Intro to Business - Chapter 6: Entrepreneurship

5 P's of entrepreneurship

Purpose, Passion, Persistence, People, Profit

entrepreneur

a person who starts a new business/purchases an existing business; anyone has this opportunity

mission statement

a sentence describing the purpose of the business, 1-2 pages

business plan

a written statement of goals & objectives for a business w/ a strategy to achieve them

market

all the people & organizations that might purchase a product

collateral

an asset pledged that will be claimed by the lender if the loan is not repaid (ex. car, house)

debt financing

borrowing money that must be repaid for use in the business (don't actually lose business)

equity financing

capital brought into the business in exchange for a percent of ownership in the business (ex. Shark Tank)

trait

distinguishing characteristic/quality that makes each person unique

market research

gathering & analyzing information about a business

transferrable skills

help an individual perform in the workplace/gain success in a career; foundation skills (ex. basic skills apply to any professional position, problem-solving & decision-making skills)

venture capitalists

investors who form partnerships/groups to pool investments into a business

skills of the trade

job-specific skills, necessary to perform the required work-related tasks of a position

venture capital

money invested in a business by investors who form partnerships/groups to pool investments

job-specific skills

necessary to perform the required work-related tasks of a position; skills of the trade

angel investors

private investors who fund start-up businesses (usually get a product back for donating money)

pro forma income statement

projects revenues & expenses to show whether the business is profitable

franchise

proven business system, business known in the market

capital structure

refers to the way a business is financed; determines who has control of the business

pro forma cash flow statement

reports anticipated flow of income & expenses for the business

pro forma balance sheet

reports assets, liabilities, & net worth of the business

mentor

someone w/ experience who can provide advice, suggestions, & ideas

start-up capital

the money necessary to start & open a business

cash flow

the movement of money into & out of a business, important for existing businesses

assets

the property/items of value a business owns

entrepreneurship

willingness & ability to start a business