DECA Non-Common-Sense

Business Incubator

Provides workspace, coaching, and support services to entrepreneurs and early-stage businesses

Partnership

Two or more individuals who operate a continuing business for profit. A partnership is legally regarded as a group of individuals rather than as a single entity, and each of the partners file their share of the profits on their individual tax returns

Angel Investors

Individuals who back emerging entrepreneurial ventures, usually as a bridge to get from the self-funded stage to the level of business that would both need and attract venture capital

Start-Up

A newly established business

Accelerator

An organization or project that promotes or supports the fast growth of small businesses

Business Valuation

An estimate of the worth of a business entity and its assets

Entrepreneurship

The activity of starting businesses for profit

Corporation

A body that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members. The primary advantage of a corporation is that it shields its investors from personal liability for any losses a corporation may experience.

Venture Capital

A type of financing where the startup offers up a partial ownership stake in the company for money. In some cases, the company may also relinquish control to executives the VC chooses, though often only for a limited period of time.

Acquisition

When one company takes ownership of another, usually smaller, company

Pitch

To propose a business idea, usually with the goal of obtaining a contract or funding

Proof of Concept

An understanding about whether or not the an idea, product, or service is feasible and has potential

Proof of concept

Crowdfunding

The practice of raising money online through many small donations from regular people, rather than one larger amount from an investor

Trademark

A symbol, words, or a phrase officially registered for a company

Unicorn

A startup company, usually privately-held, which reaches a valuation of over $1 billion

Merger

When two companies join together to become one company. Usually, a merger happens when both companies dissolve and form a brand new entity, although they could also just rename one company to include both

Fledgling

Refers to a company or startup that is young, lacking experience, and still struggling with their business ideas, business model, market, and products or services

Minimum Viable Product (MVP)

A version of a product or service with just enough features and value to be released to the public

Value Proposition

A statement or promise of value of a given product or service, including features and benefits

Launch

The event where a product or service is released to the public market

Sole Proprietorship

A business owned and operated by one person

Outsourcing

Obtaining goods or resources from a source outside of the company

Limited Partnership

A business arrangement in which the day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment

Limited Liability Company (LLC)

A legal entity that is not taxable itself and distributes the profits to its owners, but shields personal assets from business debt like a corporation

Business Model

A description of how an existing business or business idea plans to achieve success, make a profit, and create value

Capital

Wealth or assets available to invest in a project or business

Strategic Alliance

A relationship between two companies that helps both companies reach their goals

Patent

Authorization or license granted to an inventor that prevents others from making, using, or selling their invention

Venture

A risky project or business idea

Copyright

The exclusive legal right to use and reproduce literary, artistic, or musical material

Unique Selling Point (USP)

A thing that stands out about a product or service over that of another company

Investor

A person that puts money into a project or small business, with the hope of eventually receiving profit

List the major components of a business plan.

Executive summary, company description, market analysis, organization and management, products or services, marketing and sales strategy, operations plan, and financial projections.

What is a performance metric (key performance indicator)?

A quantifiable measure used to evaluate how effectively a business is achieving its objectives.

Name four categories of metrics used to measure organizational success.

Financial (profit, revenue), customer (satisfaction, retention), operational (productivity, cycle time), and employee (turnover, engagement).

What is a milestone in a business plan?

A significant, measurable point of progress with a target date, used to check whether the business is on schedule.

Define risk management.

The process of identifying, assessing, and controlling threats to a business's capital, earnings, and operations.

Name the four common methods of managing risk.

Risk avoidance, risk reduction, risk transfer, and risk acceptance (retention).

Define profitability.

A business's ability to earn revenue that exceeds its expenses.

What is the formula for net profit margin?

Net income ÷ net sales (revenue) × 100.

What is a data breach, and why is it harmful?

Unauthorized access to confidential information. It can cause financial loss, legal liability, and loss of customer trust.

What does a business analyst do?

Gathers and examines data, identifies problems and opportunities, and recommends improvements to processes, systems, and strategy.

Name common techniques used in business analysis.

SWOT analysis, cost-benefit analysis, gap analysis, and stakeholder analysis.

What is a business process?

A series of related, repeatable activities that produce a specific outcome for customers or the business, such as order fulfillment.

What is business process design?

Planning how work will flow, including the steps, roles, and resources, so that a good or service is produced efficiently.

How does process improvement differ from process reengineering?

Improvement makes incremental changes to an existing process, while reengineering radically redesigns the process from the ground up.

Define supply chain.

The network of organizations, people, activities, information, and resources involved in moving a product from raw materials to the final consumer.

Define supply chain management.

The coordination and oversight of all activities from sourcing through delivery in order to optimize cost, speed, and quality.

Name the key components of supply chain management.

Planning, sourcing, making (production), delivering (logistics), and returns.

What is logistics?

The part of supply chain management that plans, implements, and controls the efficient flow and storage of goods, services, and information.

Define innovation.

The introduction of new ideas, methods, products, or services that create value.

What is a learning organization?

An organization that continuously acquires and shares knowledge and adapts its behavior accordingly.

Define management.

The process of planning, organizing, staffing, directing, and controlling resources to achieve organizational goals.

Define change management.

A structured approach for moving individuals, teams, and organizations from a current state to a desired future state.

What are the three stages of Lewin's change model?

Unfreeze, change, and refreeze.

Define quality management.

The ongoing process of ensuring that products and services consistently meet or exceed customer expectations and established standards.

How does quality control differ from quality assurance?

Quality control inspects and tests output to detect defects, while quality assurance prevents defects by improving processes.

What is Total Quality Management (TQM)?

A management approach in which all employees continuously work to improve quality, with a focus on customer satisfaction.

What is Six Sigma?

A data-driven methodology for reducing defects and variation in processes.

What is a risk matrix?

A grid that plots the likelihood of a risk against its severity in order to prioritize risks.

How does pure risk differ from speculative risk?

Pure risk offers only the chance of loss (fire, theft), while speculative risk offers a chance of either gain or loss (launching a new product).

What is horizontal analysis?

Comparing line items across multiple periods to identify trends and changes, in dollars or percentages.

What is vertical analysis?

Expressing each item as a percentage of a base figure within one period, such as net sales on the income statement or total assets on the balance sheet.

What is ratio analysis?

Evaluating relationships between financial statement items to assess performance and financial condition.

What does a current ratio below 1.0 indicate?

Current liabilities exceed current assets, so the business may have difficulty paying short-term obligations.

What are the financial needs of a startup?

Seed capital for market research, equipment, licenses, initial inventory, and operating expenses, usually from owner funds, family, friends, angel investors, or loans.

What are the financial needs of a growing business?

Funds for expansion, inventory, hiring, marketing, and working capital, often from bank loans, venture capital, or retained earnings.

What are the financial needs of a mature business?

Funds for maintaining operations, developing new products, and making acquisitions, usually from internal profits, bonds, or stock.

What is working capital?

Current assets minus current liabilities. It is the money available for day-to-day operations.

Define debt capital.

Borrowed funds, such as loans and bonds, that must be repaid with interest. The lender does not gain ownership.

Define equity capital.

Funds raised from owners or investors in exchange for an ownership interest. It does not have to be repaid.

Define managerial cost accounting.

Accounting that gathers and analyzes cost information for internal decision making, including planning, controlling, and evaluating performance.

What is the break-even point formula in units?

Fixed costs ÷ (selling price per unit − variable cost per unit).

Define corporate governance.

The system of rules, practices, and processes by which a company is directed and controlled.

Who are a company's stakeholders?

Individuals and groups affected by the company, including shareholders, employees, customers, suppliers, and the community.

List the components of a well-governed company.

Board of directors, reporting on issues, transparency in policy, and internal and external audit functions.

What is the role of the board of directors?

Elected by shareholders to oversee management, set strategic direction, and protect shareholders' interests.

How do internal and external audits differ?

An internal audit is performed by company staff to evaluate controls and processes. An external audit is performed by an independent accountant to verify the accuracy of financial statements.

Define enterprise risk management (ERM).

A company-wide, coordinated approach to identifying, assessing, and managing all risks that could affect the organization's objectives.

Name categories of risk addressed by ERM.

Strategic, operational, financial, compliance (legal), and reputational risks.

Define risk appetite.

The amount and type of risk an organization is willing to accept in pursuit of its objectives.

Name four sources of business risk with an example of each.

Natural (fire, flood), human (theft, error), economic (recession, inflation), and technological (cyberattack, equipment failure).

What methods can a business use to identify risks?

Brainstorming, checklists, reviewing past losses, SWOT analysis, inspections, and feedback from employees and customers.

Give an example of an economic risk.

A recession that reduces consumer spending, or rising interest rates that increase borrowing costs.

What is the formula for risk exposure?

Probability of the event × potential loss.

Define channel management.

The process of selecting, working with, motivating, and evaluating channel members so that products move efficiently to customers.

What is included in the scope of channel management?

Selecting channel members, setting policies, motivating members, resolving conflicts, and evaluating performance.

What is channel conflict?

Disagreement among channel members over goals, roles, or rewards, such as a manufacturer selling directly in competition with its retailers.

Define channel of distribution.

The path a product takes from the producer to the final consumer or business user.

Name common channel members (intermediaries).

Wholesalers, retailers, agents and brokers, and distributors.

What is intensive distribution?

Placing a product in as many outlets as possible. It is typical for convenience goods such as snacks and soft drinks.

What is selective distribution?

Using a limited number of outlets in an area. It is typical for shopping goods such as appliances and clothing.

What is exclusive distribution?

Granting one outlet the sole right to sell a product in an area. It is typical for luxury or specialty goods such as high-end automobiles.

How do primary data and secondary data differ?

Primary data is collected firsthand for the current purpose. Secondary data was previously collected by others, such as government agencies or trade publications.

What is a marketing information system?

The people, procedures, and tools used to gather, sort, analyze, store, and distribute information for marketing decisions.

Define marketing research.

The process of gathering, analyzing, and interpreting information about markets, customers, and competitors to support marketing decisions.

What are the steps in the marketing research process?

Define the problem, plan the research, collect data, analyze data, and report the findings.

Define marketing strategy.

A plan for how a business will reach its target market and achieve its goals using the marketing mix.

What are the four Ps of the marketing mix?

Product, price, place (distribution), and promotion.

Define market.

A group of people or organizations that has a need or want, along with the ability and willingness to buy.