SBM exam 2

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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