Entrepreneurship Chapter 3 Vocabulary

Trade Associations

organizations made up of professionals in a specific industry

- a business plan explains the idea behind your business and spells out how your product or service will be produced and sold. - a business plan sets specific objectives and describes the backgrounds and experience of the leadership team of the business. - a business plan describes the backgrounds and experiences of the leadership team of the business.

purposes of the Business Plan

What are resources available to you for completing a business plan?

the SBA, the SBDC, SCORE, your local chamber of commerce, trade associations, and professional business consultants

How long do most entrepreneurs spend development their business plan?

50-100 hours

Pro Forma Financial Statement

a financial statement based on projected revenues and expenses

Cover Letter

a letter that introduces and explains an accompanying document or set of documents

Executive Summary

a short restatement of the report portion of a business plan

Business Plan

a written document that describes all the steps necessary for opening and operating a successful business

Harvest Strategy

an exit strategy, or the way an entrepreneur intends to extract, or harvest, his or her money from a business after it is operating successfully

What part of the business plan includes supporting documents?

appendix

Statement of Purpose

brief explanation of why the writer of a business plan is asking for a loan and an explanation of what he or she plans to do with the money

Small Business Development Centers (SBDC)

centers that provide management assistance to current and prospective small business owners

What is included in the Introductory Elements of a business plan?

cover letter, title page, table of contents, statement of purpose, and executive summary

Tips on business plan

create an attractive document that is neat, well-organized, and inviting to read

- Introduction: a detailed description of the business and its goals, the ownership of the business and the legal structure, the skills and experience you bring to the business, and the advantages you and your business have over your competition - Marketing: describe the products/services you will offer, describe the market, describe the industry (will need to research), and describe your location - Financial Management: identification of risks, financial statements, funding request and return on investment - Operations: *Explain how your business will be managed on a day-to-day basis *Discuss hiring and personnel procedures *Include information on insurance and lease or rental agreements *Describe the equipment that will be necessary for production of your products and services *How the products or services will be produced and delivered *Should have a harvest strategy (or exit strategy)-is the way an entrepreneur intends to extract, or harvest, his or her money from a business after it is operating successfully

each section of the main body

Service Corps of Retired Executives (SCORE)

group made up of retired executives who volunteer their time to provide entrepreneurs with real-world advice and know-how

What does the title page include?

includes the name of your company, the date, the owner of the company, the title of the owner, and the address and phone number of the company

Small Business Administration (SBA)

independent agency of the federal government that was created to help Americans start, build, and grow businesses

How long should the statement of purpose be?

no more than 1 or 2 paragraphs

In this section, you should explain how the business will be managed on a day-to-day basis and discuss hiring and personnel procedures.

operations sections of the business plan