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47 Cards in this Set

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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:
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:
• Cheng is hardworking, smart and great with people
• Cheng has helped her grandmother often cleaning.
• She has a lot of experience.
Weaknesses	•
Weaknesses •
Cheng has always been pretty busy with school. • Cheng has always been pretty busy at home watching her brothers and sisters.
Opportunities
Opportunities
• 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
Threats
Threats
• large city there are several more established cleaning services • The building currently has a housekeeping service, Senior Complex Cleaning
2. Below explain some of the advantages to Sole Proprietorship
• Single owner don’t have to deal with a partner
• Simplest and least expensive
2. Below explain some of the disadvantages to Sole Proprietorship
• Only one person is responsible for the debts
• No ownership liability protection
QUESTION #1: What other housekeeping businesses are there in her area?
Secondary
QUESTION #4: Does Cheng need any training or licenses to start her business?
Secondary
QUESTION #3: How much would her the seniors be willing to pay Cheng?
Primary
QUESTION #2: How much do these competitors charge and what services do they provide?
Primary
6.	Out of the two competitors, who is the most competitive and why?
Out of the two competitors, who is the most competitive and why?
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 t...
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.
What do you think Cheng’s competitive advantage could be?
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
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:
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:
A. Mistake #1

Cleans apartments afterschool should go with the product not place.
Place is all about DISTRIBUTION!!! where will the product be distributed to your customers.
Example: where will the service take place.
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:
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.
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
c. Cheng’s Unit of sale is the price a customer is charged for cleaning one studio apartment
What is the contribution margin for Cheng’s business?
What is the contribution margin for Cheng’s business?
The contribution margin is selling price per unit – the total variable expenses, which makes her contribution margin $30-$20= $10.00.
Take a look at Cheng’s fixed expenses. What doesn’t belong? Why?
Take a look at Cheng’s fixed expenses. What doesn’t belong? Why?
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.
What is Cheng’s annual Fixed Operating Expenses?
What is Cheng’s annual Fixed Operating Expenses?
A fixed monthly expense amount of $110 multiplied by 12 months equals a fixed operating expense of $1320.00
Finally calculate her break-even units (monthly fixed expenses/ contribution margin/unit). How many units does she need to sell to make a profit?
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.)
A SWOT analysis is being completed for Cheng’s business opportunity. Identify a good “S” or strength for the business.
Cheng has experience providing this service.
Which of the following factors has the greatest impact on the demand for Cheng’s business opportunity?
The price it costs to clean an apartment
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?
Demand will go down.
What type of business is Cheng planning to operate?
Service
As she is starting her business, Cheng chooses to be a sole proprietor. What is an advantage of this business ownership structure?
It is the least expensive business ownership structure to start.
Cheng is considering several mission statements. create a mission statement that most closely meets the requirements of a well-written mission statement?
At Granddaughter Friday, we will provide a thorou
gh and effective apartment cleaning that will always be on schedule and in a timely manner.
Cheng has a business that uses a variety of different products. Which statement states how Cheng could best incorporate ongoing socially responsible business practices?
Cheng will use the most environmentally safe cleaning products.
Which characteristic will best help Cheng implement her business idea?
determination
Which of the following customer characteristics is least important for Cheng to consider when researching the market segment for her service?
height
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?
primary
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
D. All of the above
Why might a customer choose “Maid on Demand” instead of Cheng’s Business?
Why might a customer choose “Maid on Demand” instead of Cheng’s Business?
Maid on Demand has more familiarity in this area.
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)
In the first year, hire at least 10 employees.
14.	Where is the error in Cheng’s marketing mix?
14. Where is the error in Cheng’s marketing mix?
Place should instead state where customers can sign up for the service.
What is the best way that Cheng’s grandmother can help promote the business?
Write a recommendation for Cheng to give to residents
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
Refrigerator magnets (something printed) not on a computer.
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?
Referrals
How can Cheng best keep existing customers while growing her business?
By providing discounts for long-term customers
Cheng forecasts that she will have 10 clients interested in buying her services each week. What research data best supports that prediction?
The percentage of seniors that are looking for a new cleaning service
What information will be the least helpful for Cheng as she makes a sales forecast?
The percentage of seniors who are allergic to cleaning supplies
What is Cheng’s unit of sale?
What is Cheng’s unit of sale?
Cleaning one studio apartment
What is the contribution margin based on the Economics of One Unit chart?
What is the contribution margin based on the Economics of One Unit chart?
$17
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
Set a time and date to clean the apartment
Which item does not belong on Cheng’s list of fixed expenses?
Which item does not belong on Cheng’s list of fixed expenses?
Cleaning supplies
Cheng determines her average monthly fixed expenses to be $110. What are her average yearly fixed operating expenses?
Cheng determines her average monthly fixed expenses to be $110. What are her average yearly fixed operating expenses?
$1,320
Based on the income statement, what are Cheng’s projected total yearly sales?
Based on the income statement, what are Cheng’s projected total yearly sales?
$10,800
Cheng calculates her break even: (monthly fixed expense/contribution margin), which she rounds up to 7. What does her break even tell her?
She needs to clean at least 7 apartments to cover her expenses.