Entrepreneurship Chapters 1-8 Vocabulary – Flashcards
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entrepreneur
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an individual who undertakes the creation, organization, and ownership of an innovative business with potential for growth; someone who starts with a brilliant idea and wants to make it happen
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venture
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a new business undertaking that involves risk; starting up a new, risky business
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economics
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the study of how people choose to allocate scarce resources to fulfill their unlimited wants; the study of how people use their limited resources to fulfill their needs and wants
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free enterprise system
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a system in which people have a right to make their own economic choices; ex. Choosing what products to buy, choosing to own private property, choosing to start a business and compete with other businesses; also called capitalism or a market economy
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profits
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money that is kept after all expenses of running a business have been deducted from the income; money that comes in because a product is sold
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market structure
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refers to the nature and degree of competition among businesses operating in the same industry; there are four different market structures: perfect competition, monopolistic competition, monopoly, and oligopoly
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monopoly
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a market structure in which a particular commodity has only one seller who has control over supply and can exert nearly total control over prices; a business that controls all production in an economy because it is the only business that sells that product
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oligopoly
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a market structure in which there are just a few competing firms; a type of economy in which there are more than one competing business at the top
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goods
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tangible or physical products; physical objects that can be bought or sold
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services
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intangible or non-physical products; something one person can provide for another; ex. Hair stylist provides a service or cutting, highlighting, fixing, etc. someone's hair
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need
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a basic requirement for survival; something you cannot live without; necessities
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want
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something that you do not have to have for survival but would like to have; a desire for something that is not necessary for survival
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factors of production
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the resources businesses use to produce the goods and services that people want; these include land, labor, capital, and entrepreneurship
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scarcity
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occurs when demand exceeds supply; limited amount of resources
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demand
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the quantity of goods or services that consumers are willing and able to buy; having the desire for something and the ability to pay for it
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elastic demand
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refers to situations in which a change in price creates a change in demand; ex. Demand for butter
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inelastic demand
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refers to situations in which a change in price has very little effect on demand for products; ex. Demand for milk; demand is inelastic when no acceptable substitutes are available, and customers need the product; the price change is small relative to buyer income, so if customers want the product, they will buy it; the product is a necessity and customers need it
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diminishing marginal utility
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law that establishes that price alone does not determine demand; each additional unit that is taken in, satisfaction is lowered.
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supply
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the amount of a good or service that producers are willing to provide; being able to provide a good or service
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equilibruim
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the point at which consumers buy all of a product that is supplied; the point where price and quantity demanded/ supplied is equal
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Gross Domestic Product
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the total market values of goods and services produced by a nation during a given period; consists of the consumption of goods and services, investment, government expenditures, and net exports; GDP
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business cycle
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the periodic random pattern of expansion and contraction that the economy goes through; the ups and downs of the economy over a period of time; using this, we can detect whether to use expansionary or contractionary policies
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enterprise zones
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specially designated areas of a community that provide tax benefits to new businesses locating there and grants for new product development; example of an incentive
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opportunity
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an idea that has commercial potential
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start-up resources
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include the capital, skilled labor, management expertise, legal and financial advice, facility, equipment, and customers needed to start a business
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new venture organization
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company that is the foundation of supporting all of products, processes, and services of the new business
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business failure
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- a business that has stopped operating with a loss to creditors; did not have choice but to end
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discontinuance
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a business that was purposely discontinued by an owner who wanted to start a new one or may be operating under a new name; the owner had the choice to end it
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competition
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the rivalry among businesses for consumer dollars
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investment
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the amount of money a person puts into their business as capital
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capital
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includes the buildings, equipment, tools, and other goods needed to produce a product or the money used to buy these things
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role model
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a person whose attitudes and achievements they tried to emulate
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foundation skills
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skills that entrepreneurs use regularly in setting up and running a business
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profile
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a set of characteristics or qualities that identifies a type or category of person
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achiever
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a person with a record of successes
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online business
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a company that conducts business through the internet
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services
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intangible (nonphysical) products that satisfy customers wants and needs
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sustainability
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the ability to achieve economic, social and environmental goals without compromising the ability of future generations to meet their own needs
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outsourcing
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hiring people and other companies to handle tasks a business cannot do or chooses not to do itself
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social entrepreneurs
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a type of entrepreneur who recognizes a social problems and uses entrepreneurial methods to create, organize, and manage a venture to address it
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strategic alliance
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a partnership formed among 2 or more companies
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corporate venture
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a new venture started inside a larger corporation
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innovation
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a new way of doing things; a new idea, method or device
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niche
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a small specialized segment of the market based on customer needs discovered in market research
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brainstorm
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to think freely in order to generate ideas
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demographics
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personal characteristics that describe a population by age, gender, income, ethnic background, education, and occupation, among others
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trade magazine
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a periodical published for a specific type of business or industry
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specialty magazine
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a periodical published for people with special interests, such as sports, canoeing, fashion, and a variety of other areas
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values
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the beliefs and principles by which you choose to live that define who you are, shape your attitudes and choices and help you identify your priorities
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goodwill
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the favor and loyalty a business requires by its good education
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franchise
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a legal agreement to begin a new business in the name of a recognized company
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franchisee
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the buyer of a franchise who is given the right to its product, process, or service; buyer receives the way of operating a business and a product with name recognition
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franchisor
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the seller of a franchise who is giving the buyer its planning and management expertise
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business broker
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someone whose job it is to bring buyers and sellers of business together for a fee
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trade show
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a gathering or exhibition where vendors and manufacturers introduce new items and promote established products and services
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global economy
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the interconnected economies of the nations of the world
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exporting
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the selling and shipping of goods to another country
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importing
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buying or bringing in goods from other countries to sell
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trade barrier
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a restriction on goods entering or leaving a country
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tariff
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a type of trade barrier; taxes imposed by a government on imported or exported goods
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gross domestic product (GDP)
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the total value of all goods produced during the year
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interpreter
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someone who translates the other person's language to your language
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Standard Industrial Trade Classification (SITC) codes
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a tool to learn what kinds of products are traded in specific countries
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International Business Exchange (IBEX)
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an electronic commerce system that lets you sell products and services online anywhere in the world
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trade missions
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let small business owners to meet and talk with foreign agents, distributors, or potential business partners
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"best prospect" list
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a list of products one needs to participate in a trade mission
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disposable income
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money people have to spend after paying for necessary expenses
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trade intermediary
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an agency that serves as a distributor in a foreign country
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foreign joint venture
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an alliance between an American small businesses and a company in another nation
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export management company
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a business that handles all the tasks related to exporting for a manufacturer in exchange for a commission
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freight forwarder
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a business that handles overseas shipments
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business concept
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a clear and concise description of an opportunity; contains the product or service, the customer, the benefit, and the distribution
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feature
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a distinctive aspect, quality, or characteristic of a product or service
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benefit
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something that promotes or enhances the value of the product or service to the customer
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feasibility analysis
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the process used to determine the initial feasibility of an idea; helps the entrepreneur decide whether a new business concept has potential
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industry
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a group of businesses with a common interest, such as financial services, computers, retail, or groceries
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target customers
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the people that are most likely to buy the products or services of a business
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prototype
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a working model of the new product
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competitive matrix
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a tool for organizing important information about the competition
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business model
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describes how you intend to create and capture value with your business concept
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value chain
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the distribution channel through which your product or service flows from the producer to the customer
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business plan
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a document that presents a complete and detailed picture of the new business and the strategy to launch that business
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executive summary
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a brief explanation of the key points contained in a business plan
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vision statement
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establishes the scope and purpose of a company an reflects its values and beliefs
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mission statement
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expresses the specific aspirations of a company, the major goal for which it will strive
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distribution channel
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the means by which you deliver the product or service to the customer
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direct channel
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delivering the service directly to the customer
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indirect channel
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selling your product to someone else who then finds retail stores or other places and outlets to carry your product
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Small Business Administration (SBA)
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federal agency that provides services to small businesses and new entrepreneurs
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trade association
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offers technical and general assistance to entrepreneurs in a specific profession or industry
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beneficiaries
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end-users of a product or service
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industry
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a collection of businesses that are categorized by a specific business activity, such as transportation, electronics or food services
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value chains
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support a common line of products or services that satisfy market demands; includes raw material producers, manufacturers, suppliers, distributors, retailers, and anyone else who deals with other businesses in the industry
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carrying capacity
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a way to understand the industry's ability to support new growth
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complexity
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the number and diversity of contacts with which you must deal to do business
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market
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a group of people or companies who have a demand for a product or service and are willing and able to buy it
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target market
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the particular group of customers of interest to you
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market segmentation
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the process of grouping a market into smaller subgroups defined by specific characteristics
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market segments
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subgroups of buyers who have similar characteristics
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geographics
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the study of the market based on where customers live
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psychographics
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the study of consumers based on social and psychological characteristics
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industrial markets
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customers who buy goods or services for business use
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market research
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the collection and analysis of information aimed at understanding the behavior of consumers in a certain market
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exploratory research
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used when you know very little about a subject
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focus group
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a group of people whose opinions are studied to estimate the types of opinions that can be expected from a larger population
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descriptive research
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done when you want to determine status
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historical research
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involves studying the past
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secondary data
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information that has already been collected by someone else
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primary data
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information you collect yourself
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barriers to entry
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conditions or circumstances that make it difficult or costly for outside firms to enter a market to compete with the established firm or firms
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economies of scale
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situations where the cost of producing one unit of a good or service decreases as the volume of production increases
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brand loyalty
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loyalty to or the tendency to buy a particular brand of a product
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market share
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a portion of the total sales generated by all competing companies in a given market
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niche
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a small, specialized segment of the market based on customer needs discovered in market research
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market positioning
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the act of identifying a specific market niche for a product or service
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competitive advantage
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a feature that makes a product more desirable than its competitors' products
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customer profile
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a complete picture of a business's prospective customers
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customer needs analysis
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pinpoints the features and benefits of your goods or services that customers value
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sole proprietorship
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a business that is owned and operated by one person
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liability protection
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insurance
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unlimited liability
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full responsibility for all debts and actions of the business
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partnership
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an unincorporated business with two or more owners
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general partner
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a participant in a partnership who has unlimited personal liability and takes full responsibility for managing the business
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limited partner
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a partner whose liability is limited to his or her investment
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corporation
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a business that is registered by a state and operates apart from its owners
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C-corporation
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an entity that pays taxes on earnings
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shareholders
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the owners of the corporation
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limited liability
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partial responsibility of a corporate shareholder; her or she is responsible only up to the amount of the individual investment
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Subchapter S corporation
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a corporation that is taxed like a partnership
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nonprofit corporation
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a legal entity that makes money for reasons other than the owners' profit
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limited liability company (LLC)
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a company whose owners and managers enjoy limited liability and some tax benefits, but it avoids some restrictions associated with Subchapter S corporations
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intellectual property law
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the group of laws that regulates the ownership and use of creative works
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patent
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a document that grants an inventor the right to exclude others from making, using, or selling an invention during the term of the patent
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public domain
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comprises all intellectual property whose protection has expired
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patent pending
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the status of an invention between the time a patent application has been filed and when it is issued or rejected
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copyright
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a legal device that protects original works of authors
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trademark
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a word, symbol, design, or color that a business uses to identify itself with something it sells
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service mark
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a word, symbol, design, or color that describes a service business
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permit
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a legal document giving official permission to run a business
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license
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a legal document giving official permission to run a business
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contract
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a binding legal agreement between two or more persons or parties
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consideration
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what is exchanged for the promise
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capacity
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the legal ability to enter into a binding agreement
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Equal Opportunity Employment Commission (EEOC)
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the government agency charged with protecting the rights of employees
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wrongful termination
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the right of an employee to sue his or her employer for damages in the event that he or she is terminated for an unacceptable reason
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price discrimination
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the charging of different prices for the same product or service in different markets or to different customers
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Uniform Commercial Code (UCC)
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a group of laws that regulates commercial business transactions
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warranty of merchantability
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a guarantee about the quality of goods or services purchased that is not written down or explicitly spoken
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bait-and-switch advertising
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involves advertising at a very low price to attract customers who are then persuaded to switch to a more expensive product
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FICA
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Federal Insurance Contributions Act; a Social Security payroll tax, figured as a percentage of an employee's income; an employer is required to contribute an amount equal to the amount deducted from each employee's paycheck
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Uniform Trade Secrets Act (UTSA)
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a law that protects all intellectual property
