Key Terms (B)

Question 1

Balance Sheet

Answer 1

A snapshot of what a business owns and what it owes at a particular moment in time. You can think of it as an estimate of the company’s net worth at the time it was created.
It always cites a specific day, and uses this calculation:
Assets - Liabilities = Owner’s Equity (the company’s net worth).

Question 2

Barrier to competition

Answer 2

Don’t focus on competing, focus on delivering more value. Every improvement you make builds this and makes it more difficult for competitors to keep up.
The more time you spend looking at the competition, the less time you have to build your business.
Every improvement you make to your Value Stream, makes it harder for your competition to follow.

Question 3

Barriers to purchase

Answer 3

Selling anything is largely the process of identifying and eliminating this: anything that prevents your prospect from buying what you offer.
These are the five standard objections in every sales process:
1 - Loss Aversion: It costs too much. Makes spending feel like a loss.
2 - It won’t work.
3 - It won’t work for me.
4 - I can wait.
5 - It’s too difficult.

It’s smart to structure your offer with those objections in mind:
Objection #1 is best addressed via Framing and Value-Based Selling. If it’s clear that the value of your offer exceeds the asking price, the objection is moot.
Objections #2 and #3 are best addressed via Social Proof. Show the prospects how others like them are benefiting from the offer. That’s why Referrals are such a powerful tool.
Objections #4 and #5 are best addressed via Education-Based Selling. If the customer doesn’t realize they have a problem, they won’t be looking for a solution. Focus your early efforts in making them smarter and then helping them Visualize what would happen if they proceed.
Once you have their Attention and Permission, there are two possible tactics if they still have objections:
1 - Convince them that the objection isn’t true.
2 - Convince them that the objection is irrelevant.
Always try to negotiate with the decision-maker.

Question 4

Bootstrapping

Answer 4

The art of building and operating a business without outside funding.
This allows you to grow your business while controlling it 100%.
If you accept Funding, make sure that you use it to do things that you couldn’t otherwise.
Do this as far as you can go, then move up the Hierarchy of Funding as needed.

Question 5

Breakeven

Answer 5

The point where your business’ total revenue exceeds its total expenses. The more revenue you bring in and the less you spend, the more quickly you’ll reach this. After this, your business is truly profitable and self-sustaining.

Question 6

Buffer

Answer 6

A third party empowered to negotiate on your behalf. Agents, attorneys, etc. are all examples of this.
Depending on the agreement, your agent’s priorities may be very different from your own. Be mindful of Incentive-Caused Bias.
If possible, work with an agent who is willing to accept a flat fee. Their interests will be more aligned with yours when they are paid no matter what happens.
Don’t let your their judgment replace your own.
Don’t give total control of your decisions or resources to them.

Question 7

Bundling and Unbundling

Answer 7

Repurposing value that you already created to create even more value by combining multiple small offers into one large offer. The more offers are combined, the higher the Perceived Value of the offer will be.
The opposite of the above is splitting an offer into multiple smaller offers.
These help create value for different customers without having to create something new.

Question 8

Bystander Apathy

Answer 8

This is an inverse relationship between the number of people who could take action and the number of people who actually choose to act.
It explains why groups like committees never get anything done: everyone assumes someone else will step up.
The best way to eliminate this in project management is to have clearly defined tasks for each individual.