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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 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 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 operation |
| 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 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 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 systemic 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 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 | materials 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 | money reward a business owner receive for taking the risk involved in investing 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 or 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 companu |
| Venture | A business or business project, usually new |
Created by:
Brihana1
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