Entrepreneur Flashcards
(18 cards)
Break-even Point
The minimum sales revenue or total units sold needed for a business to be able to cover its own expense and begin to make a profit.
Cash Flow Forecast
Process of estimating the cash that will be coming into a business and the cash that will be flowing out of the business during the same period of time.
Debt Financing
Obtaining funds to start or operate a business by borrowing money that has to be paid back to a lender. The entrepreneur is responsible for paying back the debt and interest even if there is no profit. The lender typically has no ownership in the business.
Demand
The quantity (amount) of a good or service buyers are willing to purchase (per unit of time) at various prices.
Equity Financing
obtaining funds to start or operate a business by selling shares of ownership in the business; equity investors share in the profits.
Expense
Product Cost plus operating expenses.
Interest
Price being paid to the lender for using his or her money.
Loss
Total expenses minus total revenue expanded, over a period of time, when total revenue is less than the total expenses; this is the net financial loss the business has experienced through its operation over that period of time.
Market Place
That price at which the the quantity that buyers are willing to buy (per unit of time) is equal to the quantity that sellers are willing to suply.
Operating Expense
Costs that are required to cover the basic, ongoing operation of the business such as rent, advertising and utilities. For production of goods, operating expenses do not include product costs.
Opportunity Cost
The next best alternative use given up when resources (such as time or money) are used for an item or activity.
Product Cost
Usually refers to the cost of the actual material and labor used to produce the goods that are sold to customers. Also called soft of goods sold.
Profit
Total revenue minus total expenses, over a period of time, when total revenue is greater than total expenses; this is the net income a business has earned over that period of time, after covering all expenses (except taxes).
Revenue
Total dollar amount a business receives from the sale of its goods or services over a particular period of time.
Start-up Costs
Something sold to customers that is not physical (tangible) and cannot really be “touched”.
Supply
The quantity (amount) of a good service sellers are willing to supply (per unit of time) at various prices.
Target Marking
A smaller portion of the overall main customer group for a particular business or industry. This smaller group is made up of potential customers who are believed to be most likely to purchase the good or service offered by the entrepreneur.
Venture Capitalist
Organization or individuals who professionally provide equity financing for entrepreneurial ventures that are typically too risky to qualify for bank loans.
