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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 of the end of a document: includes supporting informations |
| Balance sheet | A financial statement that captures the financial conditions 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 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 invesntment | The amount of money the business has invested inn its good 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 perform (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 form 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 |
| Laibilitites | Responsibilities of the business, especially legal responsibilities |
| Life cycle | The stages through which goods and services move form the time they are introduced on the market until 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, communication, 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 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 |
| Resurces | Any items 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:
joan.g020
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