Bills to be paid as part of the normal course of business; also called creditors
Debts owed to your company, usually from sales on credit; also called debtors
Total accumulated depreciation reduces the formal accounting value (called book value) of assets
Short-term assets minus accounts receivable and inventory, divided by short-term liabilities
The incremental costs involved in obtaining a new customer
An organization that is able to respond to and address changes in their market, their environment, and/or their industry to better position themselves for survival and profitability
Capital needed in the earliest stages of the venture's creation before the product or service is available to be provided
A business entity that negotiates, purchases, and/or sells, but does not take title to the goods
Sales divided by total assets
Property that a business owns, including cash and receivables, inventory, etc. Assets are any possessions that have value in an exchange
The financial statement that shows the assets, liabilities, and capital of an entity at a particular date
A standard or guideline used to compare some aspect of a business to some objective or external standard measure
A name, term, sign, symbol, design, or a combination of all used to uniquely identify a producer’s goods and services and differentiate them from competitors
The added value a brand name identity brings to a product or service beyond the functional benefits provided
The practice of using a current brand name to enter a new or different product class
Positions a customer’s relative perceptions of one brand to other competitive alternatives
A standard financial analysis that measures general risk for a company by showing the sales level needed to cover both fixed and variable costs
The unit sales volumes or actual sales amounts that a company needs to equal its running expense rate and not lose or make money in a given month
An intermediary that serves as a go-between for the buyer or seller
The practice of marketing two or more product or service items in a single package with one price
Personnel burden: the sum of employer costs over and above salaries, including employer taxes, benefits, etc.
A brief description of an organization’s purpose with reference to its customers, products or services, markets, philosophy, and technology
The written document that details a proposed or existing venture
An agreement designed to address situations in which one or more of the entrepreneurs wants to sell their interest in the venture
U.S. - the standard type of corporation within the United States
Compound average growth rate
The undesirable tradeoff where sales of a new product or service decrease sales from existing products or services and minimize or detract from the total revenue contribution of the organization
Long-term assets, also known as Plant and Equipment, or fixed assets. These terms are interchangeable
Spending on capital assets, also called plant and equipment, or fixed assets, or long-term assets
New money being invested in the business, not as loans or repayment of loans, but as money invested in ownership. Also called investment or new investment
Normally, dollar bills and coins; in a business plan, bank balance, or checking account balance
An accounting system that doesn't use the standard accrual accounting, but records only cash receipts and cash spending. Usually not an acceptable basis for business accounting
Change in the cash balance
A budget that provides an overview of cash inflows and outflows during a specified period of time
One of the three main financial statements, this shows actual cash inflows and outflows of the business over a specified period of time. The Cash Flow Statement reconciles Income Statement with the Balance Sheet
Sales made in cash, or with credit cards, or by check. The opposite of Sales on Credit
Money a business spends when it pays obligations immediately instead of letting them wait for a few days first
An entrepreneurial model that considers the positives and negatives of three areas of the venture; founder(s), opportunities, and resources
A situation where one or more channel members believe another channel member is engaged in behavior that is preventing it from achieving its goals
The system whereby customers are provided access to an organization’s products or services
The pairing of two manufacturers' brand names on a single product or service
Abbreviation for cost of goods sold: traditionally, the costs of materials and production of the goods a business sells
The average number of days a business waits between delivering an invoice and receiving payment
The average number of days that pass between delivering an invoice and receiving the money
Compensation paid based on sale of a product; commonly calculated on a percentage basis
An assumed percentage used to calculate commissions expense as the product of commission percent multiplied by sales, gross margin, or related sales items
A strategic development whereby customers will choose a firm’s product or service over its competitors based on significantly more favorable perceptions or offerings
Assessing and analyzing the comparative strengths and weaknesses of competitors
Strategic competitive advantages and justification for entering an established market or activity that provides recognizable and known value
A process that occurs when a single target market segment is pursued
In a product or product line, the difference between total sales revenue and total variable costs; for a whole company or across a group or product line, gross margin less sales and marketing expenses
In a product or product line, the difference between total sales revenue and total variable costs; for a whole company or across a group or product line, gross margin less sales and marketing expenses
A statement that communicates the predominant 'reason to buy' to a specific target market
A legal entity with various rights and obligations defined by local and national law
When an entrepreneurial venture has significantly changed its focus from the initial concept of the venture in response to its market
The costs of materials and production of the goods a business sells
The costs directly associated with producing the service or product sold; same as cost of goods sold
Change in the quantity demanded of one product or service impacting the change in demand for another product or service
Assets which last less than five years or are depreciated over terms of less than five years, also called Short-term Assets
Short-term debt, short-term liabilities
Short-term debt, short-term liabilities
"Doing Business As" a company name, also commonly called a "Fictitious business name"
The sum of liabilities and capital, always equal to total assets
The estimated loss of asset value over time
Simultaneously pursuing several different market segments, usually with a different strategy for each
An approach to create a competitive advantage based on obtaining a significant value difference that customers will appreciate and be willing to pay for
Traditionally, the costs of materials and production of the goods a business sells, or the costs of fulfilling a service for a service business; Cost of Goods Sold in product-based businesses
A form of direct marketing that involves sending information through a mail process, physical or electronic, to potential customers
Any method of distribution that gives the customer access to an organization’s products and services without intermediaries
Computer term: in IBM and compatible computers, disk storage space is divided into directories
Strengths or qualities providing superior and unique customer value that distinguish a corporation from competitors
Developing or acquiring new offerings and/or the introducing those offerings to untapped target markets
Money distributed to owners of a business as profits
DBA: using a company name separate from that of the owner, also commonly called a "Fictitious business name"
Simultaneously distributing products or services through two or more marketing channels that may or may not compete for similar buyers
from Everett Rogers: type of buyers who follow "innovators" rather than be the first to purchase
from Everett Rogers: buyers interested in new technology who wait to purchase until these innovations are proven to perform to the expected standard
The famous "bottom line": sales less costs of sales and expenses).
Gross Margin less Operating Expenses less Interest
Earnings before interest and taxes
Benefit allowed when larger production volumes spread fixed costs over more units, lowering the average unit costs
When prospective buyers have the willingness and ability to purchase an organization's offerings
The effective tax rate is a comparison of final tax payments compared to actual profits
Entrepreneur in Heat: one who continues to develop new products and services beyond what the venture can support and inadvertently diminishes the effectiveness of the venture's primary revenue streams
Business ownership; capital
The sales of some portion of ownership in a venture to gain additional capital for start-up
The process of considering ideas versus opportunities, and then screening those opportunities using objective criteria as well as personal criteria
Author who studied and published work on the diffusion of innovation
Selling products or services in only one retail outlet in a specific geographical area
A nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan.
An item or service paid for: expenses are deductible against taxable income, assets are not
The idea that increasing familiarity with a product or process results in enhanced efficiency and operations advantage over time
The concept that if a venture can just get 2% of total market share it will be successful
Adding a new brand to confront competitive brands in an established product category
Advantages accruing to the first person or group in a niche
Disadvantages accruing to the first person or group in a market niche
The accounting year: it can begin in any month, and is numbered according to the year in which it ends
Porter: model of economic forces in a competitive climate
Running costs that take time to wind down: usually rent, overhead, some salaries
Small groups of people (usu. 9 to 12), representing target audiences, brought together to discuss a topic that will offer insight for product development and/or marketing efforts
Activities which encourage repeat purchasing through a formal program enrollment process to develop loyalty and commitment from the customer base
Costs that consider variable and fixed cost (total cost) in the pricing of a product of service
Projecting the future value of a venture and/or an investment in the venture
A recorded asset representing the (positive) difference between a company's stated value and the actual, higher, purchase price
The difference between total sales revenue and total cost of goods sold, also called total cost of sales
Gross margin divided by sales, displayed as a percentage
An inverse approach to traditional marketing budgeting
Using limited resources to meet the needs of existing customers, while creating additional awareness within the market
Mini tools: canvassing, personal letters, calls, circulars, brochures, classified ads. Maxi tools: yellow pages and signs. Non-Media tools: public relations, advertising
Usually, selling a business or product line
Ideas are the basis of potential business opportunities
A financial statement that shows sales, cost of sales, gross margin, operating expenses, and profits or losses, also called Profit and Loss statement
A corporation's initial efforts of raising capital through the sale of securities on the public stock market
The determination if an innovation is a "new and improved" concept taken to the next level (evolutionary), or the rare innovation that revolutionizes a technology or concept to the product or services
from Everett Rogers: the first group to purchase a new product or service
The practice of blending different elements of the communication mix in mutually reinforcing ways
When a producer attempts to sell its products or services in as many retail outlets as possible within a geographical area without exclusivity
Interest is paid on debts, and interest expense is deducted from profits as expenses
Organizationally supported, entrepreneurial-based activities within a corporation for the purpose of an innovative new business experience within the organization itself
Goods in stock, either finished goods or materials to be used to manufacture goods
Total cost of sales divided by inventory
Intermediary who buys from producers to sell to retailers and offers various services with that function
The labor costs associated with making goods to be sold
from Everett Rogers: the risk-averse group that follows the late majority. They are generally not interested in new technology and are the last group of customers to buy
Leveraged Buy-out: A type of purchase of a business that relies heavily on the venture's cash receipts with expectations of positive cash flow continuing based on historical or other performance indicators
A type of purchase of a business that relies heavily on the venture's cash receipts with expectations of positive cash flow continuing based on historical or other performance indicators
Debts; money that must be paid
A model depicting the sales volume cycle of a single product, brand, service or a class of products or services over time described in terms of the four phases of introduction, growth, maturity and decline
U.S.- A type of corporation which varies by state, similar to but newer and harder to establish than an S Corporation
U.S.- Limited Liability Company: A type of corporation which varies by state, similar to but newer and harder to establish than an S Corporation
Assets such as plant and equipment that are depreciated over terms of more than five years, and are likely to last that long, too. Also called Fixed Assets
The interest rate charged on long-term debt
This is the same as long-term loans
An accounting concept, the exact opposite of profit, normally the bottom line of the Income Statement / Profit or Loss statement
Activities designed to encourage repeat purchasing through a formal program enrollment process and the distribution of benefits
An agent who typically operates on an extended contractual basis, often sells in an exclusive territory, offers non-competing but related lines of goods, and has defined authority regarding prices and terms of sale
In a product or product line, the difference between total sales revenue and total variable costs; for a whole company or across a group or product line, gross margin less sales and marketing expenses
The difference between total sales revenue and total cost of goods sold, also called total cost of sales
Prospective buyers, individuals or organizations, willing and able to purchase the organization’s potential offering
Monetary resources a company invests to assist channel members increase volume sales of their products or services
Changes in primary demand for a product class and changes in technology
Changes in the offering demanded by buyers or promoted by competitors to enhance its perception and associated sales
The maximum level of sales that might be available to all organizations serving a defined market in a specific time period
The categorization of potential buyers into groups based on common characteristics such as age, gender, income, and geography or other attributes relating to purchase or consumption behavior
Total sales of an organization divided by the sales of the market they serve
A product-market strategy whereby an organization introduces its offerings to markets other than those it is currently serving
The set of planned activities designed to positively influence the perceptions and purchase choices of individuals and organizations
A comprehensive and systematic examination of a company’s or business unit’s marketing environment, objectives, strategies, and activities with a view of identifying and understanding problem areas and opportunities, and recommending a plan of action to it
Activities controllable by the organization, including the product, service, or idea offered, the manner in which the offering will be communicated to customers, the method for distributing or delivering the offering, and the price to be charged for it
Assigning or allocating costs to a specified marketing activity or entity in a manner that accurately captures the financial contribution of activities or entities to the organization
A product market strategy whereby an organization seeks to gain greater dominance in a market in which it already has an offering
Items involved in the assembly or manufacture of goods for sale, included in the cost of sales
A statement that captures an organization’s purpose, customer orientation and business philosophy
A statistical method to forecast the future based on past results
A channel of distribution that uses a combination of direct and indirect channels where the channel members serve different segments
This is the projected change in cash position, an increase or decrease in cash balance
Method of discounting future streams of income using an expected rate of return to evaluate the current value of expected earnings
The operating income less taxes and interest. The same as earnings, or net income
The remainder after cost of goods sold, other variable costs revenue, or simply, total revenue minus total cost
This is the same as assets minus liabilities, and the same as total equity
The development of a new brand and often a new offering for a product class that has not been previously served by the organizations
A negative response to innovations and inventions from sources outside the venture's own research and development activities
Net Present Value: Method of discounting future streams of income using an expected rate of return to evaluate the current value of expected earnings
Business costs or expenses that need to be paid, but wait for a time as Accounts Payable instead of being paid immediately
Total benefits or satisfaction provided to target markets by an organization
The complete array of an organization’s offerings, including all products and services
Expenses incurred in conducting normal business operations. May include wages, salaries, administrative and R&D costs; excludes interest, depreciation, and taxes
The extent to which fixed costs and variable costs are used in the production and marketing of products and services
Assessing how well an organization performs marketing activities as it seeks to achieve planned outcomes
Identifying and exploring revenue enhancement or expense reduction situations to better position the organization to realize increased profitability, efficiencies, market potential or other desirable objectives
Potential benefits foregone as a result of choosing an alternative course of action
Used when the initial producer of a product or service enters into an agreement to allow another entity to include, remanufacture, or label products or services under their own name and sell through their distribution channels
Current Assets that aren't cash, liquid investments, Accounts Receivable, or Inventory. For example: signage, temporary shelving, chairs and tables
Short-term debts that don't cause interest expenses
Purchasing an item or a service from an outside vendor to replace performance of the task with an organization’s internal operations
Real money paid into the company as investments
Generally formed by two or more persons as co-owners, not a separate legal entity; partners are personally liable for actions and debts
A shortened version of Accounts Payable, bills to be paid as part of the normal course of business
The number of years required for an organization or a project to recapture an initial investment
The average number of days that pass between receiving an invoice and paying it
The number of days on average a business waits between receiving a bill and paying a bill
Wages, salaries, employee compensation.
Payroll taxes and benefits, calculated using a percentage assumption that is applied to payroll
Setting a relatively low initial price for a new product or service
Extent to which a customer or client is uncertain about the consequences of an action, often relating to purchase decisions
Illustration of customers' perceptions of competing products, comparing select attributes based on market research
The use of face-to-face communication between the seller and buyer
Payroll taxes and benefits, calculated using a percentage assumption that is applied to payroll
The same as long-term, fixed, or capital assets
A retail in-store presentation that displays product and communicates information to retail consumers at the place of purchase
Orchestrating an organization’s offering and image to occupy a unique and valued place in the customer’s mind relative to competitive offerings