Glossary Entrepreneur Test

Operating Strategy

Operating Strategy

One of the five sections of a venture plan that indicates how the entrepreneur will manage the resources of the venture in its day-to-day operation.

Product Sampling

A method of conducting marketing research that involves providing a small group of consumers with a product or service to use and evaluate.

Liability

A debt; a sum of money that the entrepreneur owes; the financial obligation of a business.

Venture plan

A written summary of what a venture can accomplish and how it intends to do so

Asset

Anything the entrepreneur or business owns that has cash value (e.g., accounts receivable, cash, and inventory).

Survey

A questionnaire; A set of questions designed to obtain information.

Consumable Resources

Material resources, also known as expense goods, that are used up in the process of doing business, such as paper, oil, gas, or telephone service

Profit Formula

A way to project profits from known information: profit = (unit price x quantity) - costs.

Material Resources

All the materials that are needed to operate the venture, both raw materials and finished products.

Capitalize

To supply a venture with funds

Liquidation

The sale of assets in order to raise funds.

Financial Resources

The money needed to start and operate a venture, including money to buy equipment and materials, pay staff, and cover other expenses.

Observation

A method of collecting primary data by directly watching people or processes

Variable Cost

A cost such as labor, that fluctuate every month depending on the demand for, and output of, the product or service

Census

A survey conducted by contacting everyone in the total population (e.g., of a country).

Gap Analysis

An analysis that can be included in a venture plan to point out the difference between what is already in place and what ideally should be in place once the venture is underway.

Financial Strategy

The final section of a venture plan that predicts how the venture will make use of its financial resources.

Break Even Point

The point where total monthly revenues are equal to total monthly costs.

Human resources

The people needed to operate a venture.

Fixed Cost

A cost, such as rent, that is the same every month regardless of how much the venture sells or produces.

Market Analysis

One of the five sections of a venture plan, that helps entrepreneurs identify potential customers, analyze the competition, set prices, and plan ways to advertise the venture.

Fixed Resources

Material resources, also known as capital goods, that last a long time, such as buildings, trucks, machinery, and office equipment.

Resource Analysis

One of the five sections of a venture, in which the entrepreneur considers the material, human, and financial resources that will be needed for the venture.

Total monthly costs

All the money paid out by the business in a month, including labor and production costs as well as fixed overhead costs

Fixed Overhead

Costs such as rent, telephone lines, computers, and office staff.

Promotion

The process entrepreneurs use to deliver their message to consumers, by activities such as advertising, personal spelling, publicity, and sponsorship.

Marketing Strategy

A plan developed for the entire marketing process, from researching to advertising promotions, packaging, distribution, sales, and service.

Target Market

Those individuals or organizations that are likely to want to use what you can provide.

Total monthly revenues

All the money that comes into the business in a month from sales or other sources.

Executive Summary

A one or two page summary of the most important points in a venture plan, intended to introduce the venture and to capture the attention of the reader.

Life Cycle

The various stages most products and services pass through overtime.

Market Segment

A group of consumers who shares common characteristics.

Marketing Elements

Elements of a marketing strategy, also known as Four Ps of Marketing or the marketing mix: product (or service), place, price, and promotion.

Project Plan

A plan to help an employee organize a successful project