SBM exam 2
sponsored content
paying for a local organizations needs in exchange for recognition
original identity
business product/service name including logos, symbols, characteristics, etc
caveat emptor
"let the buyer beware" basic tenet of business law
vision statement
5-10 word sentence that is impressionable. w/ a tagline and a mission statement
incubators
87% of start-up's using an _______ are still in operation
the organization
components and supports available to the firm. includes key personnel and key activities
idea evaluation
concept testing and business analysis
decision maker
customer role- describes person in an organization that chooses the product/service. determines what will be bought for end users
me too enterprises
customers are familiar and offer some protection from failure. can be difficult to differentiate your business from others. location is often the advantage. best predictors of success is the level of experience of FOUNDERS
predetermined market segments
geographic, demographic, benefit, and psychographic segmentation. specialized customer profiles based on the combos
raider
gets control without permission of all owners
franchisor
grants legal right to sell a company's product. provides marketing
buy in
acquiring some (but not all) ownership
book value
acquisition cost minus depreciation. internally developed assets. deprivation is arbitrary but system method of transferring expense
elevator pitch
action-oriented description of your business designed to open the door to a more in depth dialogue. 4 success factors- hook, focus, support, and ask
revolving credit
allows borrowers to pay all or part of a loan at any time
franchise
allows one firm to operate using the name and business process of another firm
brokers
always try to get the highest price. responsible for advertising and facilitating sales of business
leveraging contingencies
another way of saying "recognizing and using the opponent"
primary research
answers a specific marketing question. ethnographic research, focus group, or survey
budget cycle
applied to the schedule and process for setting schedule to make purchases
operational plan
business plan designed to be used for management purposes
feedback
communicating within to an organization about how outputs worked or are received
idea screening
market trends and return on investment
private placement memorandum
offering circular used for equity crowdfunding under JOBS ACT
casual (predictive) reasoning
useful technique whether to run a business full-time or part-time
core product
basic description of what a company does. captured small amount of whats special. linked to NAICS code
appendixes
goal is to provide the most important supporting information that helps explain the significant selling points of a firms plan
influencers
making suggestions/recommendations to people in any of these roles
augmented product
packaging, quality level, brand name. has features that is different from competitors
risks
parts of business plan that expose firm to any kind of loss
bricolage
practice of using whatever you have on hand
point of indifference
price buyer is indifferent about buying or not buying a business
take over
public business by controlling the stock business
earnings multiplier
ratio of value of firm to annual revenues. firms value divided by actual/expected annual earnings
target market
segments you select on which to target your market efforts
purchasing process
sequence of steps an individual goes through in make/buy of the product/service
total available market
TAM. all people/organization in a region who might consider a product/service being offered
pivot
change of direction in an entrepreneur/firms thinking based on new data and other findings
perishability
service that if not used when offered cannot be saved for later service or consumption
informational plan
business plan that gives potential customers/supplies information about the company and the product/servide
market research
can verify the size of the potential market
business plan
details major characteristics of a firm (product/service, industry, market, manner of operating, and financial outcomes) emphasizing the firms present and future. about 18 pages
serial entrpreneur
an entrepreneur may close one firm to start another
asset valuation
assumes the firms value is assest minus liabilities. time consuming. 2 major problems- estimations do not consider value of an ongoing firm over value of its identifiable assets. difficult to separately identify and value all the assets
storytelling arcs
beginning, middle and end
synergy
combination when the whole is greater than the sum of its component parts
test market
selling product/service in a limited area for a limited time
commercialization
process of making new product available to customers. many businesses do not face problems here
market segmentation
process of dividing a market into groups that have somewhat homogenous needs. to identify the best market for the good/service
impression
when someone notices the promotional effort
end user and purchaser
when you buy a product/service and use it yourself
discounted cash flows
reduces the value of the business' cash flow because they'll be received in the future. high problematic
financial summary
starts with a paragraph showing the overall financial results in sales and profits
testimonials
statement thats publicly repeated and attributed to the person that made it
transfers
succession ________ a firm. endgame strategy is ownership moved from one person/group to another
product life cycle
1. introduction 2. growth- maximize market shares 3. maturity- occurs when growth slows 4. decline
penetrated market
PM. size of target market
serviceable available market
SAM. customer within a geographic reach of a firm
serviceable obtainable market
SOM. customer that a firm expects to be interested in its product/service actual number of customers in an operating firm
lean business practice
eliminating waste and producing a minimum viable product
total product
entire bundle of your product/service you offer
replacement value
estimates what an identical asset would cost to acquire and prepare for service
tangibility
ex: bowl of chili, shampoo. capable of being touched, seen, or felt
bootstrapping
finding low-cost (or no-cost) way to do something
customer development process
focus specifically on meeting the needs of customer, hopefully leading to a new product/service. finding and keeping new customers
invention plan
focuses on the market and operationalization of a new invention but typically lacks marketing strategy
pitch
formal presentation of your plan
value proposition
relation of product/company capabilities to customer pains and gains. has a short and long version
franchisee
can use branding. pays fees for rights
customer profile
detailed description of an archetype/hypothesis potential customers for the product/service. goal is an unbiased sense of how customers think about the issue your product/service helps resolve or improve
value proposition
related to product/ service competitive advantage. focuses on the benefits (quality, style, delivery). description in product/service section of business plan
long term value
revenue that a customer generates over time. go after the customer who will bring the most revenue and profit to your firm
industry heuristics
rules of thumb used to estimate firm value in relation to some easily observable characteristic of a business
pitch deck
slideshow w 1 intro 2 company purpose slide 3 problem slide 4 solution slide 5 product slide 6 why now slide 7 market size slide 8 business model slides 9 competition slides 10 financial slide 11 ask and deal slide 12 closing slide
income capitalization
divides projected net income less depreciation, interest, owner draws by return you could expect elsewhere
secondary research
has already been gathered for another reason but can be just as useful. CHALLENGE- finding good, unbiased data
effectual reasoning
imagining what can be accomplished with the resources at hand
idea generation
market resolutions and competition
data room
online repository for document that back-ups and details specifics of the business plan
key resource acquisition
only way a sole proprietorship is purchased
traction
part of support section of elevator pitch. characteristic of the business that shows it's making progress r that reflect the business' growth and development
strategic partnerships
partnerships/alliances that formal/informal relationships with customers, vendors, or mentors to ensure success of entrepreneur venture
churn
percentage of customers a firm loses after their first purchase from the firm
product development process
perfects the product of the innovation within the product
affordable loss
practice of bringing your product/service to the market with minimum expenditure of capital, effort, and time
market funnel
shows how many prospective customers it takes to find one that will make a purchase
mission statement
slightly longer than a tagline and adds the firms competitive advantage
benefit matching
the closer customers' needs/gains/pains align with features of your product/service the happier they'll be
proof of concept website
website with information on the product/service designed to solicit information on customer interest
customer job
what potential customer is trying to do (preform task, solve problems)
influencer impact
word of mouth or social media exposure that can lead to sales from customers you did not know to target
net realizable value
amount an asset would sell for, less the cost of selling it
paths of business ownership
1. entrepreneur can start a completely new business. 2. purchase franchise rights to an existing business. 3. purchase a fully operating business. 4. can work in small business and eventually gain ownership. 5. inherit a business from a family member
UFOC
Uniform Franchise Offering Circular. document created by franchisor that explains firms operation, requirement, and cost of franchise
minimizing churn
keeping existing customers is more valuable than finding new ones
turnkey
perhaps greatest advantage that it comes as complete business system
due diligence
process of investing to determine the full and complete implications of buying a business. nothing is taken for granted. 2 goals- look for any wrongdoing (fraud, misrepresentation, or missing information) AND look for inefficiencies, waste, opportunities, or mismanagements
new entrant business
product/service established elsewhere but it's the first of its kind in a particular market. disadvantage- proving the product/service works is harder in a new market
paid media
promotion where firm hires another for the placement and distribution of the material. you pay for ad placement
executive summary
typically a 1 page summary written formally (for suitable investors). covers 5 main topics: problem, product, market, competitive advantage, business/team, and financial summary
net income to equity
determined by dividing income by owner equity
advertorials
"native advertising" form of paid advertisement. generally published in mass media
customer retention
CR focus on efforts to promote satisfaction with and interest. general approach to keeping customers
press relations
activities used to establish and promote favorable opinion by the media
viral marketing
relies on customers telling friends about the business. hearing about a product from a friend provides credibility
domains
specific name of site, followed by .net or .com. many companies use their name as their domain name
sales outcome reports
sum up issues around actual sales
sales process reports
summarize data based on position of customer in sales process
earned media
DIY and paid efforts to get word out and hope it's repeated. public relations and press relations
customer vector reports
classify information by customer groups based on purchase and dates of purchase
owned media
directly and wholly held by a firm. your website, newsletters, emails etc
media content
document with firms marketing efforts (goals, target audience, etc) across different types of marketing efforts
personal selling
formula- 1. prospect and evaluate 2. prepare by finding out what you can about the clients 3. present a logical and compelling argument for purchase 4. close the sale using one of a number of techniques 5. follow up to avoid customer cognitive dissonance
lead generation
gain customers to obtain contact information to get messages about the business
trade/professional association
group of people in the same industry band together to share information of industry to public and government
hit rate
how many prospects/leads a sales person needs to approach in order to make one sale
succinct message
key point in a few memorable words
brand
name firms puts on its product and so much more
media kit
often built around a press release for potential current interest to a media outlet
virtuous cycle
one good turn invites another one for someone else
user review sites
online sites where a firms customer can post their opinion, rating, and experience about the firm
affiliate marketing
partnership between firm where firm mentions product/service of another firm
influencers
produce content on social media. open to considering new things
shared media
when the product/service made by customer and posted through social media sites. word of mouth
press release
written announcement intended to draw media attention to a specific event
