BM133 Introduction to Small Business Management - Ch 4

customer segment

A group or subgroup of potential purchasers that can be approached in a coherent manner.

license

A legal agreement granting you rights to use a particular piece of intellectual property

royalty

A payment to a licensor based on the number or value of licensed items sold

pilot test

A preliminary run of a business, sales effort, program, or Web site with the goal of assessing how well the overall approach works and what problems it might have

creativity

A process producing an idea or opportunity that is novel (NEW) and useful, frequently derived from making connections among distinct ideas or opportunities

entrepreneurial alertness

A special set of observational and thinking skills that help entrepreneurs identify good opportunities; the ability to notice things that have been overlooked, without actually launching a formal search for opportunities, and the motivation to look for opportunities

A/B testing

A way to check customer reaction to websites describing your product or service. Two versions (version "A" and version "B") of the site are posted and are served up randomly to prospective customers. The version of the website that gets the most commitments from customers is the one kept and the less attractive site is revised and the two versions tested until one revision gets consistently superior customer reactions.

target market

Also called "serviceable obtainable market" or SOM; it refers to the group of customers in the area you plan to serve who would be likely to be interested in your products, or those of competitors. Target markets can refer to individuals or segments

causal model

In entrepreneurship, the causal approach is one in which you want to create a product or service that does not exist and to achieve that goal, you have to cause the product or service to exist. This can mean you will have to learn new skills, or find others to help you achieve your end.

Effectuation Model

In entrepreneurship, the effectuation model starts with the knowledge, skills and resources you have and you use that to provide a product or service that meets the needs you see in the market.

RBI screen

Really Big Idea; a fast technique for making initial assessments (called screens) of prospective business ideas based on five questions

opportunity recognition

Searching and capturing new ideas that lead to business opportunities. This process often involves creative thinking that leads to discovery of new and useful ideas

S.C.A.M.P.E.R.

Substitute, Combine, Adapt, Magnify/Modify, Put to other uses, Eliminate, Rearrange/Reverse

feasibility

The extent to which an idea is vi-able and realistic and the extent to which you are aware of internal (to your business) and external (industry, market, and regulatory environment) forces that could affect your business

conversion rate

The measure of how many visitors to your Web site (or people who click on your online advertisement) are actually willing to make a commitment to the product or service promoted on the site

licensee

The person or firm which is obtaining the rights to use a particular piece of intellectual property

licensor

The person or organization which is offering the rights to use a particular piece of intellectual property

freemium

a business model, an approach to pricing that connects free and premium products or services.

feasibilty study

a study that evaluates the potential of a business opportunity by studying five primary areas in depth: the overall business idea, the product/service, the industry and market, financial projections (profitability), and the plan for future action

imitative strategy

an overall strategic approach in which the entrepreneur does more or less what others are already doing

gain

any outcome (product, service, situation) customers or potential customers would like to encounter or be able to depend on. It is one of the 2 driving forces of creating new products or services. The other driving force is pain.

pain

any problem, annoyance, source of aggravation, shortcoming of suboptimal situtation customers or potential customers face

radical innovation strategy

rejecting existing ideas, and presenting a way to do things differently

value proposition

small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition.

incremental strategy

taking an idea and offering a way to do something slightly better than it is done presently

business models

ways to identify and organize key information on a business and how it achieves its goals. Business models can be analytical tools or a way to do business.