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11.5: Key Terms

  • Page ID
    50690
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    balance sheet
    financial statement that summarizes a company’s financial condition according to the accounting equation
    breakeven point
    level of operations that results in exactly enough revenue to cover costs
    business model
    plan for how venture will be funded; how the venture creates value for its stakeholders, including customers; how the venture’s offerings are made and distributed to the end users; and the how income will be generated through this process
    business model canvas
    developed by Osterwalder and Pigneur, used to develop a business model for a venture, including nine blocks that are mapped out to address customer segments, customer relationships, channels, revenue streams, value propositions, key partners, key activities, key resources, and cost structure
    business model innovation
    occurs when an existing business fundamentally changes their business model
    business plan
    formal document that typically describes the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives
    competitive matrix
    shows how and why a startup has a clear if not measurable competitive advantage for relevant features/benefits by weight according to customers, such as price and quality in relation to competitors
    customer empathy map
    portrayal of a target customer, the most promising candidate from a business’ customer segments, which explores the understanding of that person’s condition from their perspective to understand his or her problems and needs
    disruptive innovation
    process that significantly impacts the market by making a product or service more affordable and/or accessible often by smaller companies in an industry
    executive summary
    initial section of a business plan document that summarizes the key elements of the entire plan
    feasibility analysis
    feasibility analysis is the process of determining if a business idea is viable; it includes testing the viability of your product or service, evaluating your management team, assessing the market for your concept, and estimating financial viability
    financial analysis
    forecasts revenue and expenses; projects a financial narrative; and estimates project costs, valuations, and cash flow projections
    fixed costs
    costs that do not change, regardless of the amount of sales
    go-or-no-go decision
    determination to proceed with or abandon a plan or project
    innovation
    new idea, process, or product, or a change to an existing product or process
    lean model canvas
    developed by Ash Maurya as a derivation of the original business model canvas; this canvas differs by addressing unfair advantages, problems, solutions, and key metrics rather than customer relationships, key partners, key activities, and key resources
    market analysis
    analysis of the overall interest in the product or service within the industry by its target market
    projected cash flow
    outline of preliminary expenses, operating expenses, and reserves
    serviceable available market (SAM)
    portion of the market that a business can serve based on its products, services, and location
    social business model canvas
    modification of the business model canvas, designed for social entrepreneurship venues; new areas address impact measures around social impacts and its measurement, surplus, beneficiary segments and social and customer value propositions
    SWOT analysis
    strategic analytical tool used to help a potential venture or existing company identify its strengths, weaknesses, opportunities, and threats related to business competition
    total available market (TAM)
    total perceived demand for a product or service within the marketplace
    value proposition
    summary describing the benefits (value) customers can expect from a particular product or service
    value proposition canvas
    one of the nine blocks on the business model canvas, this additional tool developed by Osterwalder and Pigneur is designed to illustrate a deeper dive into customer understanding and value creation of a business
    variable costs
    costs that fluctuate with the level of revenue

    11.5: Key Terms is shared under a CC BY license and was authored, remixed, and/or curated by LibreTexts.

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