ENTREPRENEURSHIP: GLOSSARY OF TERMS
Angel investors: Individuals
who have capital that they are willing to risk. Angels are often successful
entrepreneurs who invest in emerging entrepreneurial ventures, often as a
bridge from the self-funded stage to the point in which a business can attract
venture capital.
Assets: Items
of value owned by a company and shown on the balance sheet, including cash,
equipment, inventory, etc.
Balance
sheet: Summary statement of a company’s financial position at a
given point in time, listing assets as well as liabilities.
Breakeven point: Dollar
value of sales that will cover, but not exceed, all of the company’s costs,
both fixed and variable.
Bridge finance: Short-term
finance that is expected to be repaid quickly.
Browser:
A
computer program that enables users to access and navigate the World Wide Web.
Business incubator: This
is a form of mentoring in which workspace, coaching, and support services are
provided to entrepreneurs and early-stage businesses at a free or reduced
cost.
Business plan: A
written document detailing a proposed venture, covering current status,
expected needs, and projected results for the enterprise. It contains a
thorough analysis of the product or service being offered, the market and
competition, the marketing strategy, the operating plan, and the management as
well as profit, balance sheet, and cash flow projections.
Capital: Cash
or goods used to generate income. For entrepreneurs, capital often refers to
the funds and other assets invested in the business venture.
Cash flow: The
difference between the company’s cash receipts and its cash payments in a given
period. It refers to the amount of money actually available to make purchases
and pay current bills and obligations.
Cash flow statement: A
summary of a company’s cash flow over a period of time.
Collateral: An
asset pledged as security for a loan.
Copyright: Copyright
is a form of legal protection for published and unpublished literary,
scientific, and artistic works that have been fixed in a tangible or material
form. It grants exclusive rights to the work’s creator for a specified period
of time.
Corporation: A
business form that is an entity legally separate from its owners. Its important
features include limited liability, easy transfer of ownership, and unlimited
life.
Depreciation: The
decrease in the value of assets over their expected life by an accepted
accounting method, such as allocating the cost of an asset over the years in
which it is used.
E-commerce: The
sale of products and services over the Internet.
Entrepreneur: A
person who organizes, operates, and assumes the risk for a business venture.
Equity: An
ownership interest in a business.
Home-based
business: A business, of any size or type, whose primary office is
in the owner’s home.
Income statement: Also
known as a “profit and loss statement,” it shows a firm’s income and expenses,
and the resulting profit or loss over a specified period of time.
Intangible
assets: Items of value that have no tangible physical properties,
such as ideas.
Internet: The
vast network of networks connecting millions of individual and networked
computers worldwide.
Inventory: Finished
goods, work in process of manufacture, and raw materials owned by a company.
Joint venture: A
legal entity created by two or more businesses joining together to conduct a
specific business enterprise with both parties sharing profits and losses.
Liabilities: Debts
a business owes, including accounts payable, taxes, bank loans, and other
obligations. Short-term liabilities are due within a year, while long-term
liabilities are due in a period of time greater than a year.
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