Key Terms (C) Flashcards
What Is A ‘Call-To-Action (CTA)’?
If you want a prospect to take the next step you need to give them a CTA: tell them exactly what to do. Visit a website, check your e-mail, call a phone number, etc.
The key for an effective CTA is to be as simple, clear and obvious as possible.
The best CTAs call directly for a sale or for Permission to follow up.
What Is ‘Capital’?
The purchase of an ownership stake in a business. For parties that have resources to allocate, providing capital is a way to help owners of new or existing businesses expand or enter new markets.
Angel investing, venture capital, and purchasing stock in publicly traded companies are all examples of providing value via capital, which are part of the Hierarchy of Funding.
In order to provide value via Capital, you must:
Have a pool of resources available to invest.
Find a promising business in which you’d be willing to invest.
Estimate how much that business is currently worth, how much it may be worth in the future, and the probability that the business will go under, which would result in the loss of your capital.
Negotiate the amount of ownership you’d receive in exchange for the amount of capital you’re investing.
Businesses benefit from capital investment because it enables them to gather the resources necessary to expand or enter new industries. Some industries, like manufacturing and financial services, require huge amounts of funding to start or expand. By taking on investors, business owners can accumulate enough funds to move forward quickly.
Investors benefit by acquiring a certain percentage of that company’s ownership, which allows them to benefit from the business’s activities without active involvement. Instead of leaving their money in a bank account, investors can allocate it to companies that are involved in promising ventures, which may provide a higher rate of return.
If the business brings in a lot of cash, the investor may benefit from a regular dividend. If it’s acquired by another company or is listed on a public stock exchange, the investor may receive a percentage of the purchase price as a lump sum payment or sell their shares of the company on the open market for a profit.
What Is The ‘Cash Flow Cycle’?
This describes how cash flows in and out of business. Receivables are promises of payment you’ve received from others. Debt is a promise you make to pay someone at a later date. To bring in more cash it’s better to speed up collections and reduce the extension of credits.
What Is The ‘Cash Flow Statement’?
This is straightforward: it’s an examination of a company’s bank account over a certain period of time. Think of it like a checking account ledger: deposits of cash flow in, and withdrawals of cash flow out. Ideally, more money flows in than flows out, and the total never goes below zero. Every one of these covers a specific period of time: a day, a week, a month, a year. The time period of the report depends on the purpose.
What Is ‘Caveman Syndrome’?
Human biology is optimized for the world that existed 100,000 years ago, not for the world today. This is a way of recognizing that your brain and body simply aren’t optimized for today’s world.
Part of the challenge is facing 16 hours work days, instead of the physical survival of the past.
Don’t be too hard on yourself. Nobody was built for the world as it is today.
What Is ‘Cessation’?
This refers to the conscious choice to stop doing something that’s counterproductive.
Since we suffer from Absence Blindness, we tend to believe that we have to always do something to improve a system.
Doing nothing may be the best path in many cases.
