When a business’s expenses and sales equal zero because the business has sold exactly enough units to cover its fixed expenses.
A consumer need or want that can be potentially met by a new business.
A quick description of your business that you use to explain it to customers and investors.
Rival businesses competing for the dollars your target market spends.
A business in the market that sells a product or service similar to yours.
Entrepreneurs that create business ideas by identifying sources of opportunity.
What a product does and how it appears to the senses (sight, sound, taste, smell, and touch).
Relationships between important financial data that is expressed as a fraction or a percentage.
Fixed Operating Expenses
The operating expenses that a business must pay regardless of how many sales are made.
A business that sells a different product or service from yours, but fills the same customer need or want.
Entrepreneurs that apply their hobbies, skills, and interests to a business opportunity.
The simplest organizational structure, which contains a direct chain of command through levels of personnel.
The create a product, such as a factory that creates shoes.
A potential group of customers, people or businesses that are able and willing to purchase a particular product or service.
An organized way to gather and understand information needed to make informed business decisions based on the potential customers and competitors that exist in the market.
The art of presenting a business in a way that clearly communicates the value of the product or service.
A detailed guide that includes marketing goals and the strategies to reach these goals – called the Marketing Mix. The Marketing Mix includes the five P’s: People, Product, Place, Price, Promotion.
The amount of profit (or loss) the business earns after paying expenses and taxes.
Systems for dividing work, authority and responsibility. There are different approaches to structures based on what is best for the business.
The profit earned before paying taxes on it. Found by taking the total contribution margin minus the fixed monthly expenses.
Puts employees in more than one department together to work towards a specific goal.
Sell directly to the customer, for instance a local shoe store that gets its shoes from the different shoe companies wholesalers to sell to customers that come into the store.
The amount of money brought in by a business before any expenses. Equal to the total number of unity sold multiplied by the selling price per unit for the period that for which the statement is being prepared.
Existing information that was previously gathered for a purpose other than the study at hand.
Primary Data is new information gathered during the Market Research phase that comes directly from potential groups of customers or competitors in the market. We call this primary data, because it is data that entrepreneurs collect for the first time, directly from the source. Entrepreneurs should return to their list of questions, eliminate those that were answered by secondary research, and determine which ones require primary research.
Common ways of obtaining data are: Interviews or Surveys: asking potential customers their thoughts regarding your business, or the current business they visit Focus Groups; bringing a small group of people together to help solve a problem or answer a set of questions Observations: visit competitors in the area and observe how they interact with customers.
Identifying a target market segments helps find very specific information about a group of potential customers. It can include the following information: Demographics; objective social and economic facts about people such as age, gender, and family size, Geographics; where customers live and where businesses are located, including region, city, and neighborhood. Psychographics; Psychological characteristics of consumers such as attitudes, beliefs, and personalities. Buying Patterns; what customers are willing to spend money on, and how much they are willing to spend.
Offers services to customers, for example a shoe repair shop.
An evaluation of a company’s internal Strengths, internal Weaknesses, external Opportunities in the market and external Threats in the market.
Target Market Segment
A specific group of customers in the broader target market market who are most likely to buy a product or service.
Unit of Sale
If it different for every business, and is based on the amount of product or service a customer buys.
What makes a business unique and potentially better than the competition. It is made up of features and benefits.
They sell products in larger volumes (but less than the manufacturer) to the retailer, such as a global shoe company, a company that gets its shoes made by the a factory manufacturer and then sells them to local stores.