Chapter 3-Small Business Planning Flashcards
Business Plan
A written statement of the business’s goals and objectives, and the steps to be taken to achieve them
Planning
The process of formulating objectives and determining how to achieve them.
Resources
Any person or product that will help in the production of a good or service.
Human resources
The employees who provide their time, energy, skills and effort.
Physical Resources
Refers to equipment such as a computer, cash register, machinery, motor vehicle, office equipment and stock.
Assets
Any item of value owned by the business.
Establishment Costs
Those costs involved in setting up the business.
Operating Costs
Include those costs involved in the ordinary day-to-day running of the business.
Equity
The funds contributed by the owner(s) of a business to commence and build the business.
Debt
The funds provided by sources outside the business, which must be paid back over time, with interest
Working Capital
The funds available for the short-term financial commitments of a business.
Bank Overdraft
The bank allows a business or individual to overdraw their account up to an agreed limit for a specified time, to help overcome a temporary cash shortfall
Bank Bills
Short-term securities issued by a business and bought by a bank
Trade credit
Exists when a supplier provides products to a business with an agreement to charge for the goods or services later
Mortgage
A loan secured by the property of the borrower (the business).
Leasing
A way of financing the purchase of assets without a large initial capital outlay.
Lessee
The person or business to whom a lease is granted.
Lessor
The owner of an asset that is leased under an agreement to the lessee.
Grant
A sum of money given by a government or other organization for a particular purpose
Marketing
‘The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives’ (American Marketing Association).
Marketing objective
A statement of what is to be achieved through the marketing activities.
Target Market
The group of customers to which the business intends to sell its product.
Marketing Strategies
Actions undertaken to achieve the business’s marketing objectives.
Marketing Mix
Refers to the combination of the four elements of marketing, the four Ps — product, price, promotion and place — that make up the marketing strategy.
Marketing Management
The process of monitoring and modifying the marketing plan.
Enlightened Self-Interest
The belief that a business ultimately helps itself when it helps to solve society’s problems.
Triple Bottom Line
Refers to the economic, environmental and social performance of a business.
