DECA Principles of Entrepreneurship (PEN)

Types of Business Ownership

Various legal structures entrepreneurs can choose for their businesses, including Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC)

Intellectual Property (IP)

Creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images used in commerce, protected by laws granting creators exclusive rights

Types of Business Ownership

Various legal structures entrepreneurs can choose for their businesses, including Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC)

Intellectual Property (IP)

Creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images used in commerce, protected by laws granting creators exclusive rights

Contract Law

The body of law governing legally binding agreements between parties, ensuring that promises made in contracts are enforceable

Tort

A civil wrong causing harm or loss, leading to legal liability for the person committing the tortious act

Eminent Domain

The power of the government to take private property for public use, with compensation to the owner

Absolute Privilege

A complete defense against defamation claims, applicable in specific situations like legislative or judicial proceedings

Acquisition

The process of taking ownership of another business, often used in the context of mergers

Advertising

The act of attracting public attention to a product or business through paid announcements in various media

Entrepreneurial Discovery

The process of systematically scanning for changes to discover opportunities to produce new goods and services

Industry Risk

Factors that can positively or negatively impact a specific industry and, by association, the companies in it

Horizontal Analysis

A financial analysis method that compares the same items on a company’s financial statement for two or more periods

Standard Operating Procedures (SOPs)

Established methods and protocols for performing tasks to ensure consistency and efficiency

Economic Conditions

External factors related to the economy that businesses monitor to adapt and stay competitive

Income Statement

A financial document that shows a company’s revenues and expenses over a specific period, indicating profit or loss

Current Assets

Assets that are expected to be converted into cash or used up within one year, such as checking accounts

Short-term Loans

Credit that business owners obtain to purchase seasonal goods for resale

Debt Financing

Raising funds for business activities by borrowing, which must be repaid over time with interest

Marginal Revenue

The additional income generated from selling one more unit of a good or service

Jury of Executive Opinion

A sales forecasting method where executives use their judgment to predict future sales

Orientation

The process of introducing new employees to a company, its policies, and their specific job roles

Employment History

A record of an individual’s past employment experiences, typically included in job applications

Board of Directors

A group of individuals elected to represent shareholders and oversee major decisions in a corporation

Corrective Action

Steps taken to fix a problem or non-compliance issue to prevent recurrence

Sales Forecasting

The process of estimating future sales, which helps in planning and decision-making

Market Segmentation

The practice of dividing a market into distinct groups of buyers with different needs or characteristics

Niche Marketing

Targeting a specific, well-defined segment of the market

Data Mining

The process of analyzing large datasets to identify patterns and relationships

Cultural Sensitivity

Awareness and respect for cultural differences, important in international marketing

Economies of Scale

The cost advantage that arises with increased output of a product

Facilitator

An individual who guides discussions and helps a group achieve its objectives

Feasibility Study

An analysis of the viability of a proposed business idea, including aspects like funding

Operational Budget

A detailed projection of all expected income and expenses during a specific period

Proximity

Nearness in space, time, or relationship

in business, it often refers to location advantages

Business Process Thinking

An approach that focuses on improving organizational processes for better efficiency and effectiveness

Professional Development

Activities that enhance an individual’s skills and knowledge for career advancement

Networking

Building and nurturing professional relationships to aid in career development

Strategic Management

The process of defining strategy and making decisions on allocating resources to pursue this strategy

Information Management

The collection, storage, dissemination, and use of information within an organization

Data Security

Protecting data from unauthorized access and data corruption throughout its lifecycle

Risk Management

The identification, assessment, and prioritization of risks followed by coordinated efforts to minimize their impact

Crisis Management Plan

A set of procedures to handle unexpected events that can cause harm to an organization

Customer Relationship Management (CRM)

Strategies and technologies used by companies to manage and analyze customer interactions and data

Active Listening

Fully concentrating on what is being said, understanding the message, responding thoughtfully, and remembering the information

Nonverbal Communication

The transmission of messages without the use of words, including body language, facial expressions, gestures, posture, and eye contact

Supply and Demand

Economic model of price determination in a market, stating that the price of a good is determined by the relationship between its supply and demand

Return on Investment (ROI)

A measure used to evaluate the efficiency of an investment, calculated by dividing net profit by the cost of the investment

Quality Control

Processes and procedures implemented to ensure that a product or service meets defined quality criteria and customer expectations

Employee Motivation

The level of energy, commitment, and creativity that a company’s workers bring to their jobs

Market Research

The process of gathering, analyzing, and interpreting information about a market, including information about potential customers and competitors

Brand Identity

The visible elements of a brand, such as color, design, and logo, that identify and distinguish the brand in consumers’ minds

Sales Promotion

Short-term incentives to encourage the purchase or sale of a product or service

Distribution Channel

The path through which products or services get from the manufacturer to the consumer

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity

Balance Sheet

A financial statement that summarizes a company’s assets, liabilities, and shareholders’ equity at a specific point in time

Cash Flow

The total amount of money being transferred into and out of a business, especially as affecting liquidity

Break-even Analysis

A calculation to determine the sales volume at which total revenues equal total costs, resulting in neither profit nor loss

SWOT Analysis

A strategic planning technique used to identify strengths, weaknesses, opportunities, and threats related to business competition or project planning

Target Market

A particular group of consumers identified as the recipients of a specific marketing message or campaign

Product Life Cycle

The progression of a product through four stages: introduction, growth, maturity, and decline

Pricing Strategy

The method companies use to price their products or services, considering factors like market demand, competition, and production costs

Promotional Mix

The combination of promotional tools an organization uses, including advertising, sales promotion, public relations, personal selling, and direct marketing

Market Share

The portion of a market controlled by a particular company or product

Customer Satisfaction

A measure of how products or services provided by a company meet or surpass customer expectations

Brand Loyalty

The tendency of consumers to continue buying the same brand’s products or services over time

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market

Direct Marketing

A form of advertising where organizations communicate directly with customers through various media, including mail, email, phone, and online advertisements

Public Relations

The practice of managing and disseminating information from an organization to the public to affect their perception

Personal Selling

A sales method involving direct interaction between a salesperson and a customer to persuade them to purchase a product or service

Cold Calling

A sales technique where a salesperson contacts individuals who have not previously expressed interest in the offered product or service

Sales Quota

A specific sales goal assigned to a salesperson or sales team to achieve within a set period

Sales Commission

A form of compensation where employees earn a percentage of the revenue they generate from sales

Consultative Selling

A sales approach that focuses on understanding the customer’s needs and offering solutions rather than simply pushing a product

Cross-Selling

The practice of suggesting related or complementary products to customers to increase sales

Upselling

A sales strategy where the seller encourages the customer to purchase a higher-end product or add-ons to increase the transaction value

Customer Retention

Strategies businesses use to keep customers engaged and returning for future purchases

Customer Experience

The overall impression a customer has of a business throughout their interactions with it, from initial contact to post-sale service

Word-of-Mouth Marketing

A promotional strategy that relies on customers sharing their positive experiences with others, increasing brand trust and reputation

Publicity

Free media coverage gained through news outlets, press releases, or social media, often as a result of an event, product launch, or controversy

Corporate Social Responsibility (CSR)

A company’s efforts to contribute positively to society through ethical business practices, sustainability initiatives, and philanthropy

Crisis Communication

The strategies and messages a business uses to manage public perception and response during a crisis or emergency

Supply Chain Management

The coordination and oversight of sourcing, production, and distribution to ensure efficient and cost-effective delivery of goods and services

Inventory Turnover

A financial metric that measures how quickly a business sells and replaces its inventory within a given period

Just-in-Time (JIT) Inventory

An inventory management strategy where materials and products are received only as they are needed, reducing storage costs and waste

Vendor Relationship Management

The process of managing interactions with suppliers to ensure reliability, cost-effectiveness, and long-term partnerships

Lean Production

A manufacturing methodology that focuses on minimizing waste while maximizing productivity and quality

Outsourcing

The practice of hiring external companies or individuals to perform tasks, services, or manufacturing that were traditionally handled in-house

Overhead Costs

Indirect business expenses that are not tied to direct production or service delivery, such as rent, utilities, and administrative salaries

Break-even Point

The sales level at which total revenue equals total costs, resulting in neither profit nor loss

Fixed Costs

Business expenses that remain constant regardless of production levels, such as rent and salaries

Variable Costs

Costs that change in proportion to production volume, such as raw materials and shipping expenses

Financial Planning

The process of setting financial goals, creating budgets, and managing resources to ensure a business’s profitability and sustainability

Debt-to-Equity Ratio

A financial metric that compares a company’s total liabilities to its shareholder equity, indicating financial leverage

Cash Reserve

A portion of a company’s financial assets kept in easily accessible accounts to cover unexpected expenses or downturns

Equity Financing

Raising capital by selling ownership shares in a business rather than borrowing funds

Angel Investor

An individual who provides financial backing to startups or small businesses, usually in exchange for equity or convertible debt

Venture Capital

A form of private equity investment where firms or individuals provide funding to high-growth startups in exchange for equity ownership

Gross Profit Margin

A financial ratio that shows the percentage of revenue remaining after deducting the cost of goods sold (COGS)

Net Profit Margin

A profitability metric that indicates how much of a company’s revenue remains as profit after all expenses have been deducted

Return on Assets (ROA)

A financial ratio that measures a company’s profitability in relation to its total assets