Entrepreneurship I

2.0 Vocabulary

  1. Ambiguity
/ Words or phrases with either a double meaning.
  1. Analogies
/ Similarity of like features of two things. (Ex. Comparing)
  1. Antitrust
/ Of or relating to legislation preventing or controlling trusts or other monopolies, with the intention of promoting competition in business.
  1. Associations
/ A mental connection or relation between thoughts, feelings, ideas or sensations.
  1. Attribute Listing
/ Focuses on an attribute or an object in order to determine how the attribute can be improved. (Ex. Cell phone features.)
  1. Benefit
/ The personal satisfaction or advantage that a customer wants from a product.
  1. Brainstorming
/ A creative group problem-solving technique that involves generating a large number of fresh ideas.
  1. Break-even Point
/ The amount of sales or revenues that it must generate in order to equal its expenses. In other words, it is the point at which the company neither makes a profit nor suffers a loss.
  1. Business Concept
/ A clear and concise description of a business opportunity; it contains four elements: the product or service, the customer, the benefit, and the distribution.
  1. Business Ethics
/ Applying principles of right and wrong to situations in the workplace.
  1. Business Model
/ A description of how entrepreneurs plan to make money with their business concepts.
  1. Business Plan
/ A document that describes a new business and a strategy to launch that business.
  1. Chamber of Commerce
/ A local association to promote and protect the interests of the business community in a particular place.
  1. Circumstantial Discovery
/ Occurs when an observation is made based on specific knowledge of time, place, or circumstance.
  1. Code of Ethics
/ A systematic set of rules and procedures used to guide the behavior of an individual, a business, or a culture.
  1. Company Description
/ Section of the business plan outlines the company’s background information and basic business concept.
  1. Competition
/ The rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market-share growth.
  1. Competitive Analysis
/ Section of the business plan should demonstrate that the proposed business has an advantage over its competitors.
  1. Competitive Grid
/ A tool for organizing important information about a business venture’s competition.
  1. Consensus
/ Agreement among a group of people.
  1. Consumer Spending
/ The amount of money spent by households in an economy.
  1. Culture
/ Consists of the beliefs, behaviors, objects, and other characteristics common to the members of a particular group or society.
  1. Currency Rate/Exchange Rate
/ The price of a nation's currency in terms of another currency. An exchange rate thus has two components, the domestic currency and a foreign currency, and can be quoted either directly or indirectly.
  1. Deflation
/ A general decline in prices, often caused by a reduction in the supply of credit or money. Can also be caused by a decrease in government, personal or investment spending. Has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.
  1. Demographic
/ The physical and social characteristics of the population.
  1. Depression
/ A state of the economy resulting from an extended period of negative economic activity as measured by GDP. It is often described as a more severe form of a recession that leads to extended unemployment, a spike in credit defaults, broad declines in income and production, currency devaluation and a deflationary economy.
  1. Direct Channel
/ The means of delivering a service or product directly to the customer, such as via a Web site.
  1. Direct Competitors
/ Another company that offers the same products and services aimed at the same target market and customer base, with the same goal of profit and market-share growth.
  1. Distribution Channel
/ Distribution channel the means by which a product or service is delivered to the customer.
  1. Economic Crisis
/ A situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis. An economy facing an economic crisis will most likely experience a falling GDP, a drying up of liquidity and rising/falling prices due to inflation/deflation. An economic crisis can take the form of a recession or a depression. Also called real economic crisis.
  1. Economic Factors
/ Relates to changes such as costs and prices of goods, interest rates, wage rates, exchange rates and the rate of inflation. These all affect the ability of businesses to generate profits and need close monitoring.
  1. Economic Sanctions
/ Domestic penalties applied unilaterally by one country (or multilaterally, by a group of countries) on another country (or group of countries). Economic sanctions may include various forms of trade barriers and restrictions on financial transactions.
  1. Economy
/ Activities related to the production and distribution of goods and services in a particular geographic region; The correct and effective use of available resources.
  1. Entrepreneurial Discovery
/ The process of systematically scanning for technological, political and regulatory, social, and demographic changes to discovery opportunities to produce new goods and services.
  1. Environmental Factors
/ Includes everything that changes the local environment. This includes natural forces like weather and human effects like non-biodegradable litter.
Some environmental changes are visible, such as a landslide caused by heavy rains. Other changes are not as easy to see. For example, some geologic change, like sediments becoming sedimentary rock, is too slow for the eye to see. Occasionally, only the effects of environmental change are visible and we have to search to find the cause, as in the receding of glaciers caused by climate change.
  1. Environmental Scanning
/ An analysis and evaluation process that businesses use to understand their current environment.
  1. Ethical Behavior
/ Knowing the difference between right and wrong and consciously choosing to do right.
  1. Ethics
/ Guidelines for human behavior; the study of moral choices and values; choosing between right and wrong.
  1. Executive Summary
/ A brief recounting of the key points contained in a business plan.
  1. Feasibility Analysis
/ The process used to test a business concept.
  1. Feature
/ A physical characteristic or quality of a product.
  1. Financial Plan
/ Financial Plan-presents past and current finances and financial forecasts and explains the assumptions made when calculating forecast figures.
  1. Fixed Costs
/ Costs that must be paid regardless of how much of a good or service is produced. (Ex: Lease, Insurance, salaries)
  1. Free Enterprise Economic System
/ An economic system where few restrictions are placed on business activities and ownership. In this system, governments generally have minimal ownership of enterprises in the market place. This system aims for limited restrictions on trade and minimal government intervention.
  1. Government
/ The governing body of a nation, state, or community; the system by which a nation, state, or community is governed.
  1. Gross Margin
/ The difference between revenue and cost of goods sold, or COGS, divided by revenue, expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, essentially).
  1. Gross Profit
/ A company's revenue minus its cost of goods sold.
  1. Growth Plan
/ Growth Plan-looks at how the business will expand in the future.
  1. Incorporation Fees
/ The fee you must pay to the state or government to corporate a business.
  1. Indirect Channel
/ The means of delivering a service or product indirectly to the customer, such as through a wholesaler.
  1. Industry
/ A group of businesses with a common interest.
  1. Inflation
/ A general increase in prices and fall in the purchasing value of money.
  1. Inventory
/ A complete listing of merchandise or stock on hand, work in progress, raw materials, finished goods on hand, etc., made each year by a business concern.
  1. Lateral Thinking
/ Solving problems through an indirect or creative approach. (Ex. Thinking outside of the box.)
  1. Marginal Benefit
/ Measures the advantages of producing one additional unit of a good or service.
  1. Marginal Cost
/ Measures the disadvantages of producing one additional unit of a good or service.
  1. Markdown
/ The amount of money taken off an original price (price * markdown percentage = $ markdown; price – markdown = sales price).
  1. Market Analysis
/ Section of the business plan presents your research on the customer profile gathered from primary and secondary marketing research resources.
  1. Market Opportunity
/ Newly identified need, want, or demand trend that a firm can exploit because it is not being addressed by the competitors.
  1. Marketing Objectives
/ Goals set by a business when promoting its products or services to potential consumers that should be achieved within a given time frame.
  1. Mission Statement
/ A declaration of the specific aspirations of a company, the major goals for which it will strive.
  1. Operating Expenses
/ A category of expenditure that a business incurs as a result of performing its normal business operations. (Ex: Production cost (raw materials, utilities, man hours); Inventory (also, storage and transportation of inventory); Salaries and Benefits; and Advertising and Marketing
  1. Opportunity Cost
/ The cost of choosing one opportunity or investment over another.
  1. Overhead Expense
/ All costs on the income statement except for direct labor, direct materials, and direct expenses. (Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.)
  1. PEST
/ Political, Economic, Social, and Technological
Classic situational analysis headings, guaranteed to prompt nods of approval when used in business presentations.
  1. Product Mix
/ All the products a company makes or sells.
  1. Promotional Budget
/ A specified amount of money set aside to promote a business' or organization's products or beliefs.
  1. Promotional Material
/ Any combination of media that provides participants with descriptive information regarding the learning activity. Materials can include brochures, email announcements, website and direct mail, to name a few.
  1. Prospect List
/ Potential customer or client qualified on the basis of his or her buying authority, financial capacity, and willingness to buy. Also called sales lead.
  1. Prototype
/ A working model used by entrepreneurs to determine what it takes to develop their products or services.
  1. Publicity Plan
/ A strategy that is specifically designed to capture the media's attention.
  1. Psychographics
/ Personality, opinions, and lifestyle elements, including activities and interests.
  1. Raw Materials
/ The basic material from which a product is made.
  1. Recession
/ Period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant (not increasing) wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. Although recessions are considered a normal part of a capitalist economy, there is no unanimity (unity) of economists on its causes.
  1. Reverse Engineering
/ Examining a completed product with the intent of understanding the technology and process used in its design, manufacture, or operation.
  1. Sales Forecast
/ The process of a company predicting what its future sales will be.
  1. Sales Lead
/ A prospective consumer of a product or service that is created when an individual or business shows interest and provides his or her contact information. Businesses gain access to sales leads through advertising, trade shows, direct mailings and other marketing efforts.
  1. Sales Report
/ A record of calls made and products sold during a particular time frame kept by a salesperson or their management. For example, a typical sales report might incorporate data on (1) sales volume observed per item or group of items, (2) how many new and current accounts were contacted and when, and (3) any costs that were involved in promoting and selling products.
  1. Sales Territory
/ The customer group or geographical area for which an individual salesperson or a sales team holds responsibility. Territories can be defined on the basis of geography, sales potential, history, or a combination of factors.
  1. Scientific Discovery
/ Occurs when a physical or technological observation is made.
  1. Semi-Variable Cost
/ A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded. (An example is labor, which is fixed for 40 hours then variable as overtime is paid.)
  1. Service Corps of Retired Executives (SCORE)
/ A non-profit organization dedicated to entrepreneurs' education and the success of small business. It is sponsored by the SBA to provide consulting to small businesses.
  1. Situation Analysis
/ Refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment.
  1. Six (6) Thinking Hats Technique
/ A simple, effective parallel thinking process that helps people be more productive, focused, and mindfully involved.
  1. The White Hat calls for information known or needed. "The facts, just the facts."
  2. The Yellow Hat symbolizes brightness and optimism. Under this hat you explore the positives and probe for value and benefit.
  3. The Black Hat is judgment - the devil's advocate or why something may not work. Spot the difficulties and dangers; where things might go wrong. Probably the most powerful and useful of the Hats but a problem if overused.
  4. The Red Hat signifies feelings, hunches and intuition. When using this hat you can express emotions and feelings and share fears, likes, dislikes, loves, and hates.
  5. The Green Hat focuses on creativity; the possibilities, alternatives, and new ideas. It's an opportunity to express new concepts and new perceptions.
  6. The Blue Hat is used to manage the thinking process. It's the control mechanism that ensures the Six Thinking Hats guidelines are observed.

  1. Small Business Administration (SBA)
/ Created in 1953, it is an independent agency of the U.S. federal government that aids, counsels, assists, and protects the interests of small business.
  1. Society
/ The community of people living in a particular region and having shared customs, laws, and organizations.
  1. STEEP
/ Social, Technological, Economic, Ecological, and Political
General awareness of the industry or service area you operate in
  1. SWOT
/ Strengths, Weaknesses, Opportunities, and Threats
(specific analysis of your own business)
  1. Target Customers
/ People most likely to buy a business’s products and services.
  1. Target Market
/ A particular group of consumers at which a product or service is aimed.
  1. Tariff
/ A tax or duty to be paid on a particular class of imports or exports.
  1. Technology
/ The application of scientific knowledge for practical purposes, esp. in industry; machinery and equipment developed from such scientific knowledge.
  1. Trade Agreement
/ (also known as trade pact) is a wide ranging tax, tariff and trade treaty that often includes investment guarantees.
  1. Trade Association
/ An association of people or companies in a particular business or trade, organized to promote their common interests.
  1. Trade Regulation
/ A field of law, often bracketed with antitrust (as in the phrase “antitrust and trade regulation law”), including government regulation of unfair methods of competition and unfair or deceptive business acts or practices. Antitrust law is often considered a subset of trade regulation law.
  1. Trade Show
/ An exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products, service, study activities of rivals and examine recent market trends and opportunities.
  1. Value Chain
/ The distribution channel through which a product or service flows from the producer to the customer.
  1. Variable Costs
/ Costs that go up and down depending on the quantity of the good or service produced. (Ex: Material, labor, and utilities.)
  1. Venture
/ Is a business undertaking involving risk.
  1. Vision Statement
/ Vision statement a declaration of the scope and purpose of a company.