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Entrepreneurship and Small Business D1 Flashcards | StudBud
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Entrepreneurship and Small Business D1
Entrepreneurship and Small Business D1
179 terms
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Domain 1 entrepreneurship review
Flashcards
179 cards
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Questions
179
Answers
1
Which of the following is an advantage of buying office space?
Eventual ownership
No need to pay property taxes
Lower upfront costs
No property maintenance responsibilities
2
ROI is used to calculate the profitability of an investment relative to its cost
True
False
3
Which of the following financial ratios helps determine whether a company can cover its immediate liabilities?
Operating budget ratio
ROI
Quick ratio
Break-even point
4
Direct distribution channels typically result in lower-priced goods for customers
False
True
5
Which of the following is an example of a variable cost?
Commissions
Salaries
Depreciation
Rent
6
Burn rate measures the speed at which a company spends its cash reserves
False
True
7
Which of the following is a disadvantage of Software as a Service (SaaS)?
No subscription fees
Lack of control over features
Limited delivery methods
No maintenance requirements
8
Resiliency in entrepreneurs refers to their ability to tackle challenges with determination
True
False
9
What is a key benefit of using SaaS (Software as a Service)?
Ownership of the software code
No subscription fees
Custom-built functionality
Time-saving pre-built platforms
10
Copyright protects written works, music, and art.
True
False
11
If the cost to produce a product is $100 and the desired profit margin is 20%, what is the selling price?
$120
$140
$100
$125
12
The price a consumer pays for a product in an indirect distribution channel is influenced by the # of intermediaries
True
False
13
An operating budget only includes variable costs
False
True
14
If a company has assets of $50,000 and liabilities of $30,000, what is its equity?
$10,000
$20,000
$30,000
$50,000
15
Which of the following is NOT true about franchises?
They have higher start-up costs
They lower the risks of starting a business
They come with no restrictions on location
They offer ongoing training and support
16
What type of intellectual property protects inventions?
Trademark
Copyright
Trade secret
Patent
17
A business invests $10,000 in a project, which generates $15,000 in total returns. What is the ROI?
200
1,000
500
333
18
What type of intellectual property protects a company’s logo?
Trade secret
Patent
Copyright
Trademark
19
What is the formula for the break-even point?
(Total Revenue ÷ Total Costs) × 100
Fixed Costs ÷ Variable Costs
Total Cash ÷ Net Profit
Total Monthly Cost ÷ Selling Price
20
In the prototyping stage of design thinking, what is the main goal?
Define a core problem statement
Create a preliminary model of the product
Conduct surveys and focus groups
Observe customer behavior
21
Total Leasing Cost = (Monthly Lease Payment × Number of Months) + Fees
$48,000
$56,000
$60,000
$53,000
22
The break-even point can be calculated using the formula Total Monthly Cost ÷ Selling Price
False
True
23
Direct distribution is usually the shortest and least complicated way to deliver a product
False
True
24
True/False: Assets include liabilities such as loans and credit card balances.
True
False
25
Which of the following is an example of a political risk?
Customer dissatisfaction
Environmental changes
Market competition
Changing trade regulations
26
The CEO of a company is responsible for creating its vision, strategies, and mission
False
True
27
Trademarks protect unique artistic expressions.
False
True
28
What is the purpose of the “Prototype” stage in the design thinking process?
To create the final product
To test solutions
To identify customer needs
To define problems
29
What is an example of internal quality control?
Meeting local health inspection requirements
Complying with industry certifications
Following government regulations
Ensuring product standards within the production process
30
A value proposition explains why a customer should do business with a company
False
True
31
Determining the price of a product depends on:
Market competition
Customer satisfaction
Target market willingness to pay
Company profitability
32
ROI measures the profitability of an investment relative to its cost
False
True
33
Demographic data includes information about customers’ values and motivations
True
False
34
Fulfillment centers:
Store goods temporarily for retail stores
Process and ship customer orders on behalf of a company
Handle only in-store purchases
Manufacture and distribute products
35
What is a key feature of an indirect distribution channel?
Use of wholesalers, agents, or retailers
Only available for e-commerce businesses
No intermediaries involved
Direct purchase from the manufacturer
36
Which funding option uses online platforms to pre-sell products and raise capital?
Venture capital
Bootstrapping
Angel investment
Crowdfunding
37
Which of the following is a fixed cost?
Supplies
Commissions
Credit card fees
Salaries
38
Salaries are considered a one-time start-up expense
False
True
39
Which of the following is a funding option that allows business owners to maintain full ownership of their business?
Venture capital
Bootstrapping
Crowdfunding
Angel investment
40
A franchisee is allowed to open a location anywhere they choose without restrictions
False
True
41
What is a characteristic of direct distribution?
Adds middleman markups
Involves intermediaries
Requires distribution centers
Increases shipping costs for customers
42
What type of compensation is typically associated with sales roles?
Hourly
Salary
Commission
Equity
43
Equity compensation is a form of non-cash compensation
True
False
44
A SWOT analysis identifies a company’s internal strengths and weaknesses, as well as external opportunities and threats
True
False
45
Which business structure is ideal for international businesses due to double taxation?
S Corporation
Sole Proprietorship
LLC
C Corporation
46
Specific Marketing Expense = Total Budget × Percentage Allocated
$12,500
$10,000
$8,000
$15,000
47
Small business owners typically aim for rapid growth and taking on new business opportunities
True
False
48
Angel investors typically require an equity stake in the business they invest in
True
False
49
A marketing plan includes the company’s target market, value proposition, and promotional strategies
True
False
50
A business invests $10,000 in a project, which generates $15,000 in total returns. What is the ROI?
40%
50%
33%
60%
51
Which of the following best describes an entrepreneur?
Avoids new ventures and unknown risks
Seeks rapid growth and innovative opportunities
Relies on traditional methods of operation
Prefers low risk and steady profits
52
The design thinking process begins with empathizing with the customer.
True
False
53
Which of the following is an example of a "Threat" in a SWOT analysis?
A competitor entering your market
An innovative product line
Highly skilled staff
Low production costs
54
A bakery competes with a coffee shop selling breakfast items. What type of competitor is the coffee shop?
Substitute competitor
Complementary competitor
Indirect competitor
Direct competitor
55
Entrepreneurs are more focused on sticking with existing business operations than exploring new opportunities
True
False
56
Bundle pricing involves selling multiple products together at a lower price than their individual prices
False
True
57
Researching a service follows the same principles as researching a product
False
True
58
Internal quality standards are defined by external regulatory agencies
False
True
59
Which is NOT a step in developing internal quality standards?
Define quality in measurable terms
Refine processes
Review testing results
Conduct government inspections
60
The resource maturity stage allows the owner to separate financially and operationally from the business
False
True
61
Formula: CAC = (Marketing Expense + Sales Expense) / Number of New Customers
$100
$200
$150
$50
62
CAC = (Marketing Expense + Sales Expense) / Number of New Customers
$250
$400
$200
$300
63
What is the primary purpose of an operating budget?
To project revenues and expenses for a specific time period
To track customer satisfaction
To forecast profit margins
To calculate ROI
64
Leasing equipment has higher upfront costs but costs less in the long run
True
False
65
What is the formula for calculating ending cash balance?
Net Income + Sales Revenue
Total Revenue - Liabilities
Beginning Cash Balance + Sales - Total Costs
Total Expenses - Total Sales
66
The first stage of the design thinking process is to define the problem.
True
False
67
A business generates $8,000 in revenue in one month. What is the annual run rate?
$72,000
$80,000
$100,000
$96,000
68
The ideate stage of design thinking focuses on identifying customer problems
True
False
69
Entrepreneurs can mitigate risks by proactively planning.
False
True
70
The CFO is in charge of forecasting whether the company will meet budget requirements.
False
True
71
Environmental factors are a type of business risk entrepreneurs should consider
True
False
72
A target market is the group of customers that a business focuses on to maximize sales
False
True
73
What does the COO primarily oversee in a business?
Setting the company’s vision and strategy
Financial planning
Managing sales
Day-to-day operations and administrative functions
74
Shipping Revenue = Shipping Fee × Number of Products Sold
$5,000
$5,500
$4,000
$4,500
75
Which type of data is more accurate and reliable?
Primary data
Secondary data
Both are equally accurate
Neither
76
The formula for ROI is (Net Profit ÷ Cost of Investment) × 100
False
True
77
Customer service is an essential part of sales channels
True
False
78
Customer acquisition cost (CAC) is an important metric for evaluating the efficiency of marketing and sales expenses
False
True
79
Non-profit entities are exempt from paying U.S. federal taxes
False
True
80
The sales process includes which of the following steps?
Conducting surveys, lowering costs, and increasing profits
Pricing, promoting, and placing products
Identifying prospects, presenting, and closing sales
Eliminating competitors and improving pricing
81
Premium pricing involves targeting customers looking to save the most money
True
False
82
A company’s burn rate can only be positive
True
False
83
Which characteristic of an entrepreneurial mindset involves believing that any goal can be achieved with enough effort?
Growth mindset
Risk tolerance
Critical thinking
Self-reliance
84
The purpose of a value proposition is to communicate the value of products and services to customers
False
True
85
SWOT analysis is used to evaluate a company’s internal strengths and weaknesses only.
True
False
86
What is the purpose of calculating the burn rate?
To calculate the ROI
To identify the company's annual revenue
To determine how quickly the company spends its cash reserves
To assess the total monthly expenses
87
A pitch deck is a detailed document with every part of the business plan
True
False
88
External quality standards are set by health and safety inspectors, government agencies, and industry leaders
False
True
89
Variable costs change depending on the volume of production or sales
False
True
90
Liabilities are the remaining value of a company after all assets are deducted
True
False
91
Emergency funds are typically half of the estimated start-up expenditures
False
True
92
A B2B transaction involves selling products or services directly to consumers
False
True
93
Shipping Revenue = Shipping Fee × Number of Products Sold
$2,000
$2,500
$1,500
$3,000
94
What does "Equity" represent in a balance sheet?
Total liabilities
Total revenue
Total assets minus liabilities
Total expenses
95
A product costs $80 to produce, and the desired profit margin is 25%. What is the selling price?
$120
$90
$100
$105
96
Secondary data may include personal bias because it interprets primary data
True
False
97
What does customer retention cost focus on?
Acquiring new customers
Identifying market opportunities
Keeping existing customers
Increasing sales expense
98
ROI provides insight into the profitability of an investment
True
False
99
Which of the following is an example of a liability?
Accounts receivable
Inventory
Company vehicle
Credit card balance
100
Licensing allows an entrepreneur to use someone else’s intellectual property for a fee
True
False
101
A negative burn rate indicates that a company is spending more cash than it generates
True
False
102
Indirect competitors sell identical products to your business
True
False
103
Which of the following is an example of an ongoing expense for a business?
Taxes
Website design
First month’s rent
Licensing and permits
104
Which of the following is NOT a responsibility of a Chief Financial Officer (CFO)?
Creating budgets
Overseeing day-to-day operations
Managing cash flow
Negotiating financial matters
105
What are the key responsibilities of the CEO?
Managing company finances
Overseeing operations and resources, setting vision and strategy
Monitoring day-to-day administrative tasks
Creating and testing prototypes
106
Value engineering involves analyzing production processes to reduce costs while maintaining quality
True
False
107
What does Search Engine Optimization (SEO) aim to achieve?
Improve the rank of a website in search engine results
Increase social media followers
Develop a new product line
Reduce customer acquisition costs
108
Which of the following is NOT a characteristic of a franchise?
Ongoing support and training
Guaranteed financial success
Higher start-up costs
Strict rules on location
109
Retention Cost per Customer = Retention Expense / Number of Retained Customers
$40
$25
$20
$30
110
Which of the following is NOT a level in indirect distribution channels?
Manufacturer to agent to wholesaler to retailer
Manufacturer to retailer to customer
Manufacturer to wholesaler to retailer
Manufacturer to customer
111
The burn rate measures how quickly a company depletes its cash reserves
True
False
112
Emergency funds are typically half of the estimated start-up expenditures
True
False
113
What is the primary purpose of a lean canvas?
To create detailed financial projections
To market the company
To simplify the business plan into key elements
To find investors
114
A business spent $5,000 on marketing and $2,000 on sales, acquiring 70 new customers. What is the (CAC)?
$120
$85
$70
$100
115
What is the main goal of reaching product/market fit?
Minimizing costs
Ensuring consistent growth in sales
Decreasing competition
Expanding distribution channels
116
Gross profit is calculated as Income minus Cost of Goods Sold
False
True
117
Sales channels are the pathways through which products or services are delivered to customers
False
True
118
A distribution channel is the method used to get a product from the manufacturer to the end user
True
False
119
In the "Pivot or Persist" stage, what does the entrepreneur decide?
Whether to grow the business into a large company or start a new project
Whether to adjust the business model or close operations
How to manage financial risks
Whether to sell the company or retain ownership
120
Which of the following business structures limits ownership to U.S. citizens or residents only?
S Corporation
Limited Liability Company (LLC)
C Corporation
Sole Proprietorship
121
Which type of customer data helps businesses understand buying habits?
Behavioral data
Psychographic data
Geographical data
Statistical data
122
Break-even analysis helps businesses determine how much revenue is needed to cover their expenses.
False
True
123
Pay-per-click (PPC) advertising requires businesses to pay a fee every time their ad is clicked
False
True
124
A business opportunity always guarantees a profit for the buyer
True
False
125
Passion and strong relationships are critical factors in determining the viability of a business opportunity
True
False
126
What stage involves creating solutions after identifying problems?
Ideate
Empathize
Define
Test
127
Distribution centers receive and temporarily store goods before fulfilling retail orders
False
True
128
What is included in the start-up investment formula?
Fixed expenses, interest costs, and start-up revenue
Emergency fund, start-up expenditures, and reserve for fixed expenses
Start-up expenditures, variable costs, and fixed costs
Emergency fund, salaries, and fixed costs
129
When choosing between buying and leasing office space, a business should consider:
All of the above
Long-term costs
Operational needs
Short-term financial impact
130
Which type of data is typically easier and faster to obtain?
Primary data
Neither
Secondary data
131
What is a key characteristic of network marketing?
High startup costs
Selling and distributing products within a personal network
Independence from company rules
Guaranteed income
132
True/False: The formula for calculating selling price is (Cost × Desired Profit Margin) + Cost.
False
True
133
SBA grants need to be repaid with interest
True
False
134
A business opportunity involves an initial buyer fee of at least $500
False
True
135
Copyright protects inventions.
True
False
136
Indirect distribution often involves:
Several levels of middlemen
Lower product prices
Direct contact with customers
Door-to-door sales
137
What is the first stage of the business life cycle?
Existence
Success
Survival
Take-off
138
What is an example of primary data?
Market reports
Trade journals
Academic articles
Interviews and surveys
139
A pitch deck is a brief slideshow overview of a business plan
True
False
140
Start-up costs are only related to one-time expenses like equipment and logo design
False
True
141
Leasing equipment has fewer upfront costs but can be more expensive in the long run due to interest and fees
False
True
142
Which of the following is an example of a direct distribution method?
Two-level channel
Supplier-to-retailer-to-customer
Using a distribution center
E-commerce
143
Value engineering focuses on reducing costs while maintaining product function
False
True
144
High CAC indicates ineffective marketing or a demographic shift
True
False
145
Total Leasing Cost = (Monthly Lease Payment × Number of Months) + Fees
$64,000
$70,000
$54,000
$60,000
146
Specific Marketing Expense = Total Budget × Percentage Allocated
$18,000
$10,000
$15,000
$12,000
147
What type of competitor sells products that satisfy the same need but are not identical?
Indirect competitors
Niche competitors
Direct competitors
Market entrants
148
Retaining existing customers is often more cost-effective than acquiring new ones
False
True
149
A Limited Liability Company (LLC) can choose how it is taxed by filing Form 8832 with the IRS
False
True
150
If the production cost is $6.75, the selling price is $10, and the net profit is $3.25, what is the ROI?
25%
35%
52%
48%
151
Marketing platforms are tools used to advertise, communicate, and connect with customers
True
False
152
Which of the following business structures allows income to "pass through" to owners, avoiding corporate taxes?
C Corporation
S Corporation
Both a and c
LLC
153
Which of the following is a phase of achieving product market fit?
Minimum viable product
Distribution planning
Customer retention analysis
Quality control testing
154
Fixed costs fluctuate based on the volume of products or services sold
False
True
155
Which of the following is NOT a common risk faced by entrepreneurs?
Competition
Environmental factors
Customer preferences
Political changes
156
What is the formula for Customer Acquisition Cost (CAC)?
Marketing Expenses ÷ Total Revenue
(Marketing Expenses + Sales Expenses) ÷ Number of New Customers
Sales Expenses ÷ Total Expenses
Total Expenses ÷ Total Customers
157
If a business has an income of $8,000, cost of goods sold of $650, and expenses of $4,300, what is the net income?
$7,350
$3,050
$4,300
$2,050
158
Retention Cost per Customer = Retention Expense / Number of Retained Customers
$35
$20
$30
$25
159
What are the 4 P’s of marketing?
Positioning, Pricing, Placement, and Profit
Product, Price, Promotion, and Placement
Product, Price, Promotion, and Profit
Planning, Production, Pricing, and Promotion
160
Which of the following is NOT a sales channel?
Direct-to-consumer sales
Brick-and-mortar stores
Online retailing
Customer surveys
161
What is the main goal of market penetration pricing?
Target high-income customers
Quickly recover costs for a new product
Establish a reliable customer base before raising prices
Maximize profit margins from the start
162
Which of the following is typically not included in a business plan?
Organizational structure
Personal goals of the entrepreneur
Financial plan
Executive summary
163
What is the primary purpose of a lean canvas?
To simplify and map key elements of a business plan
To outline the executive summary
To organize the company’s marketing strategy
To provide detailed financial projections
164
How is a run rate calculated?
Operating budget ÷ Fixed expenses
Current monthly revenue × 12
Total cash ÷ Number of months
Total revenue ÷ Total costs
165
The formula to calculate (CAC) is: (Marketing expense + Sales expense) ÷ New customers
False
True
166
Which type of business structure has double taxation on both corporate profits and shareholder dividends?
LLC
S Corporation
Sole Proprietorship
C Corporation
167
A level 3 indirect distribution channel involves an agent, wholesaler, and retailer before reaching the customer
False
True
168
Break-even analysis determines how many units must be sold to cover total costs
False
True
169
A minimum viable product (MVP) is a product with the least amount of features needed to satisfy early customers
True
False
170
A Limited Liability Company (LLC) is globally recognized and taxed the same in every country
False
True
171
What is the primary purpose of quality control testing?
To improve marketing strategies
To increase employee productivity
To track customer satisfaction
To ensure consistent product or service delivery
172
The run rate projects a company’s annual performance based on a single month’s financials
True
False
173
Cash flow analysis helps businesses understand how much cash they generate and spend over a specific time period
True
False
174
Product/market fit is achieved when sales volume is high and continues to grow
False
True
175
Which of the following is an advantage of franchising?
Complete freedom over branding and products
Access to tested operational processes and recognized branding
Lower upfront costs compared to starting your own business
No need to pay royalties to the franchisor
176
ROI measures the profitability of an investment relative to its cost
True
False
177
External quality standards are defined and measured by the company internally
False
True
178
When researching a product, a business should:
Understand customer needs and competitors
Ignore market trends
Focus only on design features
Focus only on costs
179
Product market fit is achieved when customers love your product so much that they recommend it to others
False
True
