Nfte End Of Year Test

Front 1

1. Complete a SWOT analysis, to help Cheng identify if this is a good business opportunity below. For each of the four categories list at least two examples.

strength:

Back 1

• Cheng is hardworking, smart and great with people
• Cheng has helped her grandmother often cleaning.
• She has a lot of experience.

Front 2

Weaknesses •

Back 2

Cheng has always been pretty busy with school. • Cheng has always been pretty busy at home watching her brothers and sisters.

Front 3

Opportunities

Back 3

• 35% of the community live in senior centers
• seniors are disabled and/or cannot move around as well as they could in the past • Grandmother is popular in her senior complex
• Cheng has done some community service work at the nearby Senior Center,
• many of the buildings occupants know Cheng and her family

Front 4

Threats

Back 4

• large city there are several more established cleaning services • The building currently has a housekeeping service, Senior Complex Cleaning

Front 5

2. Below explain some of the advantages to Sole Proprietorship

Back 5

• Single owner don’t have to deal with a partner
• Simplest and least expensive

Front 6

2. Below explain some of the disadvantages to Sole Proprietorship

Back 6

• Only one person is responsible for the debts
• No ownership liability protection

Front 7

QUESTION #1: What other housekeeping businesses are there in her area?

Back 7

Secondary

Front 8

QUESTION #4: Does Cheng need any training or licenses to start her business?

Back 8

Secondary

Front 9

QUESTION #3: How much would her the seniors be willing to pay Cheng?

Back 9

Primary

Front 10

QUESTION #2: How much do these competitors charge and what services do they provide?

Back 10

Primary

Front 11

Out of the two competitors, who is the most competitive and why?

Back 11

Maid on demand is the most competitive because of the reputation and availability
However the price may persuade customers to try Cheng’s business just to see if the quality will be better at a less expensive rate. Cheng should offer a first time discount to motivate customers to give her business a chance at providing the same quality of service for less.

Front 12

What do you think Cheng’s competitive advantage could be?

Back 12

Cheng’s competitive advantage is:
• Price!
• Knowledge of the community
• Grandmothers reputation
• Experience and quality of service
• Willingness to do extras such as plant/pet care and errands

Front 13

There are a few mistakes in her marketing mix. Identify the mistake and explain why it does not belong in the category she placed it in:

Back 13

A. Mistake #1

Cleans apartments afterschool should go with the product not place.

Front 14

Place is all about DISTRIBUTION!!! where will the product be distributed to your customers.

Back 14

Example: where will the service take place.

Front 15

Cheng also believes she should promote her business by advertising on Facebook and put up billboards on the highway. Are these effective ways to promote her business to her target customer? Please explain why:

Back 15

Because Cheng’s Target market is based in senior centers because of limited mobility, billboards on the highway would be expensive and not seen by her customer base because they are not as likely to be out driving the roads much. Facebook, although free, is technology driven and may not be something the seniors will even have working knowledge of or use.

Front 16

Help Cheng determine her unit of sale, selling price and contribution margin:
(Pick the correct answer: A, B, or C)
a. Cheng’s Unit of Sale the range of her prices she has to clean an apartment
b. Cheng’s Unit of sale the variable on the amount of time she spends cleaning

Back 16

c. Cheng’s Unit of sale is the price a customer is charged for cleaning one studio apartment

Front 17

What is the contribution margin for Cheng’s business?

Back 17

The contribution margin is selling price per unit – the total variable expenses, which makes her contribution margin $30-$20= $10.00.

Front 18

Take a look at Cheng’s fixed expenses. What doesn’t belong? Why?

Back 18

The cleaning supplies are actually a variable cost and is part of the economics of one unit that is paid by the customer, and therefore changes according to how many apartments that she cleans.

Front 19

What is Cheng’s annual Fixed Operating Expenses?

Back 19

A fixed monthly expense amount of $110 multiplied by 12 months equals a fixed operating expense of $1320.00

Front 20

Finally calculate her break-even units (monthly fixed expenses/ contribution margin/unit). How many units does she need to sell to make a profit?

Back 20

Cheng will have to divide her monthly fixed expenses of $110 and divide that by the contribution margin of $10, this makes her break-even units equal to 11 apartments.
(She divides the expenses that she has no matter what by the actual money that she makes after she subtracts her variable expenses.)

Front 21

A SWOT analysis is being completed for Cheng’s business opportunity. Identify a good “S” or strength for the business.

Back 21

Cheng has experience providing this service.

Front 22

Which of the following factors has the greatest impact on the demand for Cheng’s business opportunity?

Back 22

The price it costs to clean an apartment

Front 23

Cheng does a quick survey of her potential customers. She finds that on average, they are willing to spend $30 for a cleaning service. Cheng wants to charge $50, what do you think will happen to the demand for her product if she chooses to charge $50?

Back 23

Demand will go down.

Front 24

What type of business is Cheng planning to operate?

Back 24

Service

Front 25

As she is starting her business, Cheng chooses to be a sole proprietor. What is an advantage of this business ownership structure?

Back 25

It is the least expensive business ownership structure to start.

Front 26

Cheng is considering several mission statements. create a mission statement that most closely meets the requirements of a well-written mission statement?

Back 26

At Granddaughter Friday, we will provide a thorou
gh and effective apartment cleaning that will always be on schedule and in a timely manner.

Front 27

Cheng has a business that uses a variety of different products. Which statement states how Cheng could best incorporate ongoing socially responsible business practices?

Back 27

Cheng will use the most environmentally safe cleaning products.

Front 28

Which characteristic will best help Cheng implement her business idea?

Back 28

determination

Front 29

Which of the following customer characteristics is least important for Cheng to consider when researching the market segment for her service?

Back 29

height

Front 30

Cheng is determining which research method to use to answer the following research question:
QUESTION: How much would the senior citizens being willing to pay Cheng?

Back 30

primary

Front 31

11. Cheng has determined the population of the target market. Which of the following could be a potential next step to determine the market size?

A. Divide the number of people in the target market by the number of apartments
B. Do some primary research to gauge interest in the business opportunity
C. Categorize the population by their interests
D. All of the above

Back 31

D. All of the above

Front 32

Why might a customer choose “Maid on Demand” instead of Cheng’s Business?

Back 32

Maid on Demand has more familiarity in this area.

Front 33

Which short-term business goal illustrates a step in Cheng’s plan to increase the scale and profitability of her business?
(Scale and Profitability is related to size of business)

Back 33

In the first year, hire at least 10 employees.

Front 34

14. Where is the error in Cheng’s marketing mix?

Back 34

Place should instead state where customers can sign up for the service.

Front 35

What is the best way that Cheng’s grandmother can help promote the business?

Back 35

Write a recommendation for Cheng to give to residents

Front 36

From surveys, 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 to reach her target population?

A. Social networking
B. Highway billboards
C. Internet pop-up ads
D. Refrigerator magnets

Back 36

Refrigerator magnets (something printed) not on a computer.

Front 37

Cheng is trying to get new customers by asking current customers for the contact information of other residents. Which approach to sales lead generation is she using?

Back 37

Referrals

Front 38

How can Cheng best keep existing customers while growing her business?

Back 38

By providing discounts for long-term customers

Front 39

Cheng forecasts that she will have 10 clients interested in buying her services each week. What research data best supports that prediction?

Back 39

The percentage of seniors that are looking for a new cleaning service

Front 40

What information will be the least helpful for Cheng as she makes a sales forecast?

Back 40

The percentage of seniors who are allergic to cleaning supplies

Front 41

What is Cheng’s unit of sale?

Back 41

Cleaning one studio apartment

Front 42

What is the contribution margin based on the Economics of One Unit chart?

Back 42

$17

Front 43

Which step must Cheng complete first when providing her service?
A. Collect payment for cleaning the apartment
B. Set a time and date to clean the apartment
C. Gather the cleaning materials together
D. Locate the receipts for all expenses

Back 43

Set a time and date to clean the apartment

Front 44

Which item does not belong on Cheng’s list of fixed expenses?

Back 44

Cleaning supplies

Front 45

Cheng determines her average monthly fixed expenses to be $110. What are her average yearly fixed operating expenses?

Back 45

$1,320

Front 46

Based on the income statement, what are Cheng’s projected total yearly sales?

Back 46

$10,800

Front 47

Cheng calculates her break even: (monthly fixed expense/contribution margin), which she rounds up to 7. What does her break even tell her?

Back 47

She needs to clean at least 7 apartments to cover her expenses.