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Business LibreTexts

Glossary

  • Page ID
    54096
    • Michael Laverty and Chris Littel et al.
    • OpenStax

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    Example and Directions
    Words (or words that have the same definition) The definition is case sensitive (Optional) Image to display with the definition [Not displayed in Glossary, only in pop-up on pages] (Optional) Caption for Image (Optional) External or Internal Link (Optional) Source for Definition
    (Eg. "Genetic, Hereditary, DNA ...") (Eg. "Relating to genes or heredity") The infamous double helix https://bio.libretexts.org/ CC-BY-SA; Delmar Larsen
    Glossary Entries
    Word(s) Definition Image Caption Link Source
    absolute capacity highest volume of units that a machine can produce within a specified time period        
    accounting system of recording and classifying a company’s financial transactions and summarizing and communicating those transactions in the form of financial statements        
    accounting equation assets = liabilities + equity        
    accounts payable account that includes vendors that the company owes money to        
    accounts receivable account that includes customers that owe the business money        
    action plan organized, step-by-step outline or guide that pulls together the ideas, thoughts, and key steps necessary to help set the stage for entrepreneurial success        
    adaptive model method of entrepreneurial problem solving that seeks solutions in ways that are tested and known to be effective        
    advertising mass communication that allows companies to reach a broad audience through TV, radio, newspaper, Internet, magazines, and outdoor ads        
    advisory board group of advisors that helps an organization make strategic decisions about the business, and brings certain knowledge and experience that can bring a new perspective on issues without having the actual authority to vote or govern        
    anchoring strategies in the ethical context, the process of making ethics a foundation (anchor) of your business so that decision makers act keeping in mind key ethical considerations        
    angel investor wealthy, private individual seeking investment options with a greater potential return than is generally available with traditional publicly traded stocks        
    antitrust laws prevent companies from abusing position or power in the market through exclusion or limitation of competitor access to the market        
    ask specific amount of money or type of assistance requested in a pitch        
    assessment lean problem-solving process phase in which the entrepreneur experiments and analyzes the potential process and its capabilities        
    assets items a business owns and derives future use from        
    B corporation business that meets a very high standard of social and environmental performance, public transparency, and accountability to balance profit with social purpose        
    balance sheet financial statement that summarizes a company’s financial condition according to the accounting equation        
    balance sheet financial statement that summarizes a company’s financial condition according to the accounting equation        
    bartering exchanging goods or services for other goods or services instead of for cash        
    baselining internal comparison of actual outcomes with expected outcomes        
    benchmarking comparing one’s own company’s performance with an industry average, a leader within the industry, or a market segment        
    bootstrapping funding strategy that seeks to optimize use of personal funds and other creative strategies (such as bartering) to minimize cash outflows        
    born global venture seeking to be a global company from its inception        
    brainstorming generation of ideas in an environment free of judgment or dissension with the goal of creating solutions        
    brand image a company promotes and the connotations it fosters of itself and its products        
    brand advocate someone who is a fan of your products and passes on the word to others        
    brand strategy image a company conveys to its customers        
    breakeven point level of operations that results in exactly enough revenue to cover costs        
    build-measure-learn loop step-by-step approach on how to maneuver a startup, how to change course if necessary, how to persevere, and how to accelerate the expansion of a business        
    bundling bundle of products that is discounted to encourage customers to buy in bulk        
    burn rate rate at which cash outflow exceeds cash inflow        
    business accelerator organization formed by an alliance of business professionals who assist entrepreneurs in their startup or early stage businesses in exchange for an equity investment in the entrepreneur’s company        
    business ethics conduct by which companies and their agents abide by the law and respect the rights of their stakeholders, particularly their customers, clients, employees, and the surrounding community and environment        
    business failure ending a business due to the lack of goal attainment, which can include low levels of revenue and profit, or not meeting investors’ expectations        
    business incubator organization formed by a consortium of established professionals or organizations assisting startup or early stage businesses that provides office space, financial support, technical support, or advisors whose specialized skills in management and marketing complement the technical talents of the entrepreneur        
    business lifecycle stages companies go through: birth, growth (or expansion to new markets and products), maturity, decline, death or rebirth        
    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        
    business purpose reason the entrepreneur forms the company and determines who benefits from it, whether it is the entrepreneur, customers, or some other entity        
    business structure legal organization of a business; also called entity selection        
    buyback clause legal agreement regarding an exit by a founding team member prior to the harvesting of the venture        
    C corporation corporation taxed the corporate level, and then again on the owners’ personal income tax returns if corporate income is distributed to the shareholders as dividends        
    capital money raised for operating a business        
    capital expense major purchase of a functional asset that is expected to last longer than three years or that still has financial value after being fully depreciated        
    capital improvements major repairs or improvements that add to the life of an asset by improving its longevity, increasing its value or productivity, or extending its usefulness        
    capitalism system in which individuals, people, and companies have the freedom to make decisions and own property as well as benefit from their own efforts, with government playing a secondary role in oversight        
    career entrepreneur someone who takes on the daily management as the owner of the venture, accepting, and perhaps enjoying, the daily risks and rewards of managing and building the venture        
    cash flow money collected by the business through revenue and funding versus money disbursed by the business through expenses        
    cash management management of cash inflows and outflows to support cash needs of the venture        
    causal research identification of cause-and effect-relationships between two or more variables        
    charitable organization nonprofit company founded for altruistic purposes        
    clarify first step of the creative process, which involves recognizing the existence of a gap between the current state and a desired state        
    close step in the sales process in which the salesperson asks for and gets the sale        
    closed group formal, structured group of individuals who have a strict process or specific criteria that applicants must meet before being accepted as members        
    code of conduct formal statement that provides guidance on how ethical conduct is demonstrated        
    collateral something of value pledged to secure a loan        
    communication skills skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage        
    company culture shared beliefs, values and assumptions held by people regarding how to behave or conduct themselves within the context of fitting into an organization        
    competitive advantage describes your venture’s unique benefits that poise it for growth        
    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        
    conflict of interest when an individual or organization has interests in multiple areas that come into conflict with each other        
    conjoint analysis survey tool in which respondents must rank, choose, or a rate a number of “conjoint,” or linked, features or benefits        
    contribution margin gross profit from a single item sold        
    copyright grants the creator of a work the exclusive right to reproduce the work, typically for a specified period of time        
    copyright grants the creator of a work the exclusive right to reproduce the work, typically for a specified period of time        
    corporate entrepreneurship development of new ideas, opportunities, or ventures through formal research and development processes that focused on the corporation’s strategy and goals        
    corporate narrative story about how a successful company grew from something small into something broad and powerful, serving thousands or even millions of people; it may have marketing purposes, and it may serve as an inspirational story for leaders and employees        
    corporate social responsibility (CSR) practice in which a business views itself within a broader context, as a member of society with certain implicit social obligations and responsibility for its own effects on environmental and social well-being        
    corporation complex business structure created by filing the appropriate documents with the state of incorporation        
    cost of goods sold cost required to produce the product or service        
    cost-led pricing easiest way to price a product by taking the cost of making the product and marking it up to create profit        
    creative destruction theory developed by Joseph Schumpeter stating that entrepreneurial innovation is the disruptive force that creates and sustains economic growth, though in the process, it destroys established companies and disrupts employment        
    creative destruction theory developed by Joseph Schumpeter stating that entrepreneurial innovation is the disruptive force that creates and sustains economic growth, though in the process, it destroys established companies and disrupts employment        
    creativity development of original ideas        
    creativity development of original ideas        
    credit lending of funds in exchange for a promise to repay        
    creditworthiness lender’s assessment of how reliable a company is in repaying a debt        
    critical thinking complex analysis of a problem or issue with the goal of solving the problem or making a decision        
    crowdfunding financing with investments of small amounts of money from a large number of people        
    crowdsourcing teams of amateurs and non-experts working together to form a solution to a problem        
    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        
    customer-led pricing pricing led by what the customer is willing to pay        
    customers people the business will be serving, including potential customers from one or more market segments        
    data analysis process of analyzing data and modeling the data into a structure that leads to innovative conclusions        
    debt financing borrowing funds that must be repaid, usually with interest        
    debt service repayment of a loan, including principal and interest        
    decision tree flowchart diagram used to explore the outcomes of different decisions        
    decisiveness ability to make a quick, effective decision, not letting too much time go by in the process        
    Delphi method group decision-making process that includes a diverse group of people who are located at different locations and willing to respond to a series of questionnaires to assist in providing ideas, information or solutions to a defined question or problem        
    demand need or desire for the outputs, the product or services        
    demographics statistical factors of a population or group, such as information about age, gender, income, race, or ethnicity        
    design patent protects product design        
    design thinking method to focus the design and development decisions of a product on the needs of the customer, typically involving an empathy-driven process to define complex problems and create solutions that address those problems        
    design thinking method to focus the design and development decisions of a product on the needs of the customer, typically involving an empathy-driven process to define complex problems and create solutions that address those problems        
    develop stage in which the entrepreneur takes the list of ideas generated and tests each solution for feasibility        
    diffusion chasm most critical point of adoption, which often occurs at the end of the early adoption phase, before the early majority steps in and truly confirms (or not) the diffusion of an invention        
    digital marketing online marketing        
    direct mail connecting to consumers via email or through printed mailed pieces        
    disclosure sharing the needed facts and details about a subject in a transparent and truthful way        
    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        
    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        
    disruptive technology technology that once introduced, displaces established patterns, processes, and systems previously accepted as normal or accepted methods        
    divergent thinking process of generating as many ideas as possible, even when those ideas do not seem logical; the list of ideas can be conflicting, diverse, and disparate        
    diversity inclusion of many types of employees, regardless of differences (race, religion, gender, disability, LGTBQ, socioeconomic, cultural)        
    donation financial gift intended to support an organization’s general operations        
    down time time when production is not occurring due to repair, restocking inventory, or unscheduled work        
    due diligence conducting the necessary research and investigation to make informed decisions that minimize risk        
    due diligence conducting the necessary research and investigation to make informed decisions that minimize risk        
    e-commerce electronic transactions, particularly over the Internet, for the exchange of goods and services        
    early adopters people who like to try new things and can be found at the onset of the adoption process for a product        
    early stage company lifecycle stage in which the product or service has begun development        
    economic factors inflation, interest, employment, and currency exchange, rates, (among many other factors) that impact the business owner’s pricing of goods or services, the demand for such services, and the cost of production        
    economic nexus virtual connection with a state based on sales volume or number of transactions        
    elevator pitch abbreviated pitch, a memorized talk that can get you into the door to put your full pitch deck on display        
    empathy human ability to feel what other humans are feeling, which in the context of creativity, innovation, and invention is essential to beginning a process of human-centric design        
    enterprise risk management integrated cross-disciplinary approach to monitoring risk        
    entrepreneur someone who identifies an idea that no one else has acted on or identified; small business ownership and franchising are also entrepreneurial options        
    entrepreneurial contest any entrepreneurial competition other than a pitch competition; contests may entail submitting business models, long-form prospectuses, or forms tailored to contest specifications        
    entrepreneurial journey your exploration to discover if entrepreneurship is right for you        
    entrepreneurial marketing set of unconventional practices that can help start-ups and younger firms survive in competitive markets        
    entrepreneurial mindset awareness and focus on identifying an opportunity through solving a problem, and a willingness to move forward to advance that idea        
    entrepreneurial opportunity point at which identifiable consumer demand meets the feasibility of satisfying the requested product or service and meets the following conditions: significant market demand, significant market structure and size, significant margins, and resources to support the venture’s success        
    entrepreneurial problem solving process of using innovation and creative solutions to close the opportunity gap by resolving complex societal, business, or technological problems        
    entrepreneurial process set of decisions or actions that can be outlined and followed as a guide to developing or adjusting a venture        
    entrepreneurial spirit describes a quality of those individuals who are productive self-starters focused on making changes happen        
    entrepreneurial venture any business, organization, project, or operation of interest that includes a level of risk in acting on an opportunity that has not previously been established        
    entrepreneurial vision idea of what an entrepreneur wants a venture to become, what it will look like, what the driving forces are, and what values and culture should surround it        
    environmental entrepreneurship entrepreneurial ventures focused on identifying an environmental problem and creating a product or process to solve that problem        
    equity owner’s interest in the assets of the business        
    equity crowdfunding raising of capital through the online sale of securities to the general public        
    equity financing funds provided in exchange for a share of ownership in a business        
    ergonomics study of how work is performed        
    escalation of commitment tendency to continue with a predetermined action based on the past efforts and contributions to the project rather than an analysis of the current realities that disclose a new solution or approach is necessary        
    ethics standards of behavior to which we hold ourselves in our personal and professional lives        
    ethnographic research use of personal observation of the subject by being immersed in the subject’s environment        
    evaluate stage in which the final solution is assessed        
    evaluation lean problem-solving process phase in which behaviors are analyzed to assess success        
    executive summary initial section of a business plan document that summarizes the key elements of the entire plan        
    expeditionary marketing marketing designed to move established companies and their products into new markets and territories        
    expenses costs incurred in the normal course of business operations        
    external environment outside the enterprise and encompasses customers, industry trends, and competition        
    fail-safe point identified point that triggers the entrepreneur to consider what actions are needed to bring the venture back to a healthy position and whether this action is reasonable and feasible        
    fairness impartial, unbiased compliance with rules and standards of what is right, just, and equitable        
    fear of missing out, FOMO need to keep up with peers and the personas they represent in social settings, particularly on social media        
    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        
    financial risk starting a new business with insufficient funds to sustain operations over an extended period of time        
    financial statement output of an accounting system that is used to make financial decisions        
    financial viability long-term financial sustainability of an organization to fulfill its mission        
    financing raising money to fund the startup and operation of a business        
    financing activities section of the statement of cash flows that shows where new infusions of cash are coming from        
    fixed assets major purchases with a long life, such as buildings, land, and so on        
    fixed costs costs that do not change, regardless of the amount of sales        
    flat organization organizational structure where owners, executives, or key decision makers interact directly with staff at all levels, with very few if any mid-level managers        
    focus group gathering of people, typically six to twelve participants, who come together to discuss a topic presented by a moderator, who usually poses questions and collects qualitative data that can be used to answer questions or define research further        
    for-profit business business structure designed to create profits that are distributed to the owners        
    founders’ agreement written document that addresses contractual topics such as division of equity, compensation, contributions to the venture, and commitments to the venture with timelines included        
    framework structure or outlined process that can be used to accomplish entrepreneurial goals through problem solving, idea generation and validation, and brainstorming        
    franchising form of licensing that allows the business (franchisor) to share its business model to expand through various distributors (franchisees) for a fee        
    funding sources monetary resources used by the entrepreneur in the operation of the initial startup and early business        
    funds financial resources for acquiring assets        
    Gannt chart bar chart used to organize and plan sequential steps in a process        
    general partnership business created when two or more individuals or entities agree to work together to operate a business for profit        
    gig economy market system in which independent contractors fill a variety of positions        
    Global Entrepreneurship Monitor (GEM) organization that researches entrepreneurship around the world        
    go-or-no-go decision determination to proceed with or abandon a plan or project        
    grant financial gift intended to fund a specific goal or project        
    gross profit selling price of a product or service minus its direct costs        
    guerrilla marketing creative approaches to marketing that seek to gain maximum exposure through unconventional means        
    hackathon event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time        
    harvest point at which the venture is sold, at which time the investors receive a return on their investment        
    hindsight bias belief that, in retrospect, the outcome was predictable when the outcome wasn’t predictable due to various uncontrollable factors        
    hubris overinflated belief in oneself        
    human resources people hired by the entrepreneur to perform various duties in the business, provide customer service, or produce the goods        
    human-centered design focuses on people during design and development        
    hybrid group group of individuals who have a loose and flexible set of criteria for membership and function within a very broad set of guidelines; certain criteria may be required of regular members, but guests are frequently accepted with no long-term commitment expected        
    iceberg principle writing principle useful for preparing contest documents and pitch decks; following this principle, each word or sentence in the submission or presentation should be backed up with a wealth of supporting information and details that go unspoken in the pitch or proposal, but which you have at the ready should an investor take interest in the details and your knowledge of them        
    ideate stage of the creative problem-solving process leading to the detailing and formation of idea generation by the entrepreneur        
    ideation purposeful process of opening up one’s mind to new trains of thought that branch out in many directions from a stated purpose or problem        
    implement means to enact the plan and test for success        
    income (profit-and-loss) statement financial statement that describes how much a company earned while the business was operating and what costs were incurred to generate those revenues        
    incremental innovation innovation that modifies an existing product or service        
    independent contractors (also, freelancer) people or businesses that provide work similar to an employee without being part of the payroll for the contracting business, and who pay their own taxes and pay for their own benefits        
    infrastructure all resources the entrepreneur will need in order to launch and sustain a business venture        
    initial public offering (IPO) process by which a company lists its ownership shares on a public stock exchange        
    innovation new idea, process, or product, or a change to an existing product or process        
    innovation accounting assesses whether the changes made to the product are creating the desired results        
    innovative model method of entrepreneurial problem solving that uses techniques unknown to the market and that bring competitive advantage to an organization        
    insurance spreading risk over a large number of people (policyholders)        
    intangible resources assets that cannot be seen, touched, or felt, such as intellectual property, patents, designs, and processes        
    integrity adherence to a code of moral values implying trustworthiness and incorruptibility because there is unity between what we say and what we do        
    intellectual property legally protected result of creative work to turn a unique idea into a product or service        
    internal environment comprises the factors inside the enterprise, such as employees, and internal practices and processes        
    intrapreneur employee who acts as an entrepreneur within an organization, rather than going solo        
    introductory offers using lower initial prices to attract new customers and build a customer base before prices return to their standard amount        
    invention truly novel product, service, or process that, though based on ideas and products that have come before, represents a leap, a creation truly novel and different        
    inventory management business operations that include managing the quantity of inventory units in stock, scheduling and cataloguing replacement inventory, organizing shelf location for unit storage, paying for inventory received, and processing, fulfilling, packaging, and shipping customer orders        
    investing activities section of the statement of cash flows that shows major purchases of equipment or facilities        
    iterations small changes to the current version of a product to make it better fit consumer needs        
    iterative development process in which inventors and innovators continuously engage with potential customers in order to develop their products and their consumer bases at the same time        
    jingle short song or sound that brands a product or company and helps to promote it        
    joint venture temporary partnership in which two different enterprises combine for the purpose of mutual benefits such as sharing of expenses and to work toward shared goals and the associated potential revenue        
    lateral thinking free and open thinking in which established patterns of logical thought are purposefully ignored or even challenged        
    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        
    lean pitch verbal delivery of an idea or business plan as a request to a group of investors by an entrepreneur        
    lean plan brief business plan shown to potential investors and employees that is a fast and effective way to set, manage, and evaluate goals and strategies in a business        
    lean process systematic process for the maximizing of continuous improvement and the minimization of surplus or unused material in the production of a process        
    lean startup methodology entrepreneurs use this method to help them innovate by continuously testing their products and getting feedback from customers in real time        
    legal risk risk stemming primarily from a breach of contract, a regulatory violation, and/or the commission of a tort        
    liability company’s debt to another party        
    licensing contract in which one enterprise gives permission to another entity to manufacture and sell its products for a royalty        
    lifestyle business business that provides incomes similar to other forms of employment        
    lifestyle venture business whose founders’ primary focus is the lifestyle they will attain through becoming entrepreneurs, rather than a primary interest in financial rewards        
    limited liability company (LLC) hybrid of a corporation and a partnership that limits the owner’s liability        
    limited liability partnership (LLP) business arrangement for professional partnerships, such as law firms or accounting firms, in which partners are licensed professionals, with limited liability for financial obligations related to contracts or torts, but full liability for their own personal malpractice        
    limited partnership (LP) business arrangement that has at least one general partner and one or more limited partners        
    line of credit lending of funds in exchange for a promise to repay        
    line of credit (LOC) agreement between a bank and a depositor in which the bank makes available a maximum amount of money the depositor can borrow at any time during the term of the loan; the borrower pays a fee during the term, whether or not there is an outstanding balance, and also pays interest when there is a balance on the loan        
    linear thinking logical, step-by-step process        
    liquidity measure of a company’s ability to cover its immediate and short-term (i.e., due within one year) debts and obligations        
    loss leader pricing using a below-standard price to attract customers in the hope that they will purchase other, more profitable goods and services        
    market analysis analysis of the overall interest in the product or service within the industry by its target market        
    market analysis analysis of the overall interest in the product or service within the industry by its target market        
    market opportunity unmet need within a target demographic        
    market research collection and analysis of data related to a business’s target market        
    marketing umbrella term given to those activities that companies use to identify consumers and convert them into buyers        
    marketing mix basic set of possible strategies and approaches that marketers use to reach their target market        
    marketing plan formal business document that used as blueprint for how a company will achieve its marketing and business goals        
    marketing strategy company’s game plan for how it will reach consumers and convert them into paying customers        
    mature stage company lifecycle stage in which the business has reached commercial viability        
    mergers and acquisitions when two companies combine, or one buys the majority stake of the other        
    milestone significant decision point or significant accomplishment        
    minimum viable product (MVP) early version or prototype of a product that may not be polished or complete but that functions well enough that you can begin to market it or test it with potential users        
    mission statement statement of an organization’s reason for being that defines its primary long-term goal, explains what the venture will do, what value it will provide to the end customer, and how it will accomplish that action        
    mission statement statement of an organization’s reason for being that defines its primary long-term goal, explains what the venture will do, what value it will provide to the end customer, and how it will accomplish that action        
    moonlighting earning income from a source outside of one’s primary employ        
    need awareness occurs when the entrepreneur notes a gap between societal or customer needs and actual circumstances        
    nepotism hiring family and close friends because of personal relationships rather than for their skill sets        
    net income revenue minus expenses        
    networking process of establishing and maintaining bilateral relationship with other people to exchange information, ideas, products or services, and money        
    Nominal Group technique group decision-making process that requests multiple rounds of responses and discussions of response        
    noncompete agreement formal agreement that the person signing the document will not work for another organization that is a direct competitor of their current employer during employment and usually for a specified length of time after employment ends        
    nondisclosure agreement formal agreement that the person signing the document will not sharing proprietary information with outside sources        
    nondisclosure agreement (NDA) contract that carries harsh financial penalties should one party to the agreement disclose what they know of the proprietary information        
    North American Industry Classification System (NAICS) standard used by US federal agencies to collect, analyze, and report statistical information about businesses        
    not-for-profit organization (NFPO) business structure that is usually dedicated to furthering a particular social cause or for advocacy related to a common shared interest by using its surplus revenues to achieve its ultimate objective        
    observation lean problem-solving process phase in which the entrepreneur studies the challenge and notes all facets of the challenge requiring solution        
    odd numbers strategy psychological pricing strategy that uses odd numbers in the prices to make a product’s price point more attractive to consumers        
    offering actual product or service, its value proposition, and how you will reach and communicate with your target customers        
    open group informal, loosely organized group of individuals who have no formal process for joining or leaving the group, and who focus on a specific activity or social cause        
    open innovation searching for and finding solutions outside of the organizational structure        
    operating activities section of the statement of cash flows that shows day-to-day activities of the business, such as purchasing supplies, paying rent, and receiving cash from customers        
    operational capacity number of units that can reasonably be expected to be produced within a specified time period        
    operational expenses expenses associated with daily, ongoing activities of the business, such as inventory, office supplies, wages, insurance, and utilities        
    operational reserve difference in unit capacity between absolute capacity and operational capacity        
    opportunity screening process used to evaluate innovative product ideas, strategies, and marketing trends, focusing on financial resources, skills of the entrepreneurial team, and competition        
    opportunity-identifying perspective method for identifying a problem and determining how it could be translated into an opportunity to create a new venture        
    outsourcing hiring an outside company or third party to perform a specific task, job, or process, or to manufacture goods        
    pain point problem that people have with a product or service that might be addressed by creating a modified version that solves the problem        
    partnership business entity formed by two or more individuals, or partners, each of whom contributes something such as capital, equipment, or skills        
    patent legal grant of protection for an inventor over the rights, usage, and commercialization of an invention for a set time period        
    penetration pricing pricing below that of a competitor’s price        
    people company’s human resources        
    personal selling using face-to-face interactions to communicate and influence a customer to make a purchase        
    PEST framework that can be used to distinguish political, economic, sociocultural, and technological factors influencing access to needed resources        
    petitioner problem solvers problem solvers who see a problem and ask others for solution ideas        
    physical environment where a service takes place or a product is manufactured        
    pioneering innovation one based on a new technology, a new advancement in the field, and/or an advancement in a related field that leads to the development of a new product        
    pitch formal presentation in which you ask for something and that is delivered (usually) to potential investors in a startup        
    pitch competition competition that may have cash prizes or mentorship opportunities for winners; you are expected to present your business idea in the form of a presentation, usually with a pitch deck        
    pitch deck slide presentation that you create that gives a quick overview of your product and what you’re asking for        
    pivoting crucial change done to test a hypothesis regarding the basic product, its growth potential, and business model; if something is not working, then a change or a “pivot” needs to take place        
    place channels or locations—physical or digital—where products can be found by customers        
    planning fallacy creation of a plan that is too optimistic and not aligned with conservative assumptions        
    political factors stem from changes in politics, such as the policies of a new presidential administration or congressional legislation, as well as of state and local offices        
    positioning (or value proposition) statement of how you want the customer to perceive your company, good, or service        
    pre-launch costs cost of all the resources needed to open the business to the public        
    prejudice way of thinking about or treating employees in a manner that favors or hinders one person or group over another, usually in a way considered to be unfair        
    premium pricing charging a price above a competitor’s price        
    price value that must be exchanged in order for a customer to receive a product or service        
    primary research research that involves gathering new data        
    primary research research that involves gathering new data        
    privately held corporation company that does not allow members of the investing public to own stock; instead, it is owned by the founder’s family or friends, or a private group of investors        
    pro forma financial statement that shows how much and where monies will be collected and spent in the early stages of business creation        
    problem-solution narrative brief story of a sentence or two that states a problem affecting many people and offering a solution that is innovative, unique, insightful, or all of these        
    process chain of procedures and/or activities required to provide the product to the customer        
    product good or a service that creates value by fulfilling a customer need or desire        
    production time amount of time that a machine is actually producing products that are to be sold; also called up time        
    profit margin amount by which revenue exceeds costs, typically described as a percent        
    program services basic offerings that a nonprofit provides to generate a portion of its revenue to sustain operations        
    projected cash flow outline of preliminary expenses, operating expenses, and reserves        
    projection forecast of the future operations of a business        
    promotion process of communicating value to customers in a way that encourages them to buy        
    public corporation quasi-governmental entity, a corporation owned or sponsored by the government        
    public relations marketing that focuses on connecting with constituents by developing goodwill        
    publicly held corporation entity in which members of the investing public own the stock        
    qualitative research use of open-ended techniques such as observation, focus groups, and interviews to gain an understanding of customers’ basic reasons, opinions, and motivations        
    quantifiable manner method to determine if a goal has been met or not        
    quantitative research generation of numerical data through techniques such as surveys and questionnaires        
    quota specific number of units allowed into a country; sometimes quotas are limited to one source, such as one country, and sometimes the limit is placed on aggregate quantity regardless of source(s)        
    real-time marketing seeks to turn immediately available sales data into actionable and timely strategies that target the shifting landscape of consumer tastes and trends        
    relationship marketing creates customer loyalty through personal interaction and strives for long-term engagement        
    resource dependence theory (RDT) model creating networks with business partners through mergers, vertical integration, joint ventures, or engaging in joint political activities to slow dependency among member groups        
    resourcefulness ability to discover clever solutions to obstacles        
    revenue amount a business earns through product sales or providing a service        
    run rate cost of running a business over a specified period of time        
    S corporation “pass-through” entity, also known as a small corporation, where shareholders report and claim the business’s profits as their own and pay personal income taxes on it        
    sales promotion incentives such as coupons and discounts that help attract customers and help them take action        
    sales strategy plan that the entrepreneur uses to identify and engage a consumer, from prospecting to securing the sale and beyond        
    sample group of people participating in market research        
    scientific method most often associated with the natural sciences, outlines the process to discover an answer to a question or a problem        
    secondary research research that uses existing data        
    secondary research research that uses existing data        
    seed stage company lifecycle stage in which the business is largely still an idea        
    segmenting separating the total population by homogeneous groups of people that have similar tastes, backgrounds, lifestyles, demographics, and culture        
    self-performing when employees do most of the work in a business        
    self-regulating problem solvers problem solvers who are autonomous and work on their own, without external influence; they have the ability to see a problem, immediately visualize a possible solution to the problem, and seek to devise a solution        
    serial entrepreneur entrepreneur who becomes involved in starting multiple entrepreneurial ventures        
    service mark word, phrase, symbol, or graphic that identifies the origin or source of a service        
    serviceable available market, SAM portion of the market that a business can serve based on its products, services, and location        
    shared economy economy in which some assets are not in use, which may present an entrepreneurial opportunity        
    situation analysis examination of the internal and external circumstances relevant to a particular business        
    situational opportunity one that becomes available, depending on factors such as where you work, your family obligations, your idea or invention, your unique creative expression, or a recent career search or job change        
    skimming high-pricing strategy that leverages the newness of a product in order to “skim” the most profits off the top at the beginning of a sale        
    SMART goals well-structured and defined goals that are specific, measurable, achievable, realistic and timely        
    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        
    social capital goodwill that is created through helping someone else        
    social entrepreneur entrepreneur who has an interest in solving a social, environmental, or economic problem        
    social entrepreneurship entrepreneurial ventures focused on identifying a societal problem and creating a product or process to solve that problem        
    social media online communication tool for entrepreneurs to connect with consumers, especially younger demographics        
    sociocultural factors changes in how society is moving and the direction of that movement as it relates to a customer base and potential new markets        
    soft launch (also, soft open) launching a venture for a limited time frame or audience to gain experience, insights, and feedback about the target market or consumer        
    sole proprietorship business entity that is owned and managed by one individual that has very little formal structure and no mandatory filing/registration with the state        
    statement of cash flows financial statement that explains the sources and uses of the company’s cash        
    status quo bias pattern of relying on previous actions and results as the accepted pattern and outcome with a bias against change or new information or new results        
    storyboarding process of presenting an idea in a step-by-step graphic format        
    strategic alliance arrangement created by two entities to work on a project by sharing some of their strengths and resources, but not actually creating a new entity as in the case of a joint venture        
    supply amount of a product or service produced        
    sustainability practice of preserving resources and operating in a way that is ecologically responsible in the long term        
    sustainable strategy strategy that can maintain an organization’s financial stability        
    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        
    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        
    tagline short and catchy positioning statement that quickly communicate some core aspect of the brand to the consumer        
    tangible resources assets that have a physical form as they can be seen, touched, and felt        
    target market specific group of consumers for which a company seeks to provide a good or service        
    targeting selecting a customer group based on their ability and willingness to buy        
    tariffs taxes or duties that are added to imported goods from another nation        
    tax-exempt status treatment under U.S. tax law that removes the burden of taxes from nonprofit organizations        
    team creativity process of a team creating an unexpected solution for an issue or challenge        
    technological factors technological equipment and tools the enterprise needs to be sure it operates efficiently        
    theorist problem solvers problem solvers who see a problem and begin to consider a path toward solving the problem using a theory        
    total available market (TAM) total perceived demand for a product or service within the marketplace        
    total available market (TAM) total perceived demand for a product or service within the marketplace        
    total cost of ownership comprehensive cost of owning large capital items, including initial direct costs, operating direct costs, and indirect costs        
    trade association group of companies or employees of companies in a specific industry, business structure, or social cause        
    trade secret proprietary information, processes, or other internal knowledge that contribute to an organization’s competitive edge in a market        
    trademark registration that provides the owner the ability to use a name, symbol, jingle, or character in conjunction with a specific product or service, and prevents others from using those same symbols to sell their products        
    truthfulness underlying facts, reality, and evidence on a matter        
    unique selling proposition marketer’s rationale as to why a product or service is different/better than the competitor’s products        
    user interface, UI what a customer sees when they use your product; having a variant of a UI is not necessarily grounds for establishing a patent, but having unique design in the broader sense may help you to secure patent protection        
    utility patent protects product ideas        
    validation act of verifying that a product can be successful with a target audience        
    valuation estimate of a company’s worth        
    value proposition summary describing the benefits (value) customers can expect from a particular product or service        
    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        
    venture startup company or organization that conducts business or is created to satisfy a need        
    venture capitalist individual or investment firm that specializes in funding startup companies        
    vertical integration strategy of gaining control over suppliers of raw materials and distributors of finished products to expand or control the relevant supply chain        
    viral marketing marketing that uses engaging content in the hopes that viewers will share it on their personal and social media networks        
    vision statement picture of what the venture will become in the future or what the venture will grow into        
    whiteboarding type of graphing that permits the entrepreneur to plot each step in a process to build comprehension and detailing of the process        
    word-of-mouth (WOM) marketing promotion in which a satisfied customer tells others about their positive experience with a good or service        
    work-for-hire agreement agreement between an individual employee and a company states that ownership of innovations belongs to the company, even if an individual makes substantial contributions to the product        
    working capital funds available for day-to-day operations