Entrepreneurship

Chapter # 04
Creativity and the Business Idea
words Definitions

Focus groups Groups of individuals providing information in a structured format.

Brainstorming A group method for obtaining new ideas and solutions.
Problem A method for obtaining new ideas and solutions by focusing on problems.

inventory
analysis
Creative problem A method for obtaining new ideas focusing on the parameters.

solving
Reverse A group method for obtaining new ideas focusing on the negative.

brainstorming
Gordon method Method for developing new ideas when the individuals are unaware of the
problem.
Checklist method Developing a new idea through a list of related issues.
Free association Developing a new idea through a chain of word associations.
Forced Developing a new idea by looking at product combinations.

relationships
Collective Developing a new idea by group members regularly recording ideas.

notebook
method
Attribute listing Developing a new idea by looking at the positives and negatives.
Big-dream Developing a new idea by thinking without constraints.

approach
Parameter Developing a new idea by focusing on parameter identification and creative

analysis synthesis.
Product life-cycle The stages each product goes through from introduction to decline.
Product planning The stages in developing a new product.

& development
process
Idea stage First stage in product development process.
Concept stage Second stage in product development process.
 Product Third stage in product development process.

development
stage
Test marketing Final stage before commercialization in product development process.

stage

Chapter # 06

Protecting the Idea and other Legal issues for the Entrepreneur

Words Definitions

Intellectual Any patents, trademarks, copyright, or trade secrets held by the

property entrepreneur.
- It is an Important asset of Entreprenure.
Patents Contract between the government and an inventor. Grants holder
protection from others making, using, or selling a similar idea.
Provisional The initial application to the U.S Patent and Trademark Office (PTO)
patent providing evidence of first to market.
application
Trademark A distinguishing word, name, or symbol used to identify a product.
Copyright Protects original work of authorship. Right given to prevent others from
printing, copying, or publishing any original works of authorship.
Trade secret Protection against others revealing or disclosing information that could be
damaging to business.
Licensing Contractual agreement giving rights to others to use intellectual property in
return or a royalty or fee.
Product safety & Responsibility of a company to meet any legal specifications regarding a
liability new product covered by the Consumer Product Safety Act.
Contracts A legally binding agreement between two parties.
 Chapter # 07

The Business Plan: Crating & Starting the Venture

words Definitions

Business plan Written document describing all relevant internal and external elements
and strategies for starting a new venture.
Environmental Assessment of external uncontrollable variables that may impact the
analysis business plan.
Industry analysis Reviews industry trends and competitive strategies.
Description of Provides complete overview of the products, services, and operations of a
the venture new venture.
Production plan Details how the products will be manufactured.
Marketing plan Describes market conditions and strategy related to how the products and
services will be distributed, priced, and promoted.
Organizational Describes form of ownership and lines of authority and responsibility of
plan members of new venture.
Assessment of Identifies potential hazards and alternative strategies to meet business plan
risk goals and objectives.
Financial plan Projections of key financial data that determine economic feasibility and
necessary financial investments commitment.

Chapter # 08

The Marketing Plan

Words Definition

Marketing plan Written statement of marketing objectives, strategies, and activities to be

followed in business plan.
Marketing system Interacting internal and external factors that affect ventures ability to
provide goods and services to meet customer needs.
Marketing mix Combination of product, price, promotion, and distribution and other
marketing activities needed to meet marking objectives.
Situation analysis Describes past and present business achievement of new venture.
Target market Specific group of potential customers toward which ventures aims its
marketing plan.
Market Process of dividing a market into definable and measurable groups for
segmentation purposes of targeting marketing strategy.
Marketing goals Statements of level of performance desired by new venture.
& objectives
Marketing Specific activities outlined to meet the ventures business plan goals and
strategy & action objectives.
plan

Chapter # 09

The Organizational Plan

Words Definitions

C Corporation Most common form of corporation regulated by statute and treated as a

separate legal entity for liability and tax purposes.
Proprietorship Form of business with single owner who has unlimited liability, controls all
decisions, and receives all profits.
Partnership Two or more individuals having unlimited liability who have pooled
resources to own a business.
Corporation Separate legal entity that is run by stockholders having limited liability.
S Corporation Special type of corporation where profits are distributed to stockholders
and taxed as personal income.

Chapter # 10
 The Financial Plan

Words Definition

Pro-forma Projected net profit calculated from projected revenue minus projected
income costs and expenses.
Pro-forma cash Projected cash available calculated from projected cash accumulations
flow minus projected cash disbursement.
Pro-forma Summarizes the projected assets, liabilities, and net worth of the new
balance sheet venture.
Assets Items that are owned or available to be used in the venture operations.
Liabilities Money owes to creditors.
Owner equity The amount owners have invested and/or retained from the venture
operations.
Breakeven Volume of sales where the venture neither makes a profit nor incurs a loss.
Pro-forma Summarizes all the projected sources of funds available to the venture and
sources & how these funds will be disbursed.
applications of
funds