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Spa Business > Mid Term > Flashcards

Mid Term Flashcards

1
Q

Small Business: 2

A

Independently owned organization that exists to make a profit for its owners

Measured as having fewer then 500 employees

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2
Q

Entrepreneur: 2

A

Someone who risks money to make a profit

All business owners, free lancers, and self-employed people

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3
Q

Employability skills: 5

A

Oral and written communications

Mathematics

Time management

Team work

Computer literacy

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4
Q

Entrepreneur skills:3

A

Financial planning – understand cash flow

Sales/negotiation - relationship building

People management – recruit, train, motivate

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5
Q

Entrepreneur Personal demands: 3

A

50hrs/week (average)

Takes 3-5 years to establish

Family issues

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6
Q

What is a business plan: 3

A

Checklist- keeping you and the process organized

Communicates plan- to lenders, investors, partners

Makes it real- motivator

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7
Q

Length and format of business plan: 3

A

10-100 pages

Divided into 5 sections

Lots of proof reading, clearly labelled diagrams and correct calculations

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8
Q

The different kinds of business plans: 5

A

Basic plan- used for startups

Buying an existing business

Buying a franchise

Taking over family business

Renewal of business

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9
Q

Section one of business plan: 6

A

Concept and summary

Executive summary

Describes what business is selling

Customers it will have

Why there is an opportunity for the business now

Why the owners are the right people for the business

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10
Q

Executive summary-purpose, key elements and importance : 3

A

Purpose –concise overview of business

Key elements: business name, location, services, mission statement

Importance- captures the essence of business for potential investors/ partners

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11
Q

Section 2 of the business plan: 6

A

Feasibility- how do you know it will work

Market analysis

General location/working from home

Market potential

Competition

Estimating future sales

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12
Q

Market analysis- purpose, key elements and importance:3

A

Purpose- understanding your industry, competitors and target market

Key elements- market trends, target customer demographics and competitor analysis

Importance- helps in positioning your business effectively in market

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13
Q

Section 3 of the business plan: 7

A

Marketing- how will you get customers

Services offered

Marketing and sales strategy

Service and product strategies

Negotiation

Advertising

Selling process

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14
Q

Services offered- purpose, key elements and importance:

A

Purpose- detailing the services you will provide

Key elements- service descriptions, pricing strategy, unique selling points

Importance- defines what sets your services apart from competitors

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15
Q

Marketing and sales strategy- purpose, key elements, importance: 3

A

Purpose- outlining how you will attract and retain customers

Key elements- marketing channels (social media, email), sales tactics, promotional strategies

Importance:
Essential for driving business growth and building customer loyalty

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16
Q

Section 4 of business plan: 7

A

Operations- how you will organize work

Operational plan

Management and organization

Floor plans

Policies and procedures

Functions and management

Industry associations

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17
Q

Operational Plan- purpose, key elements, importance:

A

Purpose- describing day-to-day operations of business

Key elements- location, equipment, staff, suppliers, business hours

Importance- ensures smooth running and efficiency

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18
Q

Operations and organization- purpose, key elements, importance:

A

Purpose- outlining business organizational structure

Key elements- business ownership, management team roles, staff responsibilities

Importance- clarifies roles and responsibilities, ensuring effective management

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19
Q

Section 5 of business plan: 6

A

Finances- how will I manage money

Financial planning

Financial statements

Making a profit

Break even points

Cash flow planning

Sources of financing

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20
Q

Financial planning- purpose, key elements, importance:

A

Purpose- providing financial roadmap

Key elements- startup costs, revenue projections, profit/loss forecast, cash flow analysis

Importance- critical for managing finances and attracting funding

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21
Q

Feasibility: 6

A

Selecting a location for business – how important it is for success

Identify advantages and disadvantages

Competition

Estimating sales

Business insurance

Theft protection

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22
Q

Location: 2

A

Genral geographic area business can be found

Neighborhoods, municipality, region, county

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23
Q

Site: 2

A

Specific place where business is conducted

Particular block, address, suite, part of a building

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24
Q

Main considerations of location: 3

A

Closeness to customers
Transportation
Suppliers

25
Q

Site issues/main considerations: 4

A

Traffic

Visibility

Parking

Neighboring business

26
Q

Home based business: 3

A

Site of business is, owners car, cell phone, basement etc.

Decision to work from home depends on what your selling and to whom

Business plan should explain decision- why it’s best for business, customers- not just convenience

27
Q

Leasing premises: 3

A

Basic rent

Maintenance and other expenses

Length if lease leasehold improvements

28
Q

Basic rent: 2

A

Minimum rent charged by landlord

May be charged percentage of sales, maintenance fees and other expenses

29
Q

Maintenance and other expenses: 4

A

On top of utilities, paying property owner for expenses

Gardening

Garbage pick-up

Snow removal

30
Q

Length of lease: 2

A

Length you want lease to run

More doubt with short lease

31
Q

Leasehold approvements: 4

A

Renovation
Modifications
New fixtures
Etc

32
Q

Calculating base rent example:

A

sold for amount $ per square ft. need to know years worth

1000 square ft for $12/square
1000x12= $12 000/year
$12 000/12months= $1000/month base rent

33
Q

Direct Competition: 2

A

Provides similar products and services
Pursuing same potential clients

34
Q

Indirect competition: 2

A

Alternative for customer to satisfy needs

Where else customer may be able to get products and services offered

35
Q

How to learn about competition: 3

A

Experience- work for one
Primary research
Secondary research

36
Q

Primary research:4

A

Gathering information from original source
Interview
Observe
Questionnaire

37
Q

Secondary research: 1

A

Using information that has already been gathered and published

38
Q

Market Potential: 2

A

How much money a group of potential customers will spend on particular product/service

How much business is out there and how many of them will be consumers

39
Q

Sales forecast:4

A

An estimate if how much money a business will bring in over a given period
How much you can expect an how much is coming in
How much are the expenses
How much is left over

40
Q

sources to find market potential: 6

A

Government and municipal statistics

Business publications

Trade magazines

Primary research

Populations of province, region

Amount of sales across province

41
Q

How to calculate potential sales $ in region: 6 and example (sales forecast)

A

Region population divided by province population = percent of population

Sales in province x region pop. percent = sales in region

Wont have market of full percent - Figure out amount of population that is your target

Target market divided by region population = % of market

Total sales in region x % of market= potential sales in market

Consider if you will receive full market, what percent of potential market you aim for in the first year

34 000 (chatham) / 3 300 000 (ON) = 1%
$275 000 000 x 1% = $2 750 000

Target- women age 30-55: 6000 in chatham
6000/ 34 000= 0.18%
2 750 000 x 0.18%+ $495 000

42
Q

Marketing Definition: 3

A

Process of selecting groups of potential customers

Identifying their needs

Developing strategy to satisfy those needs

43
Q

Projected image: 1

A

Impressions of business created by the minds of potential customers by everything you do

44
Q

Expected image: 1

A

impressions carried by potential customers of what business should be like

45
Q

Cognitive dissonance: 1

A

Psychological discomfort felt when trying to hold two opposing ideas in mind

46
Q

Naming the business:

A

Get attention

Easy to remember

Projects image you want

47
Q

Business cards: 7

A

Extension of brand

Creates image

Contact info

Marketing tool

Promotions – stamping

Appointment reminders

QR code

48
Q

Service menu: 7

A

Matches image portrayed

Logo and colour scheme

Easy to read

Service names and descriptions

Pricing

Timing for each service

Clean and organized

49
Q

Marketing strategies: 4

A

Product/service strategy - different than competitors

Pricing strategy - cheaper

Distribution strategy – how you give/distribute product/service

Promotion Strategy – to inform customers deals, packages, ads etc.

50
Q

Promotion Strategy needs: 4

A

Grab attention- ask question, solve problem

Project right image

Action- drop by today, please call

Measure- activity, sales, purpose of ad

51
Q

Publicity: 2

A

Promotion by spreading information about your company, product or service

Without paying for space or time

52
Q

Sales promotion: 3

A

Technique to get customers to buy

Don’t fit other discreet categories

Give aways, coupons , 2 for 1, events, tradeshows, displays, free samples

53
Q

Combinations and amount of service: 3

A

Specialization- more is not better, be the best at less

Keep it simple

Easier to add something new then stop providing- customer loss

54
Q

decision of which product line to use: 3

A

Check list of what you are looking for in line

Features can be used for marketing- vegan/cruelty free

Ingredients, packaging, price, popularity, locally made, etc.

55
Q

Setting Cost of service/products : 2

A

How much product used for service

Sizes and price of professional product used in service

56
Q

Formulation to find prices of product used in facial:

A

Price of whole product divided by mL in full product = price/ mL
$30.75/250mL = 0.12= 12 cents/mL

Estimate how much is used per service- mL
$0.12x 2mL used= 24 cents

Add all the prices of mL used
= $7.99

Supplies and equipment used are taken into consideration for price along with esthetician time

57
Q

3 basic strategies for price setting:3

A

Price lower than the competition

Price higher than competition

Price same as competition

58
Q

Penetration Pricing:1

A

so much of it that the price is reasonable – fast food

59
Q

Price skimming: 1

A

Expensive due to lack of availability
Water at concerts

Spa Business (2 decks)

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