1.01 - Explain the nature of business plans (MN).

Venture

A business or business project, usually new.

Business plan

A company's blueprint for success; shows how the business works now and how it is intended to work in the future; the written business model.

Letter of intent

A document communicating what a person or business intends to do within (or during) a specific timeframe.

Balance sheet

A financial statement that captures the financial condition of the business at that particular moment.

Income statement

A financial summary that shows how much money the business has made or has lost over a period of time; also called the profit-and-loss statement.

Appendix

A segment added to the end of a document; includes supporting information.

Marketing plan

A set of procedures or strategies for attracting the target customer to a business.

Market Analysis

A systematic study of the market.

Marketing

An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relations in ways that benefit the organization and its stakeholders.

Resources

Any item that is used to accomplish another activity, such as producing/providing goods and services.

Equity

Assets minus liabilities; also known as stockholders' (or shareholders') equity, book value, and net worth.

Strategic plan

Long-range plan for the company as a whole; usually three to five years out.

Profit

Monetary reward a business owner receives for taking the risk involved in investing in a business; income left once all expenses are paid.

Funding

Money available to a business from one or more sources.

Bottom line

Net outcome.

Human resources

People who work to produce goods and services.

Liabilities

Responsibilities of the business, especially legal responsibilities.

Sales volume

The amount of a firm's sales; usually expressed in dollars.

Business structure

The company's configuration of employees for accomplishing specific business tasks; how the business is organized.

Business model

The company's method or plan for making money.

Operations

The day-to-day activities required for continued business functioning.

Executive summary

The most important part of a company's business plan because it gives an overview of the entire document; used to determine whether it is worthwhile to read any further.

Cash flow

The movement of funds into and out of a business; determines the amount of cash the business has to work with at any given time.

Financial plan

The part of a company's business plan that shows how the business has performed (or is likely to perform) financially; how a business intends to use its money.

Target market

The particular group of customers a business seeks to attract.

Table of contents

The portion of a document in which the sections are listed with their page numbers for easy access.

Management

The process of coordinating resources in order to accomplish an organization's goals.

Accounting

The process of keeping and interpreting financial records.

Finance

The process of obtaining funds and using them to achieve the goals of the business.

Life cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market.