small business management chapter 6 planning your path into full-time business

workout

A form of business termination in which the firm's legal or financial obligations are not fully met at closing.

termination

an endgame strategy in which the owner closes down a business

Intangibles

assets, such as patents or trademarks, and liabilities, such as accounts payable, that have no physical existence

replacement value

the cost to acquire an essentially identical asset

strategic partnerships

formal or informal relationship with customers, vendors, or mentors to ensure the success of an entreneurial venture.

Bricolage

refers to the process of analyzing the resources available and creating a product or service from them.

takeover

seizing of control of a business by purchasing its stock to be able to select the board of directors

asset

something the business owns that is expected to have economic vaule in the future.

buyout

the purchase of substantially all of an existing business

buy-in

the purchase of substantially less than 100 percent of a business

revolving credit

a credit agreement that allows the borrower To pay all or part of the balance at any time.

pass off

a type of business transfer where the owner gives the business to someone else without payment.

point of indifference

the price at which a buyer is indifferent about buying or not buying the business

business format franchising

an agreement that provides a complete business format, including trade name, operational procedures, marketing, and products or services to sell

conversion franchising

an agreement that provides an organization through which independent businesses may combine resources

product distribution franchising

an agreement that provides specific brand name products which are resold by the franchisee in a specified territory

trade name franchising

an agreement that provides to the franchisee only the rights to use the franchisor's trade name and/or trademarks

transfer

an endgame strategy in which ownership is moved from one person or group to another.

bankruptcy

an extreme form of business termination that uses a legal method for closing the business and paying off creditors when debts are substantially greater than assets.

serial entrepreneur

person who opens multiple businesses throughout his or her career.

Leveraging Competencies

the practice of an ability to seize upon novel opportunities that become apparent during the conduct of business.

due diligence

the process of investigating a business to determine it's value

Bootstrapping

using low-cost or free techniques to minimize your cost of doing business

effectual reasoning

A logical process in which one analyzes the resources available and restraints on the use of resources to create an attainable goal.

affordable loss

The minimum possible expenditure of capital and other resources in order to bring an entrepreneurial idea to market.

minimum viable product

A concept central to lean business practices where you make a minimum product, but one that can be sold. By selling to customers and collecting feedback, an entrepreneur can develop a product at minimum cost.

caveat emptor

Latin term for "buyer beware" philosophy sometimes used by businesses to put the burden for consumer protection on to the costumer.

franchise

a legal agreement that allows a business to be operated using the name and business procedures of another firm.

walkaway

Business termination in which the entrepreneur ends the business with its obligations met.

casual (predictive) reasoning

The process of setting a goal and then determining the strategy and resources required to attain the goal.

spin off

a business that is created by separating part of an operating business into a separate entity

synergy

a combination in which the whole is greater than the sum of it's component parts

start-up

a new business that is started from scratch

sell off

a type of business transfer where the seller gets only a fraction of the value of the business.

Lean Business Practices

addresses the specifics of new business Creation, particularly internet-based businesses, where rapid experimentation and constant monitoring of viewers choices are possible

discounted cash flow

cash flow that have been reduced in value because they are to be received in the future

net realizable value

the amount for which an asset will sell, less the costs of selling

book value

the difference between the cost of a depreciable asset and its related accumulated depreciation