Studies in Entrepreneurship Test 2
workout
a form of business termination in which the firm's legal or financial obligations are not fully met at closing
undifferentiated strategy
a marketing strategy that uses no segmentation; assumes that all consumers have virtually identical needs that can be reached by the same marketing mix.
direct mail
a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are mailed directly to customers from which they can mail, call, or e-mail an order. direct faxing and direct e-mail are more modern forms of direct mail
overdraft
a negative balance in a depositor's bank account
born international
a new firm that opens a website immediately, thus being exposed to customers from around the world
sheltered workshop
a nonprofit organization or institution that provides business services by using handicapped or rehabilitated workers
liquidation
a popular name for a Chapter 7 bankruptcy in which a bankrupt firm's assets are sold by the bankruptcy trustee and the proceeds are used to pay the firms debts
discounts for prompt payments
a reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner
cash receipts budget
a schedule of the amounts and timings of the receipt of cash into a business
payables
amounts owed to vendors for merchandise or services purchased on credit
receivables
amounts that are owed to a business for merchandise that was sold on credit
termination
an endgame strategy in which the owner closes down a business
clearinghouse
an entity that processes checks and electronic fund transfers for banks and other financial organizations
liquidity enhancement
an estate planning strategy which focuses on generating cash to cover likely estate taxes
estate freeze
an estate planning strategy which focuses on transferring assets to heirs when the asset costs are low
short-term debt
any debt that must be paid in less than one year from the date of the financial statement on which it is reported
bearer
any person or business entity who possesses a security
cash equivalents
assets that may be quickly converted to cash
factoring receivables
borrowing money secured by a firm's accounts receivable
walkaways
business terminations in which the entrepreneur ends the business with its obligations met
deposits and progress payments
cash payments received before the product is completed or delivered
indirect competition
companies that provide alternatives that are dissimilar to your product/service that consumers might choose to meet a similar needs; for example, indirect competition for Coca-Cola includes any other companies providing items to quench thirst
comprehensive budget
comprehensive budgets are often referred to as master budgets
telemarketing
contact via telephone for the express purpose of selling a product or service. telemarketing can be inbound (customer calls company) or outbound (company calls customer)
ethnographic research
data gathered by simple observation-- seeing what customers do, rather than asking them
noncash incentives
rewards that do not requirements of cash, such as stock options, compensating time off, or added vacation days
market segmentation
the process of dividing the market into groups that have somewhat homogeneous needs for a product or service
business life cycle
the sequence or pattern of developemental stages any business goes through during its life span
liability of newness
the set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business
employee stock ownership plan
a formalized legal method to transfer some or all of the ownership of a business to its employees
concentrated strategy
a marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group
wholesaler
a middleman business which buys (typically in large quantities) and sells (typically in smaller quantities) to businesses rather than customers
agent
a middleman business which represents a manufacturer's product or service to other business-to-business middleman firms
retailer
a middleman business which sells to consumers or end-users of a product (typically in single or small quantities)
charge bank
a reduction in the bank account of a merchant by a credit card company
cash disbursements budget
a schedule of the amounts and timings of payments of cash out of a business
marketing plan
a systematic written plan of all phases of marketing for a business, including information on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition
consolidation
a transfer method in which a small business is bought by a larger firm for the purpose of quickly growing the larger firm
tax management
an estate planning strategy which focuses on minimizing estate tax payments
contract manufacturing
an existing firm with the correct manufacturing capabilities makes your products for you
bankruptcy
an extreme form of business termination which uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets
mail order
sales made from ads in newspapers or magazines, with purchases made online or by phone as well as by mail.
growth trap
a financial crisis that is caused by a business growing faster than it can be financed
differentiated strategy
a marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs
timing purchase
a method of controlling the timing of cash outflows that is invisible to suppliers and vendors
microinventory
a set of goods or service that consists of only one or a few items
non-sufficient funds
a situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal or greater than the amount of the check
manufacturers' suggested retail price (MSRP)
a target price set by a manufacturer for a product or service intended to provide profit for each intermediary in the distribution channel
bot
a web-based program that uses artificial intelligence techniques to automate tasks such as searches
money
an accepted medium of exchange
reconciling
an accounting process that identifies the causes of all differences between book and bank balances
e-tailer
an electronic retailer; a store that exists only on the internet
transfer
an endgame strategy in which ownership is moved from one person or group to another
supplemental profits
returns above costs intended as a secondary income for entrepreneurs (where self-employment is secondary to their main job)
success profits
returns at levels higher than the entrepreneur could make working for others
operating cycle
same as cash-to-cash cycle
barter
the practice of trading goods and services without the use of money
gaming the payment process
using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided
documentary draft
a draft which can be exercised only when presented with specified shipping documents
noncore projects
revenue-producing tasks and activities related to, but not part of, the primary strategy of a business
survey
a data-collection method using a questionnaire-- in person, on phone, on paper, or on the internet
letter of credit
a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms
dichotomous questions
Questions that only have two possibly choices
cash budget
a cash budget identifies when, how, and why cash is expected to come into the business, and when, how, and why it is expected to leave
fulfillment center
a company that will warehouse your products and fill your customers' orders for you
float
delays in movement of money amount depositors and banks
indirect exporting
exporting using intermediaries such as agents, export management companies, or export trading companies
direct exporting
exporting using no intermediaries
freight forwarders
firms specializing in arranging international shipments -- packaging, transportation, and paperwork
just-in-time inventory
having just enough product on your shelves to meet the immediate purchases, this usually requires frequent shipment from your supplier
secondary research
information already collect for some other purpose than the current problem or questions
direct sales
methods of going directly to your customer in order to sell your product. vending machines, door-to-door salespeople, farmers' markets, party sales, and most industrial sales are methods of direct selling
demand deposits
money held in checking and savings accounts
cash
money that is immediately available to be spent
commercial paper
notes issues by credit-worthy corporations
substitution profits
returns intended to equal and replace the salary or wages the entrepreneur could draw working for someone else
traffic generators
other businesses that bring customers to the area
direct competition
other companies that make a similar product or provide a similar product or provide a similar service; for example, competition for Coca-Cola includes all other soft drink providers
channels
people and firms who connect producers of goods and services with customers
serial entrepreneurs
people who open multiple businesses throughout their career
trade discounts
percentage discounts from gross invoice amounts provided to encourage prompt payments
direct response advertising
placing an advertisement in a magazine or newspaper, on television or radio, or in any other media. The ad contains an order blank with a phone number and e-mail or regular main address with the intent of having the customer place an immediate order
slack resources
profits that are available to be used to satisfy the preferences of the owner in how the business is run
open-ended questions
questions that allow respondents to express themselves as they choose
categorical questions
questions that are answered by selecting the proper category; for example, "What is your ethnicity? White, African American, Hispanic, Asian, Other."
scalar questions
questions that are answered of some type of scale; for example, "on a scale of 1 to 5, how do you like this book?"
harvest
recover value through a sale of a firm or its asssets
direct marketing
selling your goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results
marketable securities
stocks and bonds that are traded on an open market
marketing research
systematic collection and interpretation of data to support future marketing decisions
profit
the amount that revenues exceed expenses
currency
the bills and coins printed by governments to represent money
differential advantage
the characteristic that separates one company from another in product, price, promotion, and/or distribution
manufacturer
the entity which produces a product or service to be sold
reorganization
the popular name for a Chapter 13 bankruptcy in which a bankrupt firm continues to operate while paying off debts identified by the bankruptcy trustee
cosignment
the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold
company book balance
the sum of cash inflows and cash outflows recorded in the firms accounting records
bank ledger balance
the sum of deposits and withdrawals recorded in a bank's accounting records
bank availability balance
the sum of money that has actually been received and paid out of a depositor's account
cash-to-cash cycle
the time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale
guerrilla marketing
the use of creative and relatively inexpensive ways to reach your customer. examples include door-knob hangers, flyers under windshield wipers, t-shirts- balloons, and messages written on sidewalks
multichannel marketing
the use of several different channels to reach your customers, for example, a website, direct mail, and traditional retailing
initial public offering (IPO)
transfer method describing the first-time public sale of a stock listed on a public stock exchange
focus group
a form of data gathering using a small group led by a moderator
