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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 the document; includes supporting information |
| Balance Sheet | A financial statement that captures the financial condition of the business at the particular moment |
| Barrier to (market) entry | Anything that blocks the way or makes it more difficult to enter a particular market |
| Bottom Line | Net outcome |
| 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 a 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 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 |
| Financial 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 shoes 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 communication 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 costumers and for managing customer relations in ways that benefit the organization and its stakeholders |
| Marketing Plan | A set of producers 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 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 accomplished another, 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 | Lon-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:
yazmin.f411
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