Small Business Management
business plan
business plan A document designed to detail the major characteristics of a firm—its product or service, its industry, its market, its manner of operating (production, marketing, management), and its financial outcomes on the firm's present and future.
test marketing
test marketing Selling your product or service in a limited area, for a limited time.
traction
traction Those characteristics of your business that show it is making progress, such as making sales, recruiting customers, being sold in more locations, or achieving milestones that reflect a firm's growth or development.
vision statement
vision statement A very simple 5- to 10-word sentence or tagline that expresses the fundamental idea or goal of the firm.
working capital
working capital The cash immediately available to the firm for the day-to-day expenses and operations of the firm.
cover letter
cover letter A one-page document on business stationery (also called letterhead ) that introduces the business plan and the business owner to the recipient and indicates why the recipient is being asked to read the plan.
data room
data room An online repository (e.g., Dropbox, Box, ShareVault) for the documentation that backs up and details the specifics of your business and business plan. The contents of the data room are very similar to those of the three-ring-binder personal edition of the plan held and used by the founder.
due diligence
due diligence The process of investigating a business to determine its value and potential for investment.
elevator pitch
elevator pitch A 30-second (100 words or less) action-oriented description of a business designed to sell the idea of the business to another.
executive summary
executive summary A one- to two-page (250-500 words) overview of the business, its business model, market, expectations, and immediate goals. It is typically put at the start of a business plan and is the most popular summary form for a business plan.
external legitimacy
external legitimacy The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business or the owner's family.
information plan
informational plan A business plan that gives potential customers or suppliers information about the company and its product or service.
internal understanding
internal understanding The extent to which employees, investors, and family members involved in the business know the business's purposes and operations.
invention plan
invention plan A business plan that provides information to potential licensees. Invention plans focus on the details of an invention, including intellectual property rights.
Key employee/ partner plan
key employee/partner plan A business plan that provides information on the company, product/service, market, and critical risks to prospective business or marketing partners or to prospective key employees.
micro-commitment
micro-commitment An online action that is quick and easy to make and connects you to the message, but does not require a substantial personal or financial commitment, such a liking or favoriting a post or reposting it to your own social media account.
mission statement
mission statement A paragraph that describes the firm's goals and competitive advantages.
new entrant business
new entrant business A firm whose product or service is established elsewhere, but is new to this market.
offering circular
offering circular (OC) A legal document required by firms seeking funding through equity crowdfunding platforms created under the JOBS Act. An OC contains SEC required forms, an offering memorandum (which is almost identical to a PPM), and the financial statements of the firm.
operational plan
operational plan A business plan designed to be used internally for management purposes.
pioneering business
pioneering business A firm whose product or service is new to the industry or is itself creating a new industry.
pitch
pitch The name given to the formal presentation of a slideshow summarizing your business plan given before judges or potential investors or partners.
pitch deck
pitch deck The name of a slideshow presentation that summarizes a business or more often a business plan.
preselling
preselling Involves introducing your future product to potential customers and taking orders for later delivery.
private placement memorandum
private placement memorandum (PPM) A specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments.
proof of concept website
proof-of-concept website An Internet-based type of business plan providing information or demonstration of a product or service designed to solicit information on customer interest.
proprietary technology
proprietary technology A product or service or an aspect of one that is kept as a trade secret or is protected legally using patent, copyright, trademark, or service mark.
research and development
research and development (R&D) The part of a business (and a business plan) that is focused on creating new products or services and preparing new technologies, ideas, products, or services for the firm's market.
risks
risks The parts of a business or business plan that expose the firm to any kind of loss—profits, sales, reputation, assets, customers, and so on.
screening plan
screening plan Also called a mini-plan, gives the basic overview of the firm and a detailed look at the financials.
signature block
signature block A snippet of text (or text and images), typically inserted at the bottom of an email, that contains contact information for the sender of the email.
storytelling arcs
storytelling arcs There are several classic structures to stories, such as beginning, middle, and end, or a multiple-step journey, or a situation-complication-resolution.
tagline
tagline Memorable catchphrase that captures the key idea of a business, its service, product, or customer (also known as a slogan).