Entrepreneurial and Small Business Concepts
In general, which two characteristics define a "small business?
-Fewer than 1,500 employees
-Less than $35.5 million in revenue
What are surveys and focus group discussions examples of?
Primary Data
A barber charges $20 per haircut. The total cost of running his home-based business is $4,000 per month, which includes his salary of $3,000 per month. The minimum # of haircuts he must do to cover all of these expenses and his salary is 200 per month.
The barber wants to increase his salary to $4,000 per month, making his total monthly expenses $5,000. What is the minimum price he must charge for each of the 200 haircuts so he can cover this increased salary?
$25
(Total monthly costs of $5,000 divided by 200 haircuts = $25 per haircut)
A bakery has developed a new artisan bread. The staff is giving away taste samples to customers as they enter the store.
What are two criteria the bakery can use to determine the quality of their new product?
Observe customer reactions while they taste the product and measure sales of the new bread after customers have sampled it.
The highest-ranking employee in the company; reports to the board of directors.
CEO
Classify each of the following businesses as either Physical or Digital.
-Bakery in your community
-Online store that dropships camping gear
-Bookstore on Amazon that sells eBooks
-Hair salon that makes appointments online
Physical:
Bakery and Hair salon
Digital:
Online store and Bookstore on Amazon
Three online marketing platforms
social media, email, and google ads
What type of expense are hourly wages for an office employee?
Variable cost
One of the first steps must do before offering a new service
identify the knowledge required
Develops policies and structures to protect company data.
CIO
You need to create a legal structure for your small business. You have plans for it to grow and hope in the future to sell shares to the public. Your startup partners are citizens of Mexico and Japan. you do not want to be personally responsible for business liabilities.
Which legal structure should you set up for your business?
C-Corporation
You have opened a for-profit adult technical school and you want to advertise it to potential students throughout your state.
What would be a good marketing method?
Local Television Ad
-Initail cash blance: $1,500
-Project revenue based on existing clients: $2,500
-Gas: $100
-Equipment maintenance fees: $300
-Truck payment: $400
-Payroll: $400
-Insurance: $120
What is your projected ending cash balance for the month?
$80
([Initial Cash Balance + Projected Revence] - Projected Expenses = Projected Cash Balance
Here your Initial Cash Balance is $1,500, your Projected Revenue is $2,500, and your Projected Expenses are $3,920
So, 1,500 + 2,500 is 4,000
4,000 - 3,920 is 80
which leaves you with an ending cash balance being $80
You create a new strategy for lawncare services that involves assessing law health, applying the correct herbicides and pesticides, and other necessary solutions to quickly bring a lawn back to health.
What are three things you will need to consider regarding the mass delivery of your service?
-Finding a source of materials to support your service
-Training employees with the knowledge to consistently deliver the service
-Creating an effective demonstration of your service for potential customers
Oversees the day-to-day administrative functions of a business; second in command.
COO
You own a lawn care business. You have employees who work long hours laboring in good weather, often exceeding 40 hours per week. They also work short hours when the weather is bad, sometimes they can't work at all. You do all of the sales of your business.
Which two types of compensation would be appropriate for these landscape employees?
hourly and salary
-Sales Revenue Last Year = $350,000
-Sales Revenue Current Year = $402,500
What is the sales growth?
15%
(To calculate sales growth, subtract sales revenue for the last year from the current year and divide that by sales revenue from the last year. Then multiply by 100 to get the sales growth percentage.)
What funding option does this sound like?
-often accept a lower return on investment compared to other sources of equity capital
-typically do not expect to be paid until the business begins making money
Angel Investors
Three things you must do to create and establish your Product Quality Control Process
-Review the results of internal quality assurance testing
-Establish a method to use for testing product quality
-Determine what standards have to be met based on the product and industry
Creates budgets, analyzes financial data, and forecasts company profits.
CFO
What is a characteristic of a successful entrepreneur mindset?
Doesn't give up easily
-# of customers at the start of the month = 100
-# of customers at the end of the month = 120
-new # of customers = 40
-the value of free dinners redeemed = $240
What was the Customer Retention Cost?
$3
(120 customers at the end of the month - 40 new customers = 80 retained customers.
$240 free dinners redeemed / 80 retained customers = $3 Customer retention cost)
Assets or Liabilities?
Which is Long-Term and which is Current?
-Bank Loans
-Mortgage Payments
Liabilities
Bank Loans are current
Mortgage Payments are long-term
Two characteristics of fulfillment centers that differ from direct distribution
-Warehousing is a primary role
-Fulfilment centers pack and ship for a manufacturer
One of the greatest risks of being an entrepreneur?
Financial instability