Entrep. Review #1

Questio Answer
Capital Buildings, equipment, tools & other goods needed to produce a product, or the money used to purchase these items.
R.O.I. Return On Investment
Monopoly A market that only has one producer, and has no competition. A company that has a monopoly is able to charge higher prices because consumers have nowhere else to go.
Importing Buying goods from other countries to sell in your own country.
Profit The money left over after all the expenses of a business have been deducted from the income.
Equilibrium Point at which supply equals demand, neither leaving a surplus or a shortage.
Scarcity When demand is higher than supply. It allows businesses to increase prices.
Demand The quantity of goods or services that consumers are willing and able to buy.
Franchise Legal agreement to market a company’s products or services in a specific geographic area.
Entrepreneurship The process of getting into and operating one’s own business.
Exporting Making goods in your own country and sending them to other countries.
Competition When several businesses strive for the same customer or market. Rivalry among Businesses.
Target Market The specific market segment where all of a business’s activities are directed.
Demographics Statistical data that describes a given market by criteria such as age, gender, and income.
Psychographics Statistical data that describes a given market by criteria such as personality, opinions, and lifestyle.
Geographics Study of the market based on where customers live by region, state, city, and/or area.
Mission Statement Formal declaration that contains specific goals for the company
Small Business Association (SBA) This association helps assist Americans in starting and growing their business.
Increasing Prices This is how business’s respond to scarcity in the marketplace or if there is a market shortage.
Price Decreases This happens when new competitors enter a market and the supply of goods increases
Entrepreneur Individuals who undertake the creation, organization and ownership of a business. They turn a creative idea into a profit.
Profit Motive Primary reason people start a business.
Equilibrium Pricing Pricing that happens when consumers buy all products supplied leaving neither a surplus nor a shortage.
Target Market This is what a company must identify in order to sell goods or services.
Operating Expenses Advertising & promotional activities are all considered this kind of expense.
1st Step in Market Research Identify Your Information Needs
Buying Motives When people buy based on other’s opinions.
Joe is a manufacturer who exports 90% of his products overseas. When considering a location for his new site he needs to consider this. Accessibility of distribution methods
Markup This is the amount added to the cost of items to cover expenses and ensure a profit.
Variable Expenses Expenses that change with each unit produced.
Character Of the 5 C’s of credit, this one refers to a business owner’s reputation for fair & ethical practices.
Balance Sheet Shows a company what they are worth at a given time.
Jackie spent $130,000 on her goods & had net sales of $200,000 and expenses of $40,000. Her net profit is $30,000 ($200,000 – $130,000-$40,000 = $30,000) $30,000
If you sell designer handbags at $300 and you want to give the customer a 20% discount how much would you take off the price. $60
Non-Profit Organization (NPO) Legal entity that makes money for a reason other than the owner’s profit.
If you invest $20,000 and wanted a 25% return. $5,000
Market Segmentation Breaking down the market into smaller groups
Marking up a product from $5 to $8 is this percentage of markup. 60%
Net Income If a company has more assets than liabilities.
Place The part of the marketing mix (4 P’s) that deals with getting the product to the consumer.
Does NOT give money to an entrepreneur Federal Reserve Bank “FED”
Sole Proprietorship Easiest form of business to create
If a company owes $100,000 on its building. This is the section of the balance sheet that you would find this. Liabilities Section
Disadvantage of Owning Your Own Business You could lose your investment if the business fails.
A golf course and a movie theater compete for the same customers’ dollar. Indirect Competition
Entrepreneurs DO NOT Collect taxes from the government
Wholesale cost of shoes is $50. If you mark them up 100% this is what they would cost. $100
Cabinet business selling to retailers should locate their business here. Industrial Park