glossary F-P

Question 1

feasibility analysis

Answer 1

A preliminary evaluation of a business
idea to determine if it is worth pursuing. (109

Question 2

financial feasibility analysis.

Answer 2

A preliminary financial assessment of a new venture that considers the total start up cash
needed, financial performance of similar businesses, and the overall financial attractiveness of the proposed venture. (124)

Question 3

financing activities

Answer 3

Activities that raise cash during a certain period by borrowing money or selling stock, and/or use cash during a certain period by paying dividends, buying back outstanding stock, or buying back outstanding bonds. (313)

Question 4

first mover advantage

Answer 4

A sometimes significant advantage,
created by the opportunity to establish brand recognition and/or market power, gained by the first company to produce a product or service or the first company to move into a market. (201)

Question 5

fixed costs

Answer 5

The costs that a company incurs in operating a
business whether it sells something or not (e.g., overhead). (164, 236, 497)

Question 6

franchisee

Answer 6

An individual or firm that enters into a franchise
agreement and pays an initial fee and an ongoing royalty to a franchisor in exchange for using the franchisor’s trademark and method of doing business. (560)

Question 7

guerilla marketing

Answer 7

A low budget approach to marketing that
relies on ingenuity, cleverness, and surprise rather than traditional techniques. (432)

Question 8

idea

Answer 8

A thought, impression, or notion. (74)

Question 9

industry

Answer 9

A group of firms producing a similar product or
service, such as Pilates and Yoga studios, and solar panels. (118, 188)

Question 10

industry analysis

Answer 10

Business research that focuses on the
potential of an industry. (188)

Question 11

industry/target market feasibility

Answer 11

An assessment of the overall appeal of the industry and target market for the product or service being proposed. (118)

Question 12

key assets

Answer 12

The assets a firm owns that enable its business
model to work. (161)

Question 13

liability of newness

Answer 13

Situation that often causes new firms to
falter because the people who start the firms can’t adjust quickly enough to their new roles, and because the firm lacks a “track record” with customers and suppliers. (339)

Question 14

licensee

Answer 14

A company that purchases the right to use another company’s intellectual property. (536)

Question 15

market analysis

Answer 15

An analysis that breaks the industry into
segments and zeros in on the specific segment (or target market) to which the firm will try to appeal. (234)

Question 16

market segmentation

Answer 16

The process of studying the industry in which a firm intends to compete to determine the different potential target markets in that industry. (234, 413

Question 17

marketing mix

Answer 17

The set of controllable, tactical marketing
tools that a firm uses to produce the response it wants in the target market; typically organized around the four Ps. (421)

Question 18

4 Ps

Answer 18

product, price, promotion, and place (or distribution). (421)

Question 19

mature industry

Answer 19

An industry that is experiencing slow or
no increase in demand, has numerous repeat (rather than new) customers, and has limited product innovation. (203)

Question 20

net sales

Answer 20

Total sales minus allowances for returned goods
and discounts. (308)

Question 21

operating activities

Answer 21

Activities that affect net income (or
loss), depreciation, and changes in current assets and current liabilities other than cash and short-term debt. (313)

Question 22

(Business) opportunity

Answer 22

A favorable set of circumstances that creates a
need for a new product, service, or business(72)

Question 23

opportunity gap

Answer 23

An entrepreneur recognizes a problem and
creates a business to fill it. (73)

Question 24

organizational feasibility analysis

Answer 24

A study conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to be successful. (122)

Question 25

passion for their business

Answer 25

An entrepreneur’s belief that his or her business will positively influence people’s lives; one of the characteristics of successful entrepreneurs. (36)

Question 26

patent

Answer 26

A grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for the term of the patent. (456)

Question 27

(MARKET) position

Answer 27

How the entire company is situated relative to its competitors. (189, 234)

Question 28

prior entrepreneurial experience

Answer 28

Prior start up experience; this experience has been found to be one of the most consistent predictors of future entrepreneurial erformance. (343)

Question 29

private corporation

Answer 29

A corporation in which all of the shares
are held by a few shareholders, such as management or family members, and the stock is not publicly traded. (281)

Question 30

product

Answer 30

The element of the marketing mix that is the good or service a company offers to its target market; often thought of as something having physical form. (422)

Question 31

product/customer focus

Answer 31

A defining characteristic of successful entrepreneurs that emphasizes producing good
products with the capability to satisfy customers. (38)

Question 32

pro forma balance sheet

Answer 32

Provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time. (321)

Question 33

promotion

Answer 33

The marketing mix category that includes the
activities planned by a company to ommunicate the merits of its product to its target market with the goal of persuading people to buy the product. (426)

Question 34

price

Answer 34

The amount of money consumers pay to buy a product; one of the four Ps in a company’s marketing mix. (423)

Question 35

place

Answer 35

The marketing mix category that encompasses all of the activities that move a firm’s product from its place of origin to the consumer (also known as distribution). (433)

Question 36

public corporation

Answer 36

A corporation that is listed on a major stock exchange, such as the New York Stock Exchange or the NASDAQ, in which owners can sell their shares at almost a moment’s notice. (281)

Question 37

Self-efficacy

Answer 37

Entrepreneurial Mindset

is the measure of one’s own belief in competence to complete tasks and reach goals

Question 38

A feasibility analysis’s four key areas

Answer 38

product/service feasibility, industry/target market feasibility, organizational feasibility, and financial feasibility.

Question 39

product/service feasibility include

Answer 39

product demand and product desirability

Question 40

industry/target market feasibility include

Answer 40

Industry Attractiveness and Target Market Attractiveness

Question 41

organizational feasibility

Answer 41

Management Prowess and Resource Sufficiency

Question 42

financial feasibility include

Answer 42

Total Start-Up Cash Needed, Financial Performance of Similar Businesses, Overall Financial Attractiveness of the Proposed Venture