Entrepreneurial Small Business 5th Edition; Chapter 8

Elevator Pitch

A 30-second (100 word or less) action-oriented description of a business designated to sell the idea of the business to another.

Operational Plan

A business plan designed to be used internally for management purposes.

Informational Plan

A business plan that gives potential customers or suppliers information about the company and its product or service.

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.

Invention Plan

A business plan that provides information to potential licensees. Invention plans focus on the details of an invention, including intellectual property rights.

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.

New Entrants Business

A firm whose product or service is established elsewhere, but is new to this market.

Pioneering Business

A firm whose product or service is new to the industry or is itself creating a new industry.

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.

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.

Mission Statement

A paragraph that describes the firm's goal and competitive advantages.

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.

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.

Private Placement Memorandum (PPM)

A specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments.

Vision Statement

A very simple 5- to 10- word sentence or tagline that expresses the fundamental idea or goal of the firm.

Screening Plan

Also called a mini-plan, gives the basic overview of the firm and a detailed look at the financials.

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.

Data Room

An online repository (e.g., Dropbox, Box, ShareVault) for the documentation that back ups 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.

Preselling

Involves introducing your future product to potential customers and taking orders for late delivery.

Tagline

Memorable catchphrase that captures the key idea of a business, its service, product, or customer (also known as a slogan).

Test Martketing

Selling your product or service in a limited area, for a limited time.

Working Capital

The cash immediately available to the firm for the day-to-day expenses and operations of the firm.

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.

Internal Understanding

The extent to which employees, investors, and family members involved in the business know that business's purpose and operations.

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

The name of a slideshow presentation that summarizes a business or more often a business plan.

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

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.

Due Diligence

The process of investigating a business to determine its value and potential for investment.