to determine the viability of this business opportunity. what should they do first?


  ask the customers in the area if they are interested in adding a water feature to their gardens.
• which two documents summarize the business plan of a company?

  lean canvas and pitch deck.
• components of a business plan

  10-100 pages

  highly text-based

  used to get investor buy-in
• components of a pitch deck

  10-20 slides

  highly visual

  used to get investors attention
• which three elements are required to have a trade secret?


  * subject to reasonable efforts to maintain its secrecy

  * others cannot legitimately obtain the information

  * information has economic value not generally known
• match each creative common license type to its usage license

  CC- identifies it is a Creative Commons license

  BY- credit must be given to the creator

  SA- adaptations must be shared under the same terms

  NC- only noncommercial uses of the work are permitted

  ND- no derivatives or adaptations of the work are permitted
• what is a target market?

  customers to whom a company wants to sell its products and services.
• primary and secondary data

  primary-

  a marketing survey you posted on Facebook

  information collected from your company focus group

  secondary-

  demographic data you obtained from the government

  facts you collected from professional journal articles
• direct competition


  a company that offers the same thing you offer
• indirect competition


  -A business whose services are different than your but satisfy the same need.

  -When your target audience buys products from a competitor instead of from you yours
• which two are offline marketing platforms?

  TV ads and flyers and pamphlets.
• a hair salon acquired 100 new customers last year.

  *marketing costs- 1,000

  *sales costs- 10,000

  *salaries- 96,000

  what was the customer acquisition cost?

  110
• to calculate customer acquisition cost, divide all costs spent on acquiring more customers (marketing expenses and sales costs) by the number of customers acquired.

  $1,000 marketing cost + $10,000sales cost/100 customers= $110 per customer
• which three are segments in a marketing plan?

  demographic, behavioral, geographic.
• what's true and false about the sales process?

  true-

  *prospecting is usually the first step in the sales process

  *determining if the potential customer can afford your product is part of prospecting

  *handling objections involves listening to the potential customer's concerns and addressing them

  false-

  *closing the deal is the last and final element in the sales process

  *presentation is best done with a power point slide deck
• which sales channel has been open to manufacturers because of digital tools?

  direct-to-consumer
• types of sales channel

  retail- selling products directly to end customers for a profit, either in-store, online, mail-order, or by phone

  wholesale- selling products in bulk to various outlets or retailers for onward sale

  direct-to-consumer- when a brand or manufacturer sells directly to consumers and the end user of their products, as opposed to selling to them solely through retailers

  B2B- businesses that sell to other businesses who are the intended end user of the product
• which two ways can customer service and support affect sales?

  * more sales through customer evangelists

  * increased sales through responsiveness and personalization
• which three statements help define a market/fit hypothesis

  * a fit exists when people need your product rather than just seeing a potential benefit of using it

  * product/market fit exists when you have the right solution to a problem worth solving

  * When users love your product so much they they tell other people to use it
• product quality control testing involves the following testing processes 


  * review the results of internal quality assurance testing

  * refine quality measures as needed to increase the level of satisfaction with your product

  * Establish the method to use for testing product quality

  * determine what standards have to be met based on the product and industry

  * product quality control testing should be established before sales to customers begin and ongoing after
• What are two characteristics of direct distribution that differ from fulfillment centers?

  * The manufacturer controls all aspects of distribution

  * direct distribution is also known as zero level channel
• to calculate equity, subtract total liabilities from total assets.

  $17,000 - $6,000 = $11,000 equity
• you operate a small insurance office with a partner.

  which expense is a fixed cost?

  property lease for the office
• Return on investment (ROI) is calculated as (total return - amount invested)/ amount invested
• which two should be included when calculating start-up costs for a business?

  * permits, licenses, and incorporation fees

  * business cards
• which two are benefits of equity funding?


  * can be used to raise working capital

  *investors do not get paid if the business does not make a profit
• requirements about equity and debt financing

  * debt financing requires borrowing money whereas equity financing requires selling a portion of the company

  * the main advantage of equity financing is that there is no obligation to repay the money acquired

  * equity financing places no additional financial burden on the company

  * creditors look favorably upon a relatively low debt-to-equity ratio, which benefits the company if it needs to access additional debt financing in the future