CHAPTER 2

• production design for a product and a working model

  prototype
• a visual representation of the critical components

  business model canvas
• front line of defense against a poor idea

  business plan
• the hook that either catches potential investors or loses their attention

  executive summary
• a concise communication of strategy, including a business definition and explanation of competitive advantage

  mission
• a statement that informs customers and employees what an organization’s goal is and describes the strategy and tactics to meet it

  mission statement
• broader and more comprehensive, painting the big picture of what you want your organization to become

  vision
• the beliefs, values, and behavioral norms of an organization

  culture
• will provide the credible data and information to determine and demonstrate the market viability of your proposed business on paper

  opportunity analysis and research
• a critical view of industry definition, industry size and growth, product and industry life cycle, and any current or anticipated legal or regulatory concerns

  industry analysis
• addresses the roles of the community, region, nation, and/or the rest of the world as they relate to your business

  environmental analysis
• an investigation that provides evidence of a market opportunity

  proof of market
• groups defined by common factors such as demographics, psychographics, age, or geography that are of primary interest to a business

  target market
• the next important component of the opportunity analysis; compares an organization with several direct and indirect competitors by name in a manner that is meaningful to targeted customers

  competitive analysis
• a description of how you will reach your customers and your anticipated sales volume brings the opportunity and research discussion to the bottom line of sales

  marketing strategy and plan
• the combination of the four factors— product, price, place, and promotion— that communicates a marketing vision

  marketing mix
• a statement of the marketing goals and objectives for a business and the intended strategies and tactics to attain them

  marketing plan
• the four P's of the marketing mix

  products, pricing, promotion, place
• (four ps) must meet or create a customer need (packaging is included)

  product
• (four ps) so that your target customers will buy it and the business will make a profit

  pricing
• (four ps) advertising, publicity, and other promotional methods, such as discount coupons or giveaways

  promotion
• paid promotion through media outlets

  advertising
• community activities that are designed to enhance your organization’s image

  public relations
• free promotion

  publicity
• includes telemarketing, direct mail, in person selling, and other personalized efforts

  direct marketing
• (four ps) the venue from which you will sell and distribute your product

  place
• where the rubber meets the road in the planning process

  management and operations
• demonstrate organizational viability in financial term

  financial analysis and projections
• numerical representation of the start-up costs plus a verbal description of capital requirements

  sources and uses of capital
• shows cash receipts less cash disbursements over a period of time

  cash flow statement
• your three years of projected balance sheets will provide snapshots of your business at specific points in time

  balance sheet projections
• a financial statement summarizing the assets, liabilities, and net worth of a business

  balance sheet
• any item of value

  asset
• a business debt

  liability
• the difference between assets and liabilities

  net worth
• net worth

  owner's equity
• summarizes income and expense activity over a specified period and shows net profit or loss

  income statement
• an income statement

  profit and loss statement
• calculation that will determine your organization’s breakeven point

  breakeven analysis
• when the volume of sales exactly covers the fixed costs; will help demonstrate whether there is a viable market for your business

  breakeven point