Easy
The owner of a car-detailing business wants to develop a reputation for customer service. The owner is developing policies and procedures to guide the staff in
this effort.
Which documented procedure covers the area of customer service?
Staff background checks
Courtesy pickup and return
Operating hours
Customer complaints
Customer complaints
Based upon the education and skills gained from years of vocational training as an auto mechanic, as well as having grown up in a family of entrepreneurs, a
young adult decides to open an auto mechanic shop. The facility will provide standard services, such as oil changes, repairs, inspections, and warranty work for
company rental fleets, leasing companies, and auto dealers.
Which customer group will this new auto mechanic business support?
Local governments
Individuals
Businesses
All types of consumers
Businesses
Which of the following should be addressed in the description section of a business plan?
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Code of ethics
List of competitors
Names of possible employees and their skills
Target markets
Target markets
A farmer providing custom farming and tractor services averages $1,000 per day in revenue with a gross profit margin of 40%. The farmer needs to earn $4,000 in
gross margin per month to break even. Through experience, he finds that 50% of his active prospects buy within 30 days.
How many prospects should the farmer have in their active clients listing at all times at a minimum?
20
The scenario states the farmer averages $1,000 per day with a gross profit margin of 40%.
$1,000 x .40 = $400 gross profit per day
He must make $4,000 per month to break even.
$4,000 divided by $400 per day = 10 days per month
Ten days of work are required each month to break even. If only 50% (1/2) of active prospects hire his services each month, then it will require twice as many
prospects to assure 10 days of work.
2x 10 = 20 prospects
The landscaper must have a minimum of 16 prospects in his pipeline at all times to break even each month.
The owner of a used car sales business is analyzing the cash flow for his business for the prior year. In January, the opening inventory balance of automobiles was
$208,000. A total of 350 cars were added during the year at an average price of $4,000 each, $1,508,000 worth of these cars were sold to customers by the final
day of December.
What is the ending inventory value?
$100,000
To calculate the answer:
$208,000 (starting inventory)
350 cars added x $4,000 per car = $1,400,000 (inventory purchased)
$208,000 (starting inventory) + $1,400,000 (inventory purchased) = $1,608,000 (total inventory)
$1,608,000 (total inventory) - $1,508,000 (inventory sold) = $100,000 (ending value)
After a self-assessment, a potential entrepreneur has learned that she has a very low risk tolerance. Based upon this finding, which approach might be less stressful,
for the entrepreneur to have her own business?
-Go get a job and work for someone else.
-Buy a franchise for a well-known brand not yet in the community and market it well to attract customers.
-Start the business from scratch, so it can be built exactly as desired.
-Buy an existing business that is already successful.
-Buy an existing business that is already successful.
A child daycare center needs to identify a value proposition that will help parents feel secure about using their services.
Which two initiatives meets this objective? (Choose two.)
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Providing parents access to the activity schedule
Offering free snacks to the children
Responding to email inquiries within 24 hours.
Offering a list of references from other parents
Providing live web cams parents can access from the Internet by using a secure logon.
Offering a list of references from other parents
Providing live web cams parents can access from the Internet by using a secure logon.
The owner of a mobile food truck plans to sell tacos, hamburgers, and other foods to employees in a large office complex. Before opening his business, the owner
will most likely need to obtain which of the following documents from each employee to verify they have completed a course in food handling safety?
Pass
Certificate
License
Zoning variance
Certificate
A software development consultant works with several clients. Some of the clients are competitors. What is a consequence if the consultant violates confidentiality
by discussing a client's project with another client?
Monetary fines imposed by the local government (&
Increased revenue
Loss of clients and possible lawsuit
Forfeiture of sales commissions
Loss of clients and possible lawsuit
A mechanic just graduated from motorcycle repair school and wants to start a business because there is a lack of motorcycle repair shops in the local town. The
mechanic has raised $80,000 to start a business, but has no business experience and little professional experience in motorcycle repairs. The mechanic has
repaired his own motorcycles for five years plus two years repairing motorcycles at school. Upon graduation, the mechanic received industry certifications
qualifying him to repair most brands of motorcycle engines.
When 100 potential customers were surveyed, they provided the following responses:
• 10% do their own motorcycle repairs
• 70% desire diagnostics using modern technology tools
40% have repairs done by a generic motorcycle dealership
• 50% take their motorcycle to an automotive mechanic
A
The customers reported that they currently spend the following amounts for motorcycle repairs
• $100 or less on parts when doing their own repairs
• $100-$300 for repairs done by an automotive mechanic
• $200-$500 for repairs at a dealership
Given the facts provided, which opportunity would be the best choice for the motorcycle mechanic to open a business?
Open a motorcycle parts store and invest $60,000 in inventory
Buy a motorcycle dealership franchise for $200,000
Start a new business and invest $50,000 in modern diagnostic tools
Buy an existing automotive repair business for $50,000
Open a motorcycle parts store and invest $60,000 in inventory
Which are three risks of entrepreneurship? (Choose three)
Financial insecurity
Potential business failure
Long Hours
No control over work location
Isolation from meeting people
Financial insecurity
Potential business failure
Long Hours
The owner of a pet daycare is presenting a plan to investors to expand the facility and promises the center will meet the needs of customers with a variety of
schedules.
What is a legitimate value proposition for potential customers?
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Developing interactive website for customers
Providing extended hours to pickup and drop off pets before and after work
Providing a variety of organic pet foods during their stay
Adding live web cams so customers can view their pets from work
Providing extended hours to pickup and drop off pets before and after work
A carpenter wants to start his own business building custom cabinets. Unfortunately, he has no business training and needs assistance writing a business plan,
finding funding, and obtaining general advice.
Which agency should the carpenter utilize?
USDA
HUD
SBA
SCORE
SBA
The Small Business Administration (BA) is the federal agency assigned to aid, counsel, assist and protect the interests of small business concerns. The SBA
provides several resources to small business owners. The three primary are the following:
Learning Center - contains online courses, booklets, templates, and other materials designed to assist business owners.
Loans and Grants - SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing
needs, including debt financing, surety bonds, and equity financing.
SCORE - a nonprofit association comprised of volunteer counselors, advisors, and mentors who offer free counseling and mentoring to small business owners.
An entrepieneur was building a website for a new dog grooming business. Through internet searches, the entrepreneur found many pictures to use on the new
business's website. A few months later, the entrepreneur received a letter from a law firm for using these images.
Which type of intellectual property protection is at issue in this example?
Copyright
Trademark
Patent
Service Mark
Copyright
An individual starts a babysitting business with a loan of $1,000. The loan is for 2 years at a 5% COMPOUND interest rate.
How much will the individual owe by the end of the loan assuming nothing is paid until the end of the 2 year term (future value of lotin)?
$1.102.50
$1.050.00
$1,100.00
$1,100.50
$1.102.50
COMPOUND interest means you must pay interest on the interest accrued each year. This is the most common form of interest and is used by credit card
companies, banks, and other types of investors when providing loans. The amount of a 5 year loan of $1,000 at a 5% annual interest rate grows as follows:
End of year 1: $1,000.00 x 05 = $ 50.00; $1,000 + 50.00 = $1-050.00
End of year 2: $1,050.00 x .05 = $ 52.50; $1,050 + 52.50 = $1,102.50
End of year 3: $1,102.50 x 05 = $ 55.13; $1,102.50 + 55.13 = $1,157.63
End of year 4: $1,157.63 x ,05 - $ 57,88; $1,157.63 + 57.88 = $1,215.51
End of year 5: $1,215.51 x05 - $ 60,78; $1,215,51 + 60.78 - $1,276.29
Assuming the babysitter pays nothing on the principle of the loan until the end of the 2 years, the total amount owed would be $ 1,102 50.
What is a primary benefit of starting a new business without purchasing a franchise or buying an existing business?
Applying your own experience
Less record keeping
Lower financial risk
Developing your own rules
Developing your own rules
Which two groups benefit most from a well-written business plan? (Choose two)
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Suppliers
Business owners
Potential customers
Investors
Distributors
Investors
A successful software trainer has decided to open a corporate training business. The software trainer is putting together an organizational chart and assessing
what job roles will be needed. It has been determined that there will be four levels of employees in the organizational chart.
What are some of the expected roles of those employees on the highest level of the organizational chart?
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Providing classroom training to corporate clients
Providing administrative support
Marketing and selling training to corporate clients
Developing succession plans and building a board of advisors
Developing succession plans and building a board of advisors
The partners of an awning repair shop are assessing the amount of money needed to start a business at a new location. The partners have calculated that the
business will generate more than enough revenue to cover monthly expenses after its second month in operation.
Start-up expenses are estimated as:
Equipment lease (monthly): $3,000
Materials and supplies (monthly): $20,000
Licensing (annual but must be paid upfront in a lump sum): $200
Payroll (monthly): $12,000
Advertising (monthly): $1,000
Operating expenses (monthly insurance, utilities and rent): $2,000
One-time Security Deposit for electricity: $1,000
Contingency (to cover 10% of start-up investment)
What is the amount of start-up capital the partners will need to open the new awning repair business?
00 O C
$32,120
$85 920
$84,920
$29,200
$84,920
Here is how to calculate the amount of start-up capital required to open the business in this scenario:
Equipment lease is $3,000 x2 months = $6,000 Materials and supplies is $20,000 x2 months = $40,000 Licensing is $200 Payroll is $12,000 x2 months =
$24,000 Advertising is $1,000 x2 months = $2,000 Operating Expenses is $2,000x 2 months = $4,000 Security deposit = $1,000
Sub-Total = $77,200 $77,200 x 10% = $7,720 Start-up Capital needed is $77,200 + 7,720 = $84,920