What are the 2 categories of start-up costs?

start-up expenses examples

buying the materials
equipment
rent
marketing costs

place

focus on distribution and how customers get access to products they purchase and where they purchase them

4 methods of primary research

Interviews- interview customers/stakeholders to gain insight
surveys- collect data from questionaires
focus groups- small groups converse to talk about opinions and reactions to a product or service
observations- watch customer behavior to gain insight with out interaction

SWOT analysis

Strengths - key advantages relative to competition/target markets
Weaknesses- key disadvantages relative to competition, target markets
Opportunities- marketplace conditions addressed by the proposed business, service or product
threats- possible impediments to achieving business, service or product objectives

Why do you use a SWOT analysis?

it Shows the importance of evaluating a businesses key functions to recognize any room for improvement and gain insight into both internal and external factors.

Metrics-financial or non-financial

financial- revenue, profit margins, ROI, cash flow, net income
NON financial- operational efficiency, customer satisfaction, employee engagement, employee satisfaction, brand value

What is CSR?

Corporate social responsibilty is the idea that corporations have a moral obligation to cotribute to societal environmental goals as apart of their business model

Why does CSR matter?

its important because it improves a company's reputation, attracts customers/investors, boosts employee satisfaction.

Who are stakeholders in a CSR?

customers, employees, owners, investors, local and global community, suppliers, environment, shareholders

What is a KPI?

key performance indicator is a measurement of performance for an organization

Start-up expenses

expenses you pay before the launch of the business, and before you start making money

Who is Milton Friedman?

American economist known for his advocacy of free markets and limited government intervention in the economy

What was the Milton Doctrine?

It stated that "The social responsibility of a business is to increase its profits." He believes that a company has no social responsibility to society, a companys only responsibility is to its shareholders

Marketing Segmentation

the process of dividing a broad market into smaller groups. This helps the company tailor what needs to be redone

4 P's

Product
Place
Promotion
Price

product

making sure a good or service has a need or want in the market and having a product differentation from competitions goods and services

Price

selecting the best price to sell your product for low price strategies and high price strategies

promotion

advertising (paid sponsoring)
personal selling (person-person sales)
sales promotions (premiums, coupons)
public relations (communication efforts to have good will in the eye of the public)

what is market research?

process of collecting and analyzing data about a certain target audience (done in surveys/interviews)

Balance sheet

financial statement that supplies detailed info on an organizations assets liabilities and owners equity

Positive or negative net worth

total assests - total liabilities = positive or neg.

venture capital

VC invests in a project where there is lots of risk normally a new or expanding business. Waits a few years to see business success

Angel Investors

These are individuals or groups who invest their own money in companies who are in the early growth stage. normally focus on high-growth companies early on instead of established businesses

bank loans

more likely to finance established businesses rather than startups. one of the most common forms of finance for small/medium enterprises. They can borrow from banks if they can back the loan inventory, accounts receivable or personal collateral.

SBA

An organization that guarantees loans to small businesses
ONLY PROVIDE A LOAN IF YOU HAVE 1/3 OF THE MONEY NEEDED

private loan

given by a private individual or organization without the involvement of the bank or insititutional lenders

costing a product

design + research- higher due to innovation
materials- often premium or custom making them more expensive
production- speciallized processes may cost more
marketing- extra spending to promote the unique values

service cost

labor- THE BIGGEST EXPENSE, esp. for skilled services
overhead- Costs like rent, technology, and support
time- services are often billed based on hours worked

"know how" costing

development- high upfront costs for creating knowledge (patents/software)
training & support- if know-how requires implementation or training, these costs are added in

Primary functions of financial management

-managing an organizations money so that it achieves its financial goals
-tracks flow of money in and out of the organization
- collaborate with groups across the organization to determine how available funds will be used and how much money is needed

Main functions

- financial planning
- investing (spending money) and financing (raising money)

SMART

S pecific
M easurable
A chievable
R elevant
T ime bound

What are clash flows?

Cash flows refer to the movement of money in and out of a business reflecting its liquidity

Cash flow formula

operating cash + income + non-cash expenses

Positive cash flow

indicates that a company has more money coming in than going out

negative cash flow

spending more money than you are earning

income sheet

summarizes a firms revenues and expenses and shows total profits or losses over a period of time

Why do companies use income sheets?

to see quarterly/annual profit statements that investors/creditors and other people can view

What does a balance sheet show?

total profit
expenses
net income
net loss

balance statement

a financial statement that reports a companys assets, liabilities and shareholder equity at a certain point in time.

what does a balance sheet tell?

what a company owns and the profit they're making and how much they owe.

Investor Relations (IR) page

where investors can access a company's balance sheets, income statements, and cash flow statements

What do investors look at before investing?

The company's financials
identifying and calculating the gross profit each year
look at the pricing/production strategy and costs
Balance sheet can tell an investor if it is worth investing in

financial accounting

external users of a comapny's financial info
needed in business because it shows the financial reports of the business as a whole

Managerial accounting

focuses on internal users like employees and managers
needed in business because it is important to understand your company's health and performance

how do managers make department decisions?

1. anticipating potential problems or opportunities and creating plans to deal with them

2. coordinating and allocating the resources needed to implement plans

3. guiding personnel through the implementation process

4. reviewing results and making any neccessary changes

performance goals hiring practice?

understanding and researching companies goals and align them with the companies vision to best benefit the company

mangers performance goals/expectations are communicated in a variety of ways including job objectives, schedules, deadlines, and product/service quality requiremnts

data driven analysis like KPI which will track and show the departments success this will include productivity, customer satisfaction and overall quality of the business

KSAs

Knowledge, skills, and abilities
determine which individuals fit the role
MORE DETAIL = more skilled applicants will apply

What is the accounting equation?

ASSETS = LIABILITIES + OWNER EQUITY

who uses the accounting equation?

accountants use it to balance data for the org's financial transactions at various points in the year.

management information systems

methods and equipment that provides information about all aspects of a firms operations

5 main types of MIS

transaction processing system (TPS)
management support system (MSS)
decision support system (DSS)
executive information system (EIS)
expert system