Business Final

Question 1

Components of a Profitable Business

Answer 1

1. tell the world
2. Fill a need
3. Be profitable

Question 2

Covey’s 7 Habits

Answer 2

1. Be proactive
2. Start with end in mind
3. Put first things first
4. Think win-win
5. Understand before being understood
6. Synergize
7. Sharpen the saw

Question 3

Business Plan Components

Answer 3

1. Cover Sheet
2. Table of Contents
3. Executive summary/purpose statement
4. Description of business
5. Financial Section

Question 4

Types of research

Answer 4

1. Primary Research
   - Directly getting information
2. Secondary Research
   - Reading already conducted research
3. New-Eyes Research
   - Watch TC in natural habitat

Question 5

Environmental Trends

Answer 5

1. Socio-Cultural
2. Economic
3. Technological
4. People
5. International
6. Competition

Question 6

Trends for Small Business

Answer 6

1. Globalization
2. Technological
3. Splintering Mass Market
4. Boomers

Question 7

Market Segmentation

Answer 7

Break market down as much as possible. Gaps = opportunities. Multiple Gaps = New TC

Question 8

Life-Cycle Stages

Answer 8

1. Embryo
2. Growth
3. Maturity
4. Decline

Question 9

Goal vs. Objective

Answer 9

Goal = Desired result (broad)
Objective = Measurable steps to achieve goal (SMART)
Specific Measurable Action Realistic Time

Question 10

Sole-Proprietorship

Answer 10

1 person
- Flexible paperwork
- Losses deducted from income
- Owner can be help liable
- Revenue taxed as personal
- Restrictions to raising capital

Question 11

Partnership

Answer 11

2+ people (General + Limited)
- Easy Startup
- Few Legal Requirements
- Shared risk
- Limited taxes
- Partners personally liable
- Difficulty in decision making

Question 12

Corporation

Answer 12

Owners + Business = Separate
- Limited liability
- Tax advantages
- Fewer tax right-offs
- Incr. start-up costs
- Incr. paperwork

Question 13

Cooperative

Answer 13

Owners = Users
- Limited Liability
- Easy to get capital
- Owners are motivated
- Difficulty agreement
- Difficulty external financing
- Management conflicts

Question 14

Patent

Answer 14

Invention

Question 15

Copyright

Answer 15

Creative work

Question 16

Trademark

Answer 16

Logo
(Ordinary, Certification, Distinguishing)

Question 17

Marketing Strategy (ETPM)

Answer 17

1. External Trends
2. Target Market
3. Product uniqueness
4. Marketing Mix

Question 18

Types of Primary Research

Answer 18

1. Mentoring
2. Experience
3. Networking
4. Brainstorming
5. Competitors

Question 19

Types of Competition

Answer 19

1. (1st Level) Direct
   - Same product
2. (2nd Level) Indirect
   - Same benefit
3. Invisible
   - Desire for same product/benefit

Question 20

Current Ratio

Answer 20

Current Assets/Current Liabilities

Question 21

Quick Ratio

Answer 21

Most Liquid Assets/Current Liabilities

Question 22

Proprietorship Ratio

Answer 22

Owners Investment/Total Assets

Question 23

Equity-to-debt Ratio

Answer 23

Total Liabilities/Owners Equity

Question 24

Franchise Format

Answer 24

1. Business Relationship
   - Everything highly controlled
2. Dealer Relationship
   - Buy’s rights

Question 25

Franchise Networks

Answer 25

1. Direct Franchising
   - Franchisee deals directly with Franchisor
2. Master Franchising
   - Franchisor sells rights to an area
   - Franchisee must sell specific number of franchises in that area in a specific time