Download Network for Teaching Entrepreneurship 2014

Network for Teaching
Entrepreneurship
2014-2015 Summative Assessment
Student ID:
Name:
Date of Birth:
Period/Class Code:
Directions: This test will let you show what you have learned about entrepreneurship. It
is based on a fictional story about a woman named Cheng. Cheng knows that you have
recently completed a course in entrepreneurship. She wants your help in creating a
business plan. Please answer the following questions to the best of your ability. If you
do not know the answer to a question, take your best educated guess!
Cheng’s Business Idea: Granddaughter Friday
Cheng wants to launch a housekeeping business. Her business will cater to elderly
clients. These clients live close together in senior apartments. Cheng has cleaned her
grandmother’s apartment before. She visits her grandma frequently in a retirement
community. Cheng is well-known among people who live there.
1. Cheng does a SWOT analysis to test her business idea. Which of the answers
below would be one of Cheng’s personal strengths?
A.
B.
C.
D.
Cheng’s grandmother is the only elderly person she knows.
The apartment complex has a housekeeping service.
Cheng has experience cleaning apartments.
Many of her potential clients live near each other.
2. Which of the following factors has the greatest impact on the demand for Cheng’s
cleaning service?
A.
B.
C.
D.
The number of years that a person has lived in the apartment
The length of time it takes Cheng to buy cleaning supplies
The age of the people in the apartments
The price Cheng charges to clean an apartment
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3. Cheng’s customers say that they are willing to spend $30 for a cleaning service. She
wants to charge $50 instead. What do you think will happen to the demand for her
service?
A.
B.
C.
D.
Nothing, demand for her service will be constant.
Demand for her service will go up.
Demand for her service will change with the seasons.
Demand for her service will go down.
4. Imagine that Cheng started a second business. This business would make cleaning
products. Which of the following would be the best description of that type of
business?
A.
B.
C.
D.
Manufacturing
Wholesale
Service
Retail
5. Cheng chooses to be a sole proprietor for her business. What is an advantage of
this business ownership structure?
A. It is the least expensive to start.
B. It offers Cheng less liability if something goes wrong.
C. It offers at least two people who can assume liability.
D. None of the above.
6. Cheng is trying to write a mission statement. Which of the following most closely
meets the requirements of a well-written mission statement?
A.
B.
C.
D.
Cheng will clean apartments.
Granddaughter Friday will provide apartment cleanings for elderly people.
Granddaughter Friday will provide good customer service.
Granddaughter Friday provides full service cooking.
7. Cheng wants her business to be socially responsible. Which of the following states
how she can do this on an everyday basis?
A.
B.
C.
D.
Cheng will use different cleaners.
Cheng will use environmentally safe cleaning products.
Cheng will throw away leftover materials.
Cheng will contribute money to a charity once a year.
8. Which of the following is not a true statement about characteristics and skills?
A. Skills can be learned with practice
B. Personal characteristics can be developed over time
C. Only skills are important for starting a business
D. Both skills and personal characteristics are important for starting a business
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9. Cheng is going to find out the characteristics of her customers. Which of the
following would be the least important for her to research?
A.
B.
C.
D.
Age
Location
Height
Income
10. Cheng asks customers how much they are willing to pay for her service. What type
of research is this?
A.
B.
C.
D.
Secondary
Primary
Both
Neither
11. Cheng has found the total number of people that live in her targeted area. Which of
the following could be a potential next step to find the target market size?
A.
B.
C.
D.
Estimate how many people live in apartments
Survey people to see if they would buy her service
Sort the population in groups by their interests
All of the above
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Competitive Matrix
Cheng identifies one direct competitor. The direct competition is named Maid on
Demand. They have been around for a long time. Cheng needs to figure out her
competitive advantage. She uses the competitive matrix below to compare her business
to her competitor. Use this chart to answer question #12.
Factors
Cheng’s Business
Maid on Demand
Price
$30 for a single room
apartment
$40 for a single room
apartment
Reputation
New business
Well-established
Customer Service
Excellent
Great
Unique Factors
Knowledge of the community
Experienced in the cleaning
industry
12. Why might a customer choose “Maid on Demand” instead of Cheng’s Business?
A.
B.
C.
D.
Maid on Demand is less expensive than Cheng’s business.
Maid on Demand has more experience.
Cheng’s Business has better customer service.
Cheng’s Business is more highly rated by customers.
13. Cheng wants to grow her business. She sets a goal for the first year. Which goal will
best help Cheng increase the size of her business?
A.
B.
C.
D.
Increase the price of her cleaning service.
Provide company uniforms to all employees.
Get a written reference from each customer.
Try out several cleaners to determine which is the most effective.
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Marketing Mix
Cheng wants to tell new customers about her business. To help her reach these people,
she uses a Marketing Mix. A Marketing Mix is a strategy for communicating to
customers. Use the Marketing Mix chart below to answer question #14.
People:
- 70 years old
- Lives alone
- Uses a walker
Product:
- Weekly
apartment
cleaning
Place:
Price:
- Provides service
at customer’s
apartment
- Price to clean a
one room
apartment is $30
Promotion:
- Flyers
- Will also feed pets
- Announcements at
Residence Meetings
14. Which of the following is an error in Cheng’s marketing mix?
A.
B.
C.
D.
A customer’s age is not included in a marketing mix.
Place should include where customers will hear about the service.
Price is not a strategy in a marketing mix.
Flyers should be moved to the product section.
15. Cheng’s grandmother wants to help the business. What is the best way that she can
help with promotions?
A.
B.
C.
D.
Write a recommendation for Cheng to give to residents
Help clean other apartments with Cheng
Allow Cheng to clean her apartment
Help Cheng with the business’s finances
16. Cheng finds out that most of her target customers do not own a computer. Which of
these promotions would be the best for Cheng to consider?
A.
B.
C.
D.
Social media
Online blogs
Internet pop-up ads
Refrigerator magnets
17. Cheng wants to find new customers. She asks current customers for the contact
information of other residents. Which sales approach is she using?
A.
B.
C.
D.
Referrals
Promotional responses
Data mining
Cold calling
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18. Cheng wants customers to buy more than once. How can Cheng best keep current
customers?
A.
B.
C.
D.
Ignore comments from customers
Pressure current customers to buy again
Provide loyalty programs
Do not take on any new customers
19. Cheng makes a sales forecast. She estimates that she will have ten interested
clients each week. What research data would best support that claim?
A.
B.
C.
D.
The time it takes to clean one apartment
The total number of all residents in the area
The number of seniors that said they are looking for a new cleaning service
The frequency that seniors clean their apartments
20. What of the following would be the least helpful for Cheng’s sales forecast?
A.
B.
C.
D.
The number of seniors who use a cleaning service
The maximum number of apartments she can clean in a week
The time of the year when many seniors go on vacation
The percentage of seniors who own pets
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Economics of One Unit
Entrepreneurs need to know if their business makes a profit. The Economics of One
Unit helps do this. It shows how much a business earns with each sale. Cheng sets the
selling price to clean a one room apartment at $30. She thinks it will take about 60
minutes to clean the apartment. Below is her Economics of One Unit. Use it to answer
questions # 21 & 22.
Economics of One Unit:
Cheng’s Business (Granddaughter Friday)
Selling price (per Unit):
$30
Variable Expenses
Cost of Services Sold
Materials (Cleaning products, etc.):
Labor: ($10 per hour)
Cost of Services Sold:
Other Variable Expenses
Commissions:
Shipping & Handling:
Other Variable Expenses:
Total Variable Expenses:
$3
$10
$13
$0
$0
$0
$13
Contribution Margin (per unit):
$
21. What is Cheng’s unit of sale?
A.
B.
C.
D.
Cleaning one room
Cleaning one room apartment in 60 minutes
Cleaning for one senior
Cleaning for one building
22. What would be the contribution margin (per unit)? Use the Economics of One Unit
chart.
A.
B.
C.
D.
$10
$13
$17
$30
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23. Cheng plans how she will provide her service to customers. Which of the following
would best describe the missing step in the chain below?
Step 1: Customers visit the Granddaughter Friday website.
Step 2: ____?____
Step 3: Cheng gathers the cleaning materials.
Step 4: Cheng drives to the apartment to do the cleaning.
Step 5: Customer pays Cheng for her service.
A.
B.
C.
D.
Customers read Cheng’s business plan online.
Customers set a time and date to clean the apartment.
Cheng passes out flyers to customers.
Cheng cleans the apartment.
Fixed Expenses
Cheng also knows that she has fixed expenses. She has to pay these expenses each
month in order to stay in business. The Fixed Expenses chart is a list of what will be
included in her average monthly fixed expenses. Use it to answer question #24.
Expense
Phone Bill
Advertising
Cleaning Supplies
Insurance
Amount
$60
$5
$20
$45
24. Which item does not belong on Cheng’s list of fixed expenses?
A.
B.
C.
D.
Phone Bill
Advertising
Cleaning supplies
Insurance
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Income Statement
Cheng expects to sell 360 units in her first year. Her next step is to build her income
statement. Use the Income Statement chart below to answer questions #25 & 26.
A
B
Income Statement (Projected)
Selling Price per Unit
Number of Units Sold
C
Total Yearly Sales
D
E
F
G
H
I
Total Variable Expenses
Contribution Margin
Fixed Operating Expenses
Pre-Tax Profit
Taxes @ 15%
Net Profit
$30
360
?
$4,680
$6,120
?
$4,800
$720
$4,080
25. Cheng finds that her average monthly fixed expenses will be $110. What are her
average yearly fixed operating expenses?
A.
B.
C.
D.
$110
$1,320
$3,000
None of the above
26. What are Cheng’s projected total yearly sales? Use the Income Statement chart.
A.
B.
C.
D.
$1,560
$5,400
$10,800
$162,000
27. Cheng calculates her break-even units using the formula she learned. She rounds
her answer up to 7. What does her break-even units tell her?
A.
B.
C.
D.
She can make $7 in a month.
She can only clean 7 apartments a month.
She needs to clean at least 7 apartments to cover her expenses.
An investor will take 7% of her profit each month.
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