Whose Business is it?
This owner keeps complete control of the business but also puts personal assets at risk for its debts.
sole proprietor
A business uses this short statement of its purpose and whom it serves to help decide which opportunities to pursue.
mission statement
A bakery wants to appear when someone searches “custom birthday cakes near me.” Improving its unpaid search visibility is the purpose of this practice.
SEO (search engine optimization)
A pop-up shop makes $600 in sales from 20 customers. This is the average revenue per customer.
$30
Total sales/Number of customers = Average revenue per customer
A coffee shop wants to protect the distinctive name customers use to identify its business. This form of intellectual property protection applies.
Trademark
In an LLC, the owners go by this name.
members
A repair business competes through specialized expertise that customers value enough to choose it over cheaper alternatives. This is its competitive approach.
differentiation
Customers will pay more for a service because it saves them hours of work. Setting the price around that perceived benefit uses this pricing approach.
value-based pricing
A campaign costs $180 and brings in 12 new paying customers. This is its customer acquisition cost.
$15 per customer
Campaign spending/New paying customers gained = Customer acquisition cost
A business creates an original advertising jingle. This form of intellectual property protection covers the creative work.
copyright
Two partners disagree about how much money each can withdraw. Ideally, they already addressed that issue in this document.
Partnership agreement
A cleaning company groups nearby appointments together to reduce travel time and fuel expenses. Those operating choices support this competitive approach.
low-cost strategy
A vintage shop takes in $500 during a pop-up. Before subtracting any expenses, that $500 represents this.
revenue
A service sells for $80 and costs $50 per job to deliver. This amount remains toward overhead and profit before subtracting customer acquisition spending.
$30
Price charged − Cost to deliver the product or service = Amount left toward overhead and profit
An entrepreneur develops a new mechanical invention and seeks protection against others making or using the covered invention. This form of protection applies.
patent
In a limited partnership, this partner manages the business and carries unlimited personal liability.
general partner
A travel service builds its entire offering around the needs of families traveling to youth sports tournaments. Concentrating on this particular customer group makes its strategy this.
focused strategy
A campaign generates 800 views, 40 likes, and eight new paying customers. To calculate customer acquisition cost, campaign spending should be divided by this number.
8
A business charges $90 per job, spends $55 delivering it, and spends $20 acquiring the customer. This amount remains toward overhead and profit from that first job.
$15
Price charged − Cost to deliver − Customer acquisition cost = Amount left toward overhead and profit
A shop owner plans to spend thousands renovating a rented storefront. Before investing, the owner wants the lease to specify whether they can stay after the original term ends. This lease provision addresses that concern.
renewal option
A founder wants experienced businesspeople to offer guidance without giving them formal governing authority. This type of board fits that purpose.
Board of advisors
A business charges $40 per service and spends $30 delivering it. If it cuts its price to $35 without reducing costs, it must multiply its sales volume by this number to leave the same total amount toward fixed costs and profit.
2
A business budgets $120 for promotion. If it attracts only four new paying customers instead of the expected eight, its customer acquisition cost increases from $15 to this amount.
$30 per customer
A campaign costs $240. The lower estimate is 8 new paying customers, and the higher estimate is 16. These are the two resulting customer acquisition costs.
$30 in the lower estimate & $15 in the higher estimate
Campaign spending/Lower customer estimate = Higher acquisition cost
Campaign spending/Higher customer estimate = Lower acquisition cost
After a covered loss, an insurance payment reflects the damaged equipment’s age and depreciation. This valuation method explains why the payment may fall short of buying comparable new equipment.
actual cash value