Unit 3 Definitions

Question 1

Entrepreneurship

Answer 1

Strategic thinking and risk-taking behaviour that results in the creation of new opportunities

Question 2

Sole proprietorship

Answer 2

single business owner –
unlimited liability

Question 3

Corporation

Answer 3

legal entity that exists separately from
its owners – responsible for its own liabilities-limited

Question 4

Equity Financing

Answer 4

offering shares in a business in return for a cash investment

Question 5

Venture Capitalist

Answer 5

making large investments
in new ventures for equity in business

Question 6

Strategic plan

Answer 6

set broad, comprehensive, and longer-term action directions for the entire organization.

Question 7

Policy

Answer 7

Broad guidelines for making decisions and
taking action in specific circumstances.

Question 8

Budget

Answer 8

•Single-use plans that commit resources to activities, projects, or programs.
•Fixed, flexible, and zero-based budgets.

Question 9

Strategy

Answer 9

a comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage.

Question 10

Innovation

Answer 10

An improvement or enhancement of an existing product.

Question 11

Patent

Answer 11

gives the holder the sole right to make, use, or sell an invention for a set period of time, preventing others from using it without permission.

Question 12

Royalty

Answer 12

Licensing means that the inventor allows another business to use his/her invention for a fee. This fee (royalty) can either be a fixed amount or it can be a percentage of the total sales revenue that the user pays the patent or copyright owner

Question 13

Form Utility

Answer 13

Relationship between a product/service form and function. Form is products “look” and function is what product/service is intended to do.

Question 14

Place utility

Answer 14

having access to a product, the easier a product is to find the more place utility it has.

Question 15

Possession utility

Answer 15

exists when goods/services are easy to purchase.

Question 16

Entrepreneur

Answer 16

Risk-taking individuals who take actions to pursue opportunities

Question 17

Partnership

Answer 17

unlimited liability
• Two or more people form a business

Question 18

Debt financing

Answer 18

borrow money that must be paid back over time.

Question 19

Initial public offering

Answer 19

initial selling of shares of stock to public

Question 20

Planning

Answer 20

The process of setting objectives and determining how to best
accomplish them.

Question 21

Tactical plan

Answer 21

define what needs to be done in specific functions to implement strategic plans.
• Production plans- manufacturing,materials
• Financial plans- costs, forecasts
• Facilities plans -evaluate space for business success
• Marketing plans-target market- 4p’s
• Human resource plans-selecting, maintaining right labour
Management

Question 22

Procedure

Answer 22

Plans that describe exactly what actions are to be taken in specific situations.

Question 23

Forecasting

Answer 23

• Making assumptions about what will happen in the
future.
• Qualitative forecasting uses expert opinions.
• Quantitative forecasting uses mathematical and statistical analysis.
• All forecasts rely on human judgment.

Question 24

Invention

Answer 24

A product or process that has not existed before.

Question 25

Copyright

Answer 25

gives someone the exclusive right to publish, produce, sell, or distribute works of literature, music, art, and software.

Question 26

Licensing

Answer 26

the inventor allows another business to use his/her invention for a fee.

Question 27

Utility

Answer 27

is usefulness, refers to what is added to a product
to make it more valuable on the market.

Question 28

Information utility

Answer 28

provides consumers with instructions, directions, user manuals.

Question 29

Time utility

Answer 29

product /service available when the
consumer wants it