Entrepreneur Exam2

timing purchases

a method of controlling the timing of cash outflows that is invisible to suppliers and vendors.

wholesaler

a middleman business which buys (typically in large quantities) and sells (typically in smaller quantities) to businesses rather than consumers.

cash disbursements budget

a schedule of the amounts and timings of payments of cash out of a business.

payables

amounts owed to vendors for merchandise or services purchased on credit (see receivables).

transfer

an endgame strategy in which ownership is moved from one person or group to another. -860,000 family business successions -1 million business sales, transferred to people other than family -succession/business sales typically the largest small business, high-performing small businesses and high-growth ventures

termination

an endgame strategy in which the owner closes down a business. -more likely young firms, 4yrs or less -walkaway, workout, bankruptcy

estate freeze

an estate planning strategy which focuses on transferring assets to heirs when the assets cost are low. - a form of managing transfers within in a family

bearer

any person or business entity who possesses a security.

cash equivalents

assets that may be quickly converted to cash.

factoring receivables

borrowing money secured by a firm's accounts receivable.

noncore projects

revenue-producing tasks and activities related to, but not part of, the primary strategy of a business.

growth trap

a financial crisis that is caused by a business growing faster than it can be financed.

retailer

a middleman business which sells to consumers or end-users of a product (typically in single or small quantities).

overdraft

a negative balance in a depositor's bank account.

cash receipts budget

a schedule of the amounts and timings of the receipt of cash into a business.

manufacturers' suggested retail price

a target price set by a manufacturer for a product or service intended to provide profit for each intermediary in the distribution channel.

Consolidation

a transfer method in which a small business is bought by a larger firm for the purpose of quickly growing the larger firm.

Bot

a web-based program that uses artificial intelligence techniques to automate tasks such as searches

reconciling

an accounting that identifies the causes of all differences between book and bank balances.

e-tailer

an electronic retailer; a store that exists only on the Internet.

clearinghouse

an entity that processes checks and electronic fund transfers for banks and other financial organizations.

cash budget

identifies when, how, and why cash is expected to come into the business, and when, how, and why it is expected to leave.

comprehensive budget

often referred to as a master budgets.

success profits

returns at levels higher than the entrepreneur could make working for other.

substitution profits

returns intended to equal and replace the salary or wages the entrepreneur could draw working for someone else.

Liability of Newness

the set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.

Employee stock ownership plan

a formalized legal method to transfer some or all of the ownership of a business to its employees.

agent

a middleman business which represents a manufacturer's product or service to other business-to-business middleman firms.

recievables

amounts that are owed to a business for merchandise that was sold on credit (see payables).

bankruptcy

an extreme form of business termination which uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets. -have little or no chance of earning back the money to pay off major debt

short-term debt

any debt that must be paid in less than one year from the date of the financial statement on which it is reported.

indirect exporting

exporting using intermediaries such as agents, export management companies, or export trading companies.

trade discounts

percentage discounts from gross invoice amounts provided to encourage prompt payment.

noncash incentives

rewards that do not require payment of cash, such as stock options, compensating time off, or added vacation days.

marketable securities

stocks and bonds that are traded on an open market.

manufacturer

the entity which producers a product or service is sold.

Market segmentation

the process of dividing the market into groups that have somewhat homogenous needs for a product or service

guerilla marketing

the use of creative and relatively inexpensive ways to reach your customer. Examples include door-knob hangers, flyers, under windshield wipers, T-shirts, balloons, and messages written on sidewalks.

Undifferentiated Strategy

a marketing strategy that uses no segmentation; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix

direct mail

a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are mailed directly to customers from which they can mail, call, or e-mail an order. Direct faxing and direct e-mailing are more modern forms.

born international

a new firm that opens a website immediately, thus being exposed to customers from around the world.

sheltered workshop

a nonprofit organization or institution that provides business services by using handicapped or rehabilitated workers.

discounts for prompt payment

a reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner.

charge back

a reduction in the bank account of a merchant by a credit card company.

non sufficient funds

a situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal to or greater than the amount of the check.

Marketing Plan

a systematic written plan of all phases of marketing for a business, including information on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition.

liquidity enhancement

an estate planning strategy which focuses on generating cash to cover likely estate taxes. -a form of managing transfers within in a family

tax management

an estate planning strategy which focuses on minimizing estate tax payments. -a form of managing transfers within in a family

contract manufacturing

an existing firm with the correct manufacturing capabilities makes your product for you.

walkaways

business terminations in which the entrepreneur ends the business with its obligations met. -business could be successful or unsuccessful at closing -pay off all debt before closing it down

deposits and progress payments

cash payments received before product is completed or delivered.

Ethnographic Research

data gathered by sample observations-seeing what consumers do, rather than asking them

direct exporting

exporting using no intermediaries.

freight forwarders

firms specializing in arranging international shipments—packaging, transportation, and paperwork.

just-in-time inventory

having just enough product on your shelves to meet the immediate purchases. This usually requires frequent shipment from your supplier.

direct sales

methods of going directly to your customer in order to sell your product. Vending machines, door-to-door salespeople, leasing space at a craft fair, farmer's markets, party sales, and most industrial sales are methods of direct selling.

demand deposits

money held in checking and savings accounts.

cash

money that is immediately available to spend.

Primary Research

new information collected to solve a problem at hand or answer current questions

commercial paper

notes issued by credit-worthy corporations.

traffic generators

other businesses that bring customers (generate traffic) to the area.

direct competition

other companies that make a similar product or provide a similar service; for example, direct competition for coca cola includes all other soft drink providers

Serial entrepreneurs

people who open multiple businesses throughout their career.

direct response advertising

placing an advertisement in a magazine or newspaper, on television or radio, or in any other media. The ad contains an order blank with a phone number and e-mail or regular mail address with the intent of having the customer place an immediate order.

Slack Resources

profits that are available to be used to satisfy the preferences of the owner in how the business is run.

Open-ended question

questions that allow respondents to express themselves as they choose; for example, "What do you like about this book?"

Categorical questions

questions that are answered by selecting the proper category; for example, "What is your ethnicity? White, African American, Hispanic, Asian, American Indian, Other."

supplemental profits

returns above the costs intended as a secondary income for entrepreneurs (where self-employment is secondary to their main job).

direct marketing

selling your goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results.

Marketing Research

systematic collection of interpretation of data to support future marketing decisions

currency

the bills and coins printed by governments to represent money.

Differential Advantage

the characteristics that separates one company from another in product, price, promotion, and for distribution

Liquidation

the popular name for a chapter 7 bankruptcy in which a bankrupt firms assets are sold by the bankruptcy trustee and the proceeds used to pay the firms debts.

Reorganization

the popular name for a chapter13 bankruptcy in which a bankrupt firm continues to operate while paying off debts identified by the bankruptcy trustee.

consignment

the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold.

Business Life Cycle

the sequence or pattern of developmental stages any business goes through during its life span.

company book balance

the sum of cash inflows and cash outflows recorded in the firms accounting records.

bank ledger balance

the sum of deposits and withdrawals recorded in a bank's accounting records.

bank available balance

the sum of money that has actually been received and paid out of a depositor's account.

cash-to-cash cycle/ operating cycle

the time that is required for a business to acquire resources, convert them into product sell the product, and receive cash from the sale.

multichannel marketing

the use of several different channels to reach your customers, for example, a website, direct mail, and traditional retailing.

workouts

a form of business termination in which the firms legal or financial obligations are not fully met at closing. -arranges to pay off debts after the business is already closed

Focus group

a form of data gathering using a small group led by a moderator

telemarketing

contact via telephone for the express purpose of selling a product or service. _____ can either be inbound (customer calls company) or outbound (company calls customer).

barter

the practice of trading goods and services without the use of money.

money

an accepted medium of exchange.

Secondary Research

information already collected for some other purpose than the current problem or questions

Harvest

recover value through a sale of a firm or its assets.

mail order

sales made from ads in newspapers or magazines, with purchases made online or by phone as well as by mail.

gaming the payment process

using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided.

float

delays in the movement of money among depositors and banks.

channels

people and firms who connect producers of goods and services with customers.

profit

the amount that revenues exceed expenses.

Initial Public Offering (IPO)

Transfer method describing the first-time public sale of a stock listed on a public stock exchange. -where a business sells its stock to the public on a major stock exchange

fulfillment center

a company that will warehouse your products and fill your customers orders for you.

survey

a data-collection method using a questionnaire- in person, on the phone, on paper, or on the internet

letter of credit

a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms.

documentary draft

a draft which can be exercised only when presented with specified shipping documents.

concentrated strategy

a marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group

differentiated strategy

a marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs

microinventory

a set of goods or service that consists of only one or a few items.

scalar question

questions that are answered by some sort of scale ; for example, "on a scale of 1 to 5, how do you like this book?"

Dichotomous Questions

questions that have only two possible choices; for example, "Have you shopped here before?"

Indirect competition

companies that provide alternatives that are dissimilar to your product/service that consumers might choose to meet a similar need; for example, indirect competition for Coca Cola includes any other company providing items to quench thirst