Vocabulary-Lecture-Test 2 Flashcards
The exercise of prudence, such as would be expected of a reasonable person, in the careful evaluation of a business opportunity.
Due Diligence
Specialized brokers that bring together buyers and sellers.
Matchmakers (Business Brokers)
A group of people bound by a shared history and commitment to share a future together, while supporting the development and well-being of individual members.
Family
An organization in which either the individuals who established or acquired the firm or their descendants significantly influence the strategic decisions and life course of the firm.
Family Business
Couples teams who own and manage businesses.
Co-preneurs
Commitment based on being something that the family member “ought to” do.
Obligation-Based Commitment
Commitment based on being something that the family member “wants to” do.
Emotional Attachment (Desire-Based Commitment)
Commitment based on being something that the family member “has to” do.
Cost-Based Commitment
Commitment based on being something that the family member “needs to” do.
Need-Based Commitment
A document that outlines the basic concept underlying a business and describes how that concept will be realized.
Business Plan
An abbreviated business plan that presents only the most important issues and projections for the business.
Mini-Plan (Short Plan, Abbreviated Plan)
A complete business plan that provides an in-depth analysis of the critical factors that will determine a firm;s success of failure, along with all the underlying assumptions.
Comprehensive Plan
A section of the business plan that conveys a clear and concise overall picture of the proposed venture and creates interest in the venture.
Executive Summary (Overview)
A section of the business plan that describes the product and/or service to be provided and explains its merits.
Product/Service Plan
A section of the business plan that describes how the firm will reach and service customers within a given market.
Marketing Plan
A section of the business plan that offers information on how a product will be produced or a service provided, including descriptions of the firm’s facilities, labor, raw materials, and processing requirements.
Operations and Development Plan
A section of the business plan that describes a new firm’s organizational structure and the backgrounds of its key employees.
Management Team Section
A section of the business plan that identifies the potential risks that may be encountered by an investor.
Critical Risks Section
A section of the business plan that indicates to an investor how much money is needed, and when and how the money will be used.
Offering
A section of the business plan that projects the company’s financial position based on well-substantiated assumptions and explains how the figures have been determined.
Financial Plan
Projections of a company’s financial statements for up to five years, including balance sheets, income statements, and statements of cash flows, as well as cash budgets.
Pro Forma Statements
A disclosure document that describes a financial security for potential buyers (investors).
Prospectus (Offering Memorandum)
Business activities that direct the creation, development, and delivery of a bundle of satisfaction from the creator to the targeted user.
Small Business Marketing
The fundamental benefit or solution sought by customers.
Core Product/Service
The basic physical product and/or service that delivers those benefits.
Actual Product/Service
The basic product and/or service plus any extra or unsolicited benefits to the customer that may prompt a purchase.
Augmented Product/Service
The process of locating and describing potential customers.
Market Analysis
The combination of product/service, pricing, promotion, and distribution activities.
Marketing Mix
A description of potential customers in a target market.
Customer Profile
Patents, trademarks, and copyrights, which are used to differentiate products and images from those of competitors and prevent rivals from stealing competitive advantage. Also includes trade secrets. Intangible assets of the company.
Intellectual Property
The gathering, processing, interpreting, and reporting of market information.
Marketing Research
Market information that has been previously complied.
Secondary Data
New market information that is gathered by the firm conducting the research.
Primary Data
A group of customers or potential customers who have purchasing power and unsatisfied needs.
Market
The division of a market into several smaller groups, each with similar needs.
Market Segmentation
Specific characteristics that distinguish market segments according to the benefits sought by customers.
Benefit Variables
Specific characteristics that describe customers, their purchasing power, their consumption patterns, and other factors.
Demographic Variables
A strategy that defines the total market as the target market.
Unsegmented Strategy (Mass Marketing)
A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each.
Multisegment Strategy
A strategy that recognizes the existence of several distinct market segments but focuses on only the most profitable segment.
Single-Segment Strategy
A prediction of how much a product or service can be sold within a given market during a specified time period.
Sales Forecast
A forecasting method that begins with a variable that has a very large scope and systematically works down the sales forecast.
Breakdown Process (Chain-Ratio Method)
A forecasting method in which all potential buyers in a target market’s submarkets are identified and the estimated demand is added up.
Buildup Process
A forecasting method in which sales is the estimated variable.
Direct Forecasting
A forecasting method in which variables related to sales are used to project future sales.
Indirect Forecastingq
Managers and other key persons who give a company its general direction.
Management Team
An interconnected system of relationships with other people.
Social Network
The advantage created by an individual’s connections in a social network.
Social Capital
A powerful sense of obligation to repay in kind what another has done for or provided for us.
Reciprocation
A business owned by one person, who bears unlimited liability for the enterprise.
Sole Proprietorship
Liability on the part of an owner that extends beyond the owner’s investment in the business.
Unlimited Liability
A legal entity formed by two or more co-owners to operate a business for profit.
Partnership
A document that states explicitly the rights and duties of partners.
Partnership Agreement
The liability of each partner resulting from any one partner’s ability to legally bind the other partners.
Joint and Several Liability
`A document or clause conferring the authority to act as an agent on another’s behalf in a particular context.
Agency Power
A business organization that exists as a legal entity and provides limited liability to its owners.
Corporation
A business organization that is recognized by the law as having a separate legal existence.
Legal Entity
An ordinary corporation, taxed by the federal government as a separate legal existence.
C-Corporation
A document that establishes a corporation’s existence.
Corporate Charter
A document specifying the number of shares owned by a stockholder.
Stock Certificates
The right of stockholders to buy new shares of stock before they are offered to the public.
Preemptive Right
A situation in which the courts conclude that incorporation has been used to perpetuate a fraud, skirt a law, or commit some wrongful act and remove liability protection from the corporate entity.
Piercing the Corporate Veil
A partnership with at least one general partner and one or more limited partners.
Limited Partnership
A partner in a limited partnership who has unlimited personal liability.
General Partner
A partner in a limited partnership who is not active in its management and has limited personal liability.
Limited Partners
A type of corporation that offers limited liability to its owners and passes taxable income or losses on to stockholders.
S Corporation (Subcharter S Corporation)
A form of organization in which owners have limited liability but pay personal income taxes on business profits.
Limited Liability Company
A form of corporation that shields owners from liability and is set up for individuals in certain professional practices.
Professional Corporation
A form of corporation for enterprises established to serve civic, educational, charitable, or religious purposes; not for generation of profits.
Nonprofit Organization
Verification of whether a nonprofit organization is staying true to its stated purpose.
Organizational Test
An organizational relationship that links two or more independent business entities in a common endeavor.
Strategic Alliance
The governing body of a corporation, elected by the stockholders.
Board of Directors
A group that serves as an alternative to a board of directors, acting only in an advisory capacity.
Advisory Board
A facility that provides shared space, services, and management assistance to new businesses.
Business Incubator
An analysis of how a firm plans to create profits and cash flows given its revenue sources, its cost structures, the required size of investment, and sources at risk.
Business Model
A business model based on selling to business customers electronically.
Business-to-Business (B2B) Model
A business model based on selling to final consumers electronically.
Business-to-Consumer (B2C) Model
Web-based business offering participants the ability to list products for consumer bidding.
Auction Sites
A business model in which a website simply provides information about a business, its products, and other related matters.
Information-Based Model
A business model in which a website provides information (content) that attracts visitors, usually with the hope of generating revenue through advertising or by directing those visitors to other websites.
Content-Based Model
A business model in which a website provides a mechanism for buying or selling products or services.
Transaction-Based Model
