Entrepreneurship: Key Terms

All definitions come from Gale Business: Entrepreneurship Database unless otherwise noted.

Accounting: The recording and disclosure of a company's financial dealings. 

Accounts Payable: In an accounting statement, credit extended by suppliers of raw materials or finished products. Also called trade credit. 

Accounts Receivable: Unpaid accounts which arise from unsettled claims and transactions from the sale of a company's products or services to its customers. 

Assets: All items of value (including investments) owned by a person or organization. 

Balance Sheet: A financial statement listing the total assets (possessions) and liabilities (debts) of a company at a given time. 

Brand: Name, term, symbol, sign, or design used by a firm to differentiate its offering from those of its competitors. 

Break-even: The amount of goods that have to be sold in order for a business to make neither a loss nor a profit. 

Cash Flow: The movement of money into and out of a company over a specified period of time. A positive cash flow is when more comes in than goes out. A negative cash flow is when more goes out than comes in. 

Customer Lifetime Value: The amount of revenue generated from one customer over the lifetime of the relationship. 

Demographics: Statistics on various markets, including age, income, and education, used to target specific products or services to appropriate consumer groups. 

Expenses: The money that a company spends in the course of doing business. 

Liabilities: Debts that a company takes on as it conducts business. 

Marketing Mix: The balance of marketing techniques required for selling the product. 1) Price - the price of the product, particularly the price compared to competition 2) Product - targeting the market and making the product appropriate to that market segment 3)  Promotion - sale promotion, advertising, sponsorship, or other promotions. 4) Place - how the product is distributed. Current trends are towards a shortening the chain of distribution. Also called the Four (4) Ps. 

Market Segmentation: A way to identify consumers who differ in purchasing behavior. 

Market Share: The percentage of the total sales of a product that is sold by one company. 

Net Loss: When total expenses are greater than total revenues for a business. (Editorial Board. (2015). Concise Dictionary of Commerce. V&S Publishers.)

Net Profit: Money earned after production and overhead expenses have been deducted. 

Owner's Equity: 

Profit Margin: Profit as a percentage of sales. The higher the margin, the better it is for the firm. 

Revenue: The total quantity of money that a business or organization brings in during a set period of time. 

ROI (Return on Investment): A performance measure used to evaluate the efficiency of an investment. It is usually expressed as a percentage or ratio where return of an investment is divided by the cost of the investment. 

SWOT (Strengths, Weaknesses, Opportunities, Threats): These factors provide a reference which an organization can use to conduct an analysis of its operations.