MicroEnterprise Exam Flashcards
Money owed by a company to a supplier.
Accounts Payable
Money owed by a customer to a company.
Accounts Receivable
Individuals that make small investments in an enterprise or to support an entrepreneur where they do not expect an immediate or large return on the investment. They are typically friends and family who know the business owner and want to see them succeed.
Angel Investors
Something of value. Anything owned.
Assets
Debt from a bank. Banks require much more information from potential borrowers and take more time to make a lending decision based on a great deal of analysis. Therefore, it is less expensive than online lines of credit.
Bank Loan
A loan. A security that investors buy and sell, that represent a legal obligation from the company issuing it that they will repay the funds they received when they issued the bond.
Bond
A determination of how many units are needed to sell in order to pay for all fixed costs.
Breakeven Analysis
A company that provides individuals and companies with access to financial markets.
Brokerage
Proper business behavior beyond complying with legal requirements.
Business Ethics
Funds contributed by investors to a business. Investors contribute to a business because they expect a significant return on their investment when the business succeeds.
Capital (or Equity)
Money spent on equipment the business will use for many years.
Capital Expenditures
Total revenue minus total cost minus one-time expenditures (capital expenditures) on equipment that will be sued for many years.
Cash Flow
Cash, publicly traded stocks, government bonds, or corporate bonds that can be quickly turned into cash. The can be turned into cash at values that are predictable and available to all holders of the cash instruments.
Cash Instruments
Equipment, inventory, or other goods that are pledged to the bank in the case the company cannot make a loan payment.
Collateral
The ability to interact in a friendly and effective way with unfamiliar people. The ability to seem welcoming and easy to talk to, even with people we are different in age, appearance, or background
Comfort Engaging with Strangers
Money earned when something is sold.
Commission
A promise to keep the information you learn secret. The promise is often formalized by signing a Non-Disclosure Agreement. (NDA)
Confidentiality
A situation in which an individual might take an action to his/her advantage that would be to the disadvantage of a person or company that believes this individual is serving them.
Conflict of Interest
Unit price minus the cost of goods sold.
Contribution Margin
Actions entrepreneurs and companies take that go beyond their financial self-interest.
Corporate Social Responsibility
A person in the eyes of the law. It is taxed for profits and is liable for any debts or judgments. Owned by shareholders (individuals or other corporations).
Corporation
Cost that makeup one unit of what you sell. These can be labor costs as well as material costs.
Cost of goods sold.
A loss that an insurance company will reimburse a policyholder in the event of a claim.
Covered Loss
Funds lent to a business with an agreement that the business will repay the lender with interest.
Credit (or Debt)
A person or a business with a strong credit score and the financial resources that make it likely they will be able to repay any loan.
Credit-Worthiness
An internet phenomenon, where strangers learn about a business online and then decide whether or not to make an investment. These investors are typically “fans” of an owner, but they do expect a return on investment.
Crowdfunding
The amount an insurance company makes a policyholder pay as part of any claim.
Deductible
Failure to repay a loan.
Default
The commitment to get something done.
Determination
Distinguishing a product or service “different than anything else” attracting customers, generating sales and serving as the foundation for a thriving business.
Differentiated Offering
Money paid by a company to a person who owns stock in that company.
Dividend
A clear, concise and compelling way to describe a business or new business concept in 30 seconds; a differentiating vision to encourage potential investors or employees to learn more
Elevator Speech
Open-ended questions that prompt more than a “yes” or “no” answer.
Engaging Question
Funds contributed by investors to a business. Investors contribute capital to a business because they expect a significant return on their investment when the business succeeds.
Equity (or Capital)
Understanding how individuals and businesses earn money and what they spend money on.
Financial Literacy
The 12-month period a company uses to report financial results. It can be the same as a calendar year or it can be any 12-month period that makes sense.
Fiscal Year
Costs that do not vary based on the units sold by the enterprise.
Fixed Costs
A computer portal offered by the Louisiana Secretary of State that enables entrepreneurs to go to a single source to learn which forms they need to file the forms required by the Secretary of state, and to determine which other government agencies they may need to interact with.
geaux BIZ Portal
An individual’s self-commitment to overcome obstacles to achieve long-term goals. The ability to keep pursuing your dream despite challenges and defeats. Perseverance, resilience, and backbone.
Grit
A credit-worthy individual or business with sufficient liquidity that promises to repay a loan in the event that the debtholder can’t make a required payment.
Guarantor
A special account where individuals can deposit retirement funds that can grow tax-deferred until they withdraw them after they retire.
Individual Retirement Account (IRA)
Debt owed to someone that is paid monthly.
Installment Payment
The amount an insurance policyholder receives from the insurance company to reimburse the policyholder for a covered loss.
Insurance Claim
The individual or business that purchases an insurance policy for various types of protection.
Insurance Policyholder
The amount a policyholder pays for an insurance policy.
Insurace Premium
Non-physical assets created by individuals or companies that hold the exclusive legal right to commercialize.
Intellectual Property
Gives the author the sole right to benefit economically from what he/she wrote.
Copyright
Gives the inventor the sole right to benefit commercially from his/her invention.
Patent
Gives the registering individual or company the sole right to benefit from a brand or image he/she created.
Trademark
The federal agency that collects federal taxes and performs audits.
Internal Revenue Service (IRS)
The merchandise that a company sells to customers.
Inventory
A legal decision requiring a person or company to pay another person or company.
Judgement
An obligation you have to pay someone else money. Also called a debt or loan.
Liability
The right to take possession of collateral until a debt is repaid.
Lien
A special type of coporation where individual owners (or members) are taxed on the profits of the company, but the corporation (not the members) is liable for debts or judgements against the company.
Limited Liability Corporation (LLC)
A loan that provides the borrower a maximum amount of money he/she can borrower - the borrower can then access or use that line of credit for only as much as they need at any particular time.
Line of Credit
Cash or securities that can be immediately turned into cash, which can then repay any loan amount outstanding.
Liquid Assets
The state agency that collects state taxes.
Louisiana Department of Revenue
How a business communicates to large numbers of customers, motivating them to learn more about the business and its offerings.
Marketing
The date a loan is repaid in full.
Maturity
A person who coaches and supports an entrepreneur or student studying to become an entrepreneur.
Mentor
The money a person borrows to buy real estate.
Mortgage
An investment security that includes many different stocks purchased and held together. Investors purchase mutual funds because they are less risky than holding any individual stock.
Mutual Fund
Means revenues after costs.
Net Income
A payment that is owed every month.
Obligation
Debt obtained from a number of online companies. Borrowers need to disclose much less information about themselves to obtain this type of credit and these credit companies make credit decisions much more quickly than banks. For these reasons, it is much more expensive for borrowers than bank loans.
Online Credit
When a company issues a check or makes a financial commitment for an amount greater than the amount the company has depositied in the bank. Also called a “bounced check”.
Overdraft
Costs that a business incurs that are not part of producing the goods or service it sells, but which are required to operate legally and efficiently.
Overhead
Owning an asset without any associated debt.
Own “Free and Clear”
When two or more individuals own a company. Partners are taxed on the profits of the company and are personally liable for any debts or judgments against the company.
Partnership
The amount of money borrowed.
Principal
A Latin phrase that in business means a projection of future financial performance. It usually takes the form of a projection of future revenues and costs.
Pro Forma
The ability to find solutions to difficult or complex issues. the process of working through the details of a challenge or crisis - often under pressure - to reach a solution.
Problem Solving
Revenues minus Costs
Profit
Unit price minus the cost of goods sold
Profits per Unit
Most projections are for a year. This term means every three months. Most businesses make reports for each ______________.
Quarter
Property and the building(s) on it. It can be a piece of land or can be a home on that piece of land, or it can be a building. It is typically purchased using a mortgage. The down payments the buyer makes is called the buyer’s “equity”.
Real Estate
Debt that includes a legal obligation by the borrower to repay the debt personally if the business is unable to make its scheduled debt payment. It can be guaranteed by the entrepreneur or by any credit-worthy guarantor.
Secured Debt
An investment worth money; a “financial instrument” indicating ownership.
Securities
An investment vehicle. Different types of this include stocks, bonds, and mutual funds.
Security
The ability to pursue what you think is right or necessary to do despite temptations to quit.
Self-Discipline
The ability to pursue a task without being told to by someone else. These individuals can find the strength to start and then finish a task without giving up.
Self-Motivation
Costs that vary somewhat based on the number of units you sell.
Semi-Variable Costs
An individual that owns a company. They are taxed on the profits of the company and are personally liable for any debts or judgments against the company.
Sole Proprietorship
One of the equal parts into which a company’s capital is divided, entitling the holder to a proportion of the profits. It refers to the ownership certificates of a particular company.
Share
An individual or company that owns shares in a company.
Shareholder
All people or companies associated with an enterprise. Includes internal (employees and shareholders/owners) as well as external (customers, suppliers, community members)
Stakeholders
Shares of ownership in a company. A general term of ownership in any company.
Stocks
A company that provides a good or service to another company.
Supplier
The hard work a small business owner puts into forming, founding, and operating his/her business. Small business owners typically work very long hours This is as important as any capital but it’s not a cash investment.
Sweat Equity
The exact customers and market sector the business intends to serve.
Target Market
Working with others to address a challenge. Individuals using their skills in harmony with others to complete a task. Collaboration and cooperation.
Teamwork
Fixed cost plus variable cost.
Total Costs
Units times price.
Total Revenue
The practice of operating openly and communicating fully, providing stakeholders with a clear understanding of how your enterprise operates.
transparency
Assets that are not already pledged as a guarantee to repay another loan.
Unencumbered
Refers to the “things” the company sells. Retail stores sell many different types of units. Service businesses can sell many different types of services.
Units
Debt that does not include a promise by a guarantor to repay the loan in the event the debtholder is unable to make a required payment. It is riskier for the bank or online lending company - therefore the lending party charges a higher interest rate on this type of debt.
Unsecured Debt
Costs that vary based on the units sold by your enterprise.
Variable Cost
