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1.01 key terms
Nature of Business Plans
| Term | Definition |
|---|---|
| Accounting | The process of keeping and interpreting financial records. |
| Appendix | A segment added to the end of a document; included supporting information. |
| Balance sheet | A financial statement that captures the financial condition of the business at that particular moment. |
| Barrier to (market) entry | Anything that blocks the way or makes it more difficult to enter a particular market . |
| Bottom line | Net income |
| Business model | The company's method or plan for making money |
| Business plan | A company's blueprint for success; shows how the business works now and how it is intended to work in the future; the written business model. |
| Business structure | The company's configuration of employees for accomplishing specific business tasks; how the business is organized. |
| Capital investment | The amount of money the business has invested in its goods and other property. |
| Capital structure | The organization of the influx and outflow of the company's money, including where the money goes on a regular basis; how a business pays for its operations. |
| Cash flow | The movement of funds into and out of a business; determines the amount of cash the business has to work with at any given moment. |
| Cost estimate | A ball-park figure (or guess) of how much will be spent on a given activity. |
| Equity | Assets minus liabilities; also known as stockholders' (or shareholders') equity, book value, and net worth. |
| Executive summary | The most important part of a company's business plan because it gives an overview of the entire document; used to determine whether it is worthwhile to read any further. |
| Finance | The process of obtaining funds and using them to achieve the goals of the business. |
| Financial plan | The part of a company's business plan that shows how the business has performed (or is likely to perform) financially; how a business intends to use its money. |
| Financial resources | All the sources of money available to a business or project. |
| Financing costs | Funding a business activity or project through debt, equity. or venture capital. |
| Fixed assets | Items of value a business owns that are not expected to change, e.g. buildings. |
| Funding | Money available to a business from one or more sources. |
| Human resources | People who work to produce goods and services. |
| Income statement | A financial summary that shows how much money the business has made or has lost over a period of time; also called the profit-and-loss statement. |
| Letter of intent | A document communicating what a person or business intends to do within (or during) a specific timeframe. |
| Liabilities | Responsibilities of the business, especially legal responsibilities. |
| Life cycle | The stages through which goods and services move from the time they are introduced on the market until they are taken off the market. |
| Management | The process of coordinating resources in order to accomplish an organization's goals. |
| Market analysis | A systematic study of the market. |
| Market position | The rank of a particular business in a specific market. |
| Marketing | An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relations in ways that benefit the organization and its stakeholders. |
| Marketing plan | A set of procedures or strategies for attracting the target customer to a business. |
| Niche | The small segment of the total market interested in a subject. |
| Operations | The day-to-day activities required for continued business functioning. |
| Physical resources | Material items used to accomplished another activity. |
| Product | The good, service, or idea a business offers its customers. |
| Product development | The efforts involved in the creation of a new product. |
| Product promotion | A type of promotion that aims to persuade consumers to buy a good or service. |
| Profit | Monetary reward a business owner receives for taking the risk involved in investing in a business; income left once all expenses are paid. |
| Resources | Any item that is used to accomplish another activity, such as producing/providing goods and services. |
| Return on equity | Financial ratio calculated by dividing net income by book value. |
| Return on investment | Financial ratio calculated by dividing net profit by investment. |
| Risk management plan | A business document that involves the planning, controlling, preventing, and procedures involved in limiting business losses; optimizes the relationship of potential loss to gain. |
| Royalties | A percentage of actual sales that a licensee pays to a licensor; usually anywhere from 5 to 15 percent. |
| Sales Volume | The amount of a firm's sales; usually expressed in dollars. |
| Strategic plan | Long-range plan for the company as a whole; usually three to five years out. |
| Strategy | Plan of action for achieving goals and objectives |
| Table of contents | The portion of a document in which the sections are listed with their page numbers for easy access. |
| Target market | The particular group of customers a business seeks to attract. |
| Third-party agreement | Legal or financial arrangement in which two companies do business through (or using) a third company. |
| Venture | A business or business project, usually new. |
Created by:
Jay.l
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