1. 2-1. Shawn is creating a business that provides advertising on public restroom stall doors. He is funding the project from his personal savings of $5,000 and does not expect to use any outside financing. Should he utilize the Lean Startup process? Create Business Model Canvases? Develop a business plan? Why or why not? 2. 2-2. Charity and Devon are planning to license technology from NASA that would make it impossible to accidentally lock a child in a car. The technology is complex, and the market analysis and financial assumptions take up a lot of pages. The two women have written a 63-page business plan. Explain your concerns about the plan considering the chapter text. 3. 2-3. What factors make the difference between a good business plan and an excellent one? 4. 2-4. Visit an Internet shopping site, such as the Home Shopping Network (http://www.HSN.com) or QVC (http://www.QVC.com). Select five products for sale that you find interesting or unusual. Make a list of the products and your explanation of the market opportunities they reflect. 5. 2-5. Explain how this statement applies to business plans: Errors of omission can sometimes be greater than errors of commission. Key Concept Questions 1. 2-6. Explain why a prospective business founder might want to create a feasibility study or Business Model Canvas before developing a complete business plan. 2. 2-7. How can investing time in the Lean Startup process save an entrepreneur time and money in the short and long term? 3. 2-8. What are the parts of a Business Model Canvas? How can the entire canvas assist an entrepreneur? 4. 2-9. Explain why the executive summary is the most important section of any business plan. 5. 2-10. One mistake entrepreneurs make in their business plans is that of only including an income statement. What other financial statements should be incorporated and why? 6. 2-11. Print an assignment, or any body of text, with 1-inch margins, double spaced, using 12-point Times New Roman font. Then, print the same document with 0.8-inch margins, single spaced, using a 10-point Arial typeface. Which is easier to read? Why? How would this relate to a business plan? 7. 2-12. Name three categories of investors/lenders that might have an interest in your business plan. 8. 2-13. Why is it important to identify a businesss culture from the beginning? Key Concept Questions 1. 3-7. Gross profit is the profit of a business before which other costs are subtracted? What is the average unit of sale for the following businesses? (3-8, 3-9) 2. 3-8. A restaurant that serves $2,100 in meals to 115 customers per day. 3. 3-9. A record store that sells $1,500 worth of CDs to 75 customers per day. 4. 3-10. Sue, of Sues Sandwiches, sells sandwiches and soda from a sidewalk cart in a popular park near her house. She sets up her cart in the summers to earn money for college tuition. Last month she sold $1,240 worth of product (sandwiches and sodas) to 100 customers. She spent $210 on the sandwich ingredients and buying the sodas wholesale. Her unit is one sandwich ($4) plus one soda ($1). Define the unit of sale and calculate the economics of one unit for Sues Sandwiches. 5. 3-11. When Steve Wozniak and Steve Jobs envisioned a computer in every home, computers were large, expensive machines owned only by the government, universities, and large companies. What technology currently available today to only a few people can you envision meeting a need for many consumers in the future? 6. 3-12. Is there a service presently available to only a few consumers, or one that is not available yet? Write about a service that you can imagine eventually becoming very popular and the need(s) it will meet. 7. 3-13. If the FX rate between the U.S. dollar and the Japanese yen is 1:119, how many yen will it take to equal $20?