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EBUS 1614 > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

Explain the term ‘viability study’.

A

It is an in-depth investigation to determine how profitable a business idea is and whether it is possible to convert an idea into a business enterprise.

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2
Q

What is market research?

A

Gather, analyze, and interpret information on target market, including characteristics, buying behavior, location, and needs of past, present, and potential customers. This includes the industry and competitors.

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3
Q

Explain the needs analysis & the characteristics of customers.

A

A) Who are my potential customers?
What are their needs?
How do they make buying decisions?
Is there a need for my product/services in the market?
Distinguish between physical products and brand image.
Focus on customer profile of potential customer.

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4
Q

What are the 3 questions to establish if there is a need for your product?

A

What are the features of the product?
Who are the major competitors and suppliers in the market?
Who are the potential customers and segment of the market?

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4
Q

List some customer profiles.

A

Demographic
Geographic
Psychographic
Purchase history
Creditworthiness

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5
Q

List the types of business structures.

A

Sole trader
Partnership
Cooperative
Company
Non-profit organization

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5
Q

What are some legal considerations in the business structure?

A

New Companies Act (NPA) 71 of 2008
Consumer Protection Act (CPA)

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6
Q

List 5 ways that CPA protects the consumers.

A

CPAs help consumers comply with tax laws.
CPAs empower consumers to make informed financial decisions.
CPAs help prevent financial fraud within companies that could harm consumers.
CPAs ensure companies report accurate financial information to the public.
CPAs act with integrity, protecting consumers from misleading practices.

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7
Q

What are some principles of a cooperative business structure?

A

Independence

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8
Q

What is a mission statement?

A

The business’s purpose and the business’s intention.

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9
Q

Checklist for starting a business.

A

Determine business structure: public, private, etc.
Choose business name and consider alternatives.
Develop business plan.
Await enterprise registration number from CIPC.
Apply for VAT, income tax, PAYE, SDL, and UIF numbers.
Register logo as trademark with CIPC.
Copyright all enterprise intellectual property.
If applicable, register patent with CIPC for unique product.

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10
Q

What are some good questions that need to be answered when developing a mission statement?

A

Why are you in a business?
Who are your customers?
What is the nature of your products/services?
What image do you want your business to convey?

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11
Q

What is an objective?

A

It is something the business wants to achieve over a set period of time.

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12
Q

What is the smart objective approach?

A

Specific - what, who, why
Measurable -from, to
Attainable - how
Relevant - worthwhile
Timely - when

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13
Q

Please understand how to use SMART goals in real life scenarios.

A

ayt bet.

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14
Q

What is market analysis?

A

The process of determining the total potential market, the target market, market size and the expected market share.

15
Q

List the market segments.

A

Demographic - age, gender, race
Geographic - province, suburb
Psychographic - lifestyle
Behavioristic - customer behavior

16
Q

What is market positioning?

A

Ability to influence consumer perception regarding a brand relative to competitors.

17
Q

When evaluating the target market decision, what should your choice of segment be governed by? APS

A

Accessibility
Profitability
Size

18
Q

Study the calculation of the size of the market.

A

ayt bet.

19
Q

What is a target market?

A

It is a group of consumers that a business aims its products and services to.

20
Q

What is the purpose of a SWOT analysis?

A

To identify internal strengths and weaknesses, external opportunities and threats.

21
Q

Study the calculation of the expected market share.

A

ayt bet.

22
Q

Calculate the selling price.

A

Cost Price + Mark Up = Selling Price

23
Q

Calculate cost price.

A

Fixed costs (labor) + Variable Costs (rent) = Total Cost

24
Q

What influences the price one can charge for their product or service?

A

Competitors.

25
Q

Study the calculation of the expected profit.

A

Profit = Sales - Total Cost

Net Profit = Sales - CoS
Net Profit = Gross profit - Expenses

26
Q

Study the Calculation of the break even point.

A

BEP = Fixed Costs/(Selling Price - Variable Cost)

27
Q

What is the contribution margin?

A

SP - VC

28
Q

List the ways to lower the break even volume.

A

Increase Prices
Control cost of fixed expenses
AIM IS PROFIT

29
Q
A

EBUS 1614 (7 decks)

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