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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; includes 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; 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 time |
| cost estimate | A ball-park figure(or guess) of how much will be spent on a given activity |
| equity | Assets minus liabilities; also know 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 or 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-lost 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 accomplish 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 customers 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 license 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 to companies do business through(or using) a third company |
| Venture | A business or business project, usually new |
Created by:
Izamar.r123
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