if i dont pass this.......... idk but i wont be happy Flashcards
What should be the central theme of marketing your Horticulture Business?
Differentiating yourself; How do you stand out? Good service& quality, unique products, different sizes, etc.
What is SWOT?
Strength
Weakness
Opportunity
Threat
What are Direct Costs?
Labor, Media, Pots, Fertilizer, etc
What are Overhead costs?
Taxes, Heat, Insurance, Utilities
How do you calculate Profit Margin?
Revenue-Sales * 100 = Profit Margin
What is the gross margin on sales?
Revenue from direct costs, ~50% is good
What is the current ratio on a business balance sheet?
Current Ratio= Assets/Liabilities. Calculates if you are paying bills on time
What is the minimum current ratio a business should have?
1.5. 2 is good as well
What is a depreciation write-off on fixed assets?
Decrease in value over time
What are prepaid expenses on a balance sheet?
Rent, Mortgage, Insurance Premiums, etc. NOT inventory. These expenses carry over to the following year.
What is a current liability?
Debts that are paid within the year.
What is long-term liability?
Debts that are not paid within a year
What is a variable cost?
Changes on volume
What is a fixed cost?
A cost that stays the same
What is the only fixed business asset you can’t depreciate?
Land
What is vertical integration?
Covering all services such as production to selling
What is horizontal integration?
Also selling home-goods such as patios and furniture
What is a balance sheet?
Snapshot of business cycles
Breakdown of Assets & Liabilities
What is an income sheet?
Sources of revenue & expenses that result in profit & loss
What is an accurate way to allocate overhead costs to crops in a greenhouse business?
Calculate the space in your greenhouse & the duration of growing (Limiting Factor)
Why might you consider growing a non-spring crop instead of closing for the fall?
Keep business coming, keep labor busy
What are business risks you want to have contingency plans for?
Bad temperatures, crop insurance, employee loss, drought
What might you consider doing if your business equity is less than 5% and you safely make 10% if you invested your capital in the stock market?
Selling the business. It’s not worth it if it’s expensive
What is the normal cost of labor as a percentage of total sales in a horticulture business?
30-33%; 3:1
Explain what filling a niche means in the horticulture industry?
Differentiate yourself do something different compared to other businesses
What is likely more important to consumers than perceptions of price only?
Value
What are two factors taken into account when quantifying overhead allocation costs to a crop in the greenhouse?
Space & Time (Limited Factor)
What metropolitan characteristics indicate good potential to start a successful greenhouse growing business?
No competition
Growing Population
Construction of neighborhoods
Gantt Charts
Planning & Scheduling for labor
What is leverage?
Debt incurred to financial assets; can increase profits or losses
How to calculate leverage ratio?
Total debt/Total equity
What is Amortization?
Paying amounts owed over time by incremental payments such as a car
What is EBITDA?
Earnings Before Interest Taxes Depreciation & Amortization
How to calculate current assets?
Cash + assets that are able to be converted into cash within the year
