Glossary

Asset: Properties and valuables of an individual or organization including land, structures, system improvements, equipment, vehicles, inventory, receivables, investments and cash.

Business plan: A plan that describes the detailed workings of a business.

Capital: Items acquired or constructed with a life expectancy of more than one year and havin a value greater than a set amount, typically $500.

Cooperative: An enterprise that produces or distributes products/services and is owned an operated by its members.

Corporation: A publicly or privately owned business entity that is separate from its owner and has a legal right to do business in its own name; stockholders are not responsible for the debts or taxes of the business.

Direct competition: The competition between products that perform the same function.

Expenses: Payments made to others for goods or services.

Feasibility study: A study done to determine whether a project is possible and capable of success.

Indirect competition: The competition between products that are similar to each other and close substitutes for one another (for example: margarine and mayonnaise are indirect competitors).

Inventory: All goods and materials in stock for use in operations.

Investor: Someone who will provide an entrepreneur with the money needed to begin or operate a business venture.

Longterm: Any assetor liability that will be used or due in more than a year.

Market penetration: The degree of success and acceptance of a product by a specified targe market.

Market segment: A group of people with a trait that causes them to have similar product needs.

Market share: The portion of the total market sold by a specific company, expressed as a percentage.

Partnership: A form of business ownership when two or more people own the company. A partnership agreement will be signed that tells how the company is to be run, who is responsible for doing what jobs, and other important information about the company.

Pro forma: Advance projections that show what will happen in the future and whether your business will earn or lose money in a particular month or year.

Revenue: Income or oney paid for services rendered or products sold.

Sole proprietorship: A business owned by one person and that has not been incorporated.

Startup capital: All the money needed to get a business going. Start‐up capital is required before any sales are ever made.

Unique Selling Proposition: A point used in marketing that shows how a business is different and unique from its competitors.

Variable Costs: Costs that are not stable and change with the production level.

Working capital: The money used to maintain inventory and cover operational costs.