Question 1: Business Canvas Project

Laced Up: testing who the customer is

Units 1 and 2
10 points
About 25 minutes

You can use a calculator on this question, just like on exam day.

Questions about the business project you built during the course: you pitch your product, explain how you tested a hypothesis to make a decision, and explain whether a common challenge for entrepreneurs, such as getting outside funding, threatens your idea. Practice questions here use a made-up sample project. On the exam: Question 1 of 4 (official name: Business Canvas Project Exam-Day Validation), Section IIA: 25 minutes, 15% of the score. Covers Units 1–4 and Skill Categories 1, 2 and 4. Section II has 4 free-response questions in 90 minutes (40% of the score). The exam is fully digital in Bluebook, and only a 4-function calculator is allowed (handheld or the built-in Desmos 4-function calculator).

The question and its sources

This is a practice version of Question 1. On the real exam, you answer about the Business Canvas Project you built during the course. Here, answer about the sample project below, which a made-up student built.

Sample Business Canvas Project: Laced Up

Student entrepreneur: Jalen, a high school junior.

Product: Laced Up is a sneaker-cleaning service. Customers hand their sneakers to Jalen at school on Monday and get them back on Thursday, hand-cleaned, deodorized and with new laces. A standard clean costs $15 a pair. A premium clean for suede and other delicate materials costs $25.

Customer problem (validated in Unit 1): Jalen interviewed 20 classmates who own sneakers. 14 said their sneakers get dirty quickly, and 11 said they don't clean them because it takes too long or they're afraid of damaging them.

Target customer hypothesis: Jalen first assumed that high school athletes, ages 14–18, who play outdoor sports would be Laced Up's main customers, because their shoes get the dirtiest.

Test: For two weeks, Jalen shared the same flyer in two places: the athletics locker room and the group chat of the school's sneaker club, whose members collect limited-edition sneakers. Each flyer's QR code opened a different order form, so Jalen could tell which group each order came from. Results are in Table 1.

Updated target customer profile: sneaker collectors, ages 15–18, who own five or more pairs, follow sneaker release news and want their shoes to look new to protect their resale value. Jalen now shares his flyer only in sneaker collector groups.

Competition: A shoe-care kiosk at the mall, a 20-minute drive away, cleans sneakers for $25 a pair and takes three days. Online stores sell do-it-yourself cleaning kits for about $12. No other sneaker-cleaning service operates at Jalen's school.

Costs: Jalen spent $140 of his own savings on brushes, cleaning solution and laces. Supplies for each standard clean cost about $3.

Source: Hypothetical sample project written for this practice question

Table 1. Results of Jalen's two-week flyer test

Where the flyer was shared	Students who saw it (estimate)	Orders	Customers who ordered again
Athletics locker room	120	6	1
Sneaker club group chat	45	13	8

Source: Hypothetical data written for this practice question

Suggested time: 25 minutes

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Part (A)

3 points

Pitch Laced Up. Cover four things: what the product is; who the target customer is; the problem, need or want it's meant to address; and why customers would find it valuable.

Your answer to part (A)

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Part (B)

1 point

Businesses typically formulate and test hypotheses about their target customers. Describe one reason a business would create a customer profile.

Your answer to part (B)

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Part (C)

4 points

Explain how Jalen tested a hypothesis about Laced Up's target customer. Cover four things: the hypothesis; the research method Jalen used; the evidence that came back; and how that evidence changed Jalen's decisions.

Your answer to part (C)

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Part (D(i))

1 point

Competition from established businesses may be a problem for entrepreneurs with a new idea. Describe one barrier to entry that an established business could use to keep new rivals out of its market.

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Part (D(ii))

1 point

Explain why competition does or does not represent a challenge to the viability of Laced Up. Your response should include evidence from the canvas that supports your explanation.

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