Chapter 5 Entrepreneurship and Business Plan

Vocabulary flashcards covering key terms from the lecture notes on Entrepreneurship and the Business Plan.

Entrepreneurship

The process of starting, growing, and running a new company to make money or add value, usually by acting on an idea to introduce a new good or service, with the aim of large profits and market share through innovation.

Entrepreneur

A person who invests money to launch and expand a business and uses creative thinking to seize market opportunities.

Innovation

The practice of developing new business concepts with the aim of making money, giving back to the community, and achieving organizational objectives.

Organization

The structure within a company that encourages innovation and requires characteristics that allow diverse viewpoints to emerge and contribute.

Vision

An entrepreneurial view of the enterprise that includes its goals, appearance, reason for existence, and the values and culture surrounding it.

Risk taking

The ability and willingness of entrepreneurs to make choices and take actions that involve uncertainty, potential loss, and possible failure.

Small business entrepreneurship

A privately held entity with fewer employees and lower income than larger firms; owners have complete control but face limitations in growth and capital needs.

Start-up entrepreneurship

Entrepreneurship in the early stage where one or more founders launch a startup to deliver a product or service believed to have a market, often starting with preliminary funding and market research.

Social entrepreneurship

The practice of using entrepreneurial ideas to build a business that directly serves a social cause or drives social change, often creating jobs and helping the economically disadvantaged.

Social entrepreneur

An individual who uses entrepreneurial approaches to address social issues and drive social change.

NGOs

Non-Governmental Organizations; independent groups that operate outside government and often work on social, developmental, or humanitarian initiatives.

Business Plan

A written document that summarizes and outlines a company's future, including strategy, objectives, operations, market analysis, and risk management.

Cover Letter

A short letter to potential funders that highlights the most attractive points of a project and is addressed by name to the investor.

Executive Summary

A two- to three-page management summary of the proposed venture, including a brief description, major goals, and objectives.

Company Background

A section describing past operations, potential legal considerations, risks and opportunities, and the firm’s financial condition with supporting records.

Management Team

The organizational group responsible for the venture, including an organization chart, job descriptions, and résumés of current and proposed executives.

Financial Plan

Five-year projections of income, expenses, and funding sources, with reasonable assumptions and scenarios (best-case, expected, worst-case).

Capital Required

The amount of capital needed to commence or continue operations and how those funds will be used, with totals aligned to the cash flow statement.

Marketing Plan

A plan addressing industry size and trends, target market, product advantages, pricing, forecasted sales, and marketing programs; costs should align with financial projections.

Location Analysis

An analysis of a proposed business site focusing on demographics, traffic patterns, and counts, especially important in retail.

Manufacturing Plan

A plan describing minimum plant size, machinery, production capacity, inventory control, quality control, personnel needs, and product cost estimates from primary research.

Appendix

Supplementary materials in a business plan, including marketing research, references, and other information to support the concept.