Small Business Management
Start-up
A new business that is started from scratch.
Serial Entrepreneur
A person who opens multiple businesses throughout his or her career.
Bricolage
A word derived from the French verb bricoler ("to tinker"). In entrepreneurial usage bricolage refers to the process of analyzing the resources available and creating a product or service from them.
True
As a firm's successor-to-be, an individual gains responsibility, authority, experience, and skill in various activities and functions of the firm.
Synergy
A combination in which the whole is greater than the sum of its component parts.
True
The two main approaches to selling online are using a site like eBay and by the owner.
Reverse Auction
An auction in which the low bid gets the business or wins.
episodic business
A temporary, project-based, or sporadically operating business.
Pass Off
A type of business transfer where the owner gives the business to someone else without a payment. This is most often done to maintain employment for the staff and service for the customers, but the business is not profitable enough to give the original owner any revenue.
Blog
A web page in which entries are posted in reverse chronological order (i.e., the most recent at the top of the page).
RSS Feed
An Internet messaging service that pushes (sends) whatever web material you specify to subscribers to that feed.
Termination
An endgame strategy in which the owner closes down a business.
Licensing
Documented permission from the government to run your business.
Door-to-door selling
Door-to-door selling is the practice of taking product directly to the homes or places of business of potential customers and attempting to sell the product immediately.
Transfer
An endgame strategy in which ownership is moved from one person or group to another.
7 Steps
1. Conduct - 2. Study- 3. Make - 4. Interview- 5. Develop - 6. Negotiate - 7. Obtain
pop-up business
A temporary business that offers services or products in a variety of locations for a brief period at a time. What characterizes a pop-up business from any other is its temporary nature.
Sell Off
A type of business transfer where the seller gets only a fraction of the value of the business. This is most often done to maintain employment for the staff and service for the customers, but the business can generate only a small amount of profit with which the original owner can be paid, or the new owner does not have much money to buy the business.
Conversion Franchising
An agreement that provides an organization through which independent businesses may combine recourses.
Lean business practice
An application created by Eric Ries that addresses the specifics of new business creation, particularly Internet-based businesses, where rapid experimentation and constant monitoring of viewers' choices are possible.
Network marketing
An approach to selling in which the salesperson recruits customers to become distributors of the product or service to others.
Bankruptcy
An extreme form of business termination that uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets.
Knowledge of your limitations
Nobody can know and be expert at everything. You must know your weaknesses, and be quick to obtain assistance in those areas.
True
The advantages and disadvantages of a buy-in are alike: the previous owner and management continue to remain with the business.
Heuristic
A commonsense rule; a rule of thumb.
Book Value
The difference between the original cost of an asset and the total amount of depreciation expense that has been recognized to date.
Revolving credit
A credit agreement that allows the borrower to pay all or part of the balance at any time; as the loan balance is paid off, it becomes available to be borrowed again.
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.
Incubator
A facility that offers subsidized space and business advice to companies in their earliest stages of operation.
Workout
A form of business termination in which the firm's legal or financial obligations are not fully met at closing.
Home Party
A business model in which the entrepreneur arranges a customer to host a party, inviting friends, family, and neighbors. During the party, the entrepreneur demonstrates products and accepts orders for future delivery.
Tweet
A 140-character-or-less message sent using the Twitter web service.
Caveat Emptor
A Latin expression that means "let the buyer beware," which has been made into a philosophy sometimes used by businesses to put the burden for consumer protection onto the customer.
Part-time business
A business in which the owner either participates fewer than 35 hours per week or operates on a temporary or seasonal basis while maintaining employment elsewhere for wages or salary.
Spin-Off
A business that is created by separating part of an operating business into a separate entity.
Walkaway
Business termination in which the entrepreneur ends the business with its obligations met.
Strategic Partnerships
Formal or informal relationships with customers, vendors, or mentors to ensure the success of an entrepreneurial venture.
Zoning laws
Government specifications for acceptable use of land and buildings in particular areas.
False
In the past, home businesses were strongly recommended because they could be conducted completely on the web.
Registration
Information provided to the government concerning the existence of, name of, nature of, and contact information for your business.
False
On starting late, it is impossible for an entrepreneur to plan and take steps to improve his or her chances of selling his or her firm.
False
One disadvantage of business ownership is the capability to protect income by making use of noncash deductions to decrease income taxes.
Founders
People who create or start new businesses.
True
Permanence is tied to one's customers considering the business to be legitimate.
Variance
Permission from a government organization to act differently that the laws state.
False
Professional management is an issue of a person's education and credentials.
Intellectual Property
Property coming from some sort of original thought; for example, patents, trade secrets, trademarks, and copyrights.
Asset
Something the business owns that is expected to have economic value in the future.
Canniabalizing
Taking business away from your employer.
True
The founder's early actions greatly increases the probability of running a successful start-up.
Volatility
The frequency of business starts and stops.
E-commerce
The general term for conducting business on the Internet.
Permanence
The impression of long-term continuity a business gives others.
Covenant
The limitations imposed on an individual's property by the neighborhood group.
Affordable Loss
The minimum possible expenditure of capital and other resources in order to bring an entrepreneurial idea to market.
Leverage contingencies
The practice of and ability to seize upon novel opportunities that become apparent during the conduct of business.
Point of Indifference
The price at which a buyer is indifferent about buying or not buying the business.
Hybrid entrepreneurship
The process of initiating a business while simultaneously remaining employed for wages or salary.
Bootstrapping
Using low-cost or free techniques to minimize your cost of doing business.
part-time employment
Working 35 or fewer hours a week.
Leadership skills
You must be able to communicate your vision for the company to family members and to employees, getting them to "buy in" and make the business goals their goals.
People skills
You must be able to effectively deal with people, with other family members in the business, with employees, suppliers, regulators, and most importantly, with customers.
Financial Knowledge
You must understand the financial needs and resources of the business and industry, and be competent to negotiate with lenders, investors, vendors, and customers.
Technical Knowledge
You must understand the science, technology, and methodology of the industry of which the business is part.
Business-to-business (B2B)
Business-to-business transactions using e-commerce.
Delegation
The assignment of work to others over whom you have power.
Multichannel Marketing
The use of several different channels to reach your customers; for example, a website, direct mail, and traditional retailing.
Intangibles
Assets, such as patents or trademarks, and liabilities, such as accounts payable, that have no physical existence.
True
Most part-time small businesses need a website.
Sponsored Link
A form of paid advertising that gets your company's website at the top of a search list.
Employee Stock Ownership Program (ESOP)
A formalized legal method to transfer some or all of the ownership of a business to its employees.
Search Engine Optimization (SEO)
A general approach to website design intended to result in the site being displayed toward the beginning of a search engine's (e.g., Google, Yahoo!, etc.) listing for that term.
Reciprocal link
A listed, live connection to a different website, which in turn displays a similar link to the first website.
Effectual Reasoning
A logical process in which one analyzes the resources available and restraints on the use of resources to create an attainable goal.
Reserve Price
A minimum acceptable selling price in an auction. If the bidding does not exceed the price, the sale will not go through.
Makers
A modern term for an inventor, in particular, an inventor who uses modern techniques like 3-D software and 3-D printers or do-it-yourself electronics to create new items.
Venue
A place where something takes place.
Franchise
A prepackaged business bought, rented, or leased from a company called a franchisor.
Consumer
A private individual or household that is the end user of (the entity that "consumes") a product or service.
Conflicts of interest
A situation in which a person faces two or more competing standards or goals.
Accelerator
An organization that supports start-ups, typically of a particular type (e.g., Internet, biotech, fashion, sports, women-owned firms, etc.) with a financial investment, free or inexpensive office space, mentoring, a variety of free or low-cost support services, and other resources. The goal of an accelerator is to accelerate a start-up from its early stages to being ready to pitch for investment. Most accelerators take an equity stake in the companies they help.
Aggrandizing
Attempting to make your business or yourself seem more accomplished or grander than reality.
Business-to-consumer (B2C)
Business-to-consumer transactions using e-commerce.
Discounted cash flows
Cash flows that have been reduced in value because they are to be received in the future.
Outsourcing
Contracting with people or companies outside your business to do work for your business.
Poisoning the well
Creating a negative impression among your employers' customers.
False
Delegation is of no help when an entrepreneur wants his or her business to operate in two or more places at once.
Takeover
The seizing of control of a business by purchasing its stock to be able to select the board of directors.
Net realizable value
The amount for which an asset will sell, less the costs of selling.
Replacement Value
The cost to acquire an essentially identical asset.
Casual (predictive) reasoning
The process of setting a goal and then determining the strategy and resources required to attain the goal.
Buyout
The purchase of substantially all of an existing business.
Buy-In
The purchase of substantially less than 100 percent of a business.
Earnings multiple
The ratio of the value of a firm to its annual earnings.
full-time employment
Working more than 35 hours a week.
Moonlighting
Working on your own part time after your regular job.
Informational website
An Internet site designed to introduce and explain a business to others.
False
An advantage of a start-up is that the owner of the start-up can make use of "legacy" locations, buildings, software, and equipment to boost productivity.
Business Format Franchising
An agreement that provides a complete business format, including trade name, operational procedures, marketing, and products or services to sell.
Product Distribution Franchising
An agreement that provides specific brand-name products that 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.
Due Diligence
The process of investigating a business to determine its value and potential for investment.