BGCSE BSSE Entrepreneurship (1441) flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Entrepreneurial mindset

A way of thinking that combines opportunity spotting, initiative, calculated risk-taking, persistence, adaptability, and acceptance of responsibility for business outcomes.

Opportunity cost

The value of the next-best alternative given up when a resource is used for one purpose; a venture should return more than this alternative to be worthwhile.

Calculated risk

A decision to proceed after weighing expected gain and loss by their probabilities, provided the worst-case loss is affordable and the expected value is positive.

Growth mindset

The belief that abilities can be developed through effort, feedback and practice; it supports persistence after failure and willingness to learn new business skills.

Self-employment

Working for oneself by owning and operating a business, receiving residual income after costs and bearing the financial risk of profit or loss.

Internal locus of control

The belief that one's own actions and decisions determine outcomes; it encourages proactive problem-solving but can lead to overconfidence when external shocks are ignored.

Need for achievement

A motive to succeed at moderately challenging tasks and to receive clear feedback on performance; high need for achievement is linked with growth-oriented ventures.

Risk tolerance

The amount of financial and personal uncertainty a person can accept; it should not exceed the capital the owner can lose without harming basic living needs.

Business opportunity

A gap between customer needs and available supply that can be served profitably; an idea becomes an opportunity only when customers will pay more than the cost to serve.

Gap analysis

A comparison of customer requirements with competitor performance; a large, important unmet requirement identifies a priority opportunity for a new or improved offer.

Value proposition

A statement of the benefit a product delivers, the customer segment it serves, and why it is better than available alternatives; it guides marketing and product design.

Feasibility test

A check that demand exists, resources can be obtained, the owner has or can acquire competence, and the venture can comply with relevant laws before launch.

Market research

The systematic collection and analysis of data about customers, competitors and the market to reduce uncertainty before business decisions are made.

Primary data

Data collected first-hand for the current business problem through surveys, interviews, observation or experiments; it is specific but often slower and more costly to obtain.

Market size

The total value or volume of sales in a defined market over a period, calculated as potential buyers multiplied by average purchase quantity and average price.

Marketing mix

The four controllable elements of product, price, place and promotion; each must be aligned with the chosen target segment and positioning for the offer to succeed.

Business plan

A written document describing the venture, market, operations, management, finances and risks; it guides action and is used to raise finance from lenders or investors.

SMART objectives

Targets that are specific, measurable, achievable, relevant and time-bound; they allow a business plan to be monitored and progress to be judged objectively.

Planning fallacy

The tendency to underestimate the time, cost and risk of a project while overestimating its benefits; it is corrected by using historical data and adding realistic buffers.

Accounting equation

Assets equal liabilities plus owner's equity; every transaction must keep this balance, so the statement of financial position always balances.

Contribution per unit

Selling price per unit minus variable cost per unit; it measures how much each sale contributes toward covering fixed costs and then generating profit.

Break-even point

The sales volume at which total revenue equals total costs, giving zero profit; it is calculated as fixed costs divided by contribution per unit.

Working capital

Current assets minus current liabilities; it represents the funds available for day-to-day operations and must be sufficient to pay short-term obligations as they fall due.

Productivity

The ratio of output to input in a production process; a rise means more output is obtained from the same resources or the same output from fewer resources.

Capacity utilisation

Actual output divided by maximum possible output, expressed as a percentage; low utilisation spreads fixed costs over fewer units and raises average cost.

Just-in-time

A production and supply method in which materials arrive as needed rather than being held in stock; it reduces holding costs but requires reliable suppliers and accurate demand forecasts.

Limited liability

A legal protection under which owners lose only the capital they invested in a company, not their personal assets, if the business cannot pay its debts.

Contract essentials

Offer, acceptance, consideration, intention to create legal relations, capacity of the parties, and legality of purpose; all are normally required for an enforceable business agreement.

Conflict of interest

A situation in which a personal interest could improperly influence a business decision; it should be disclosed promptly and managed so that objectivity is preserved.

Risk score

A measure of risk calculated by multiplying the likelihood of an event by its consequence; higher scores indicate risks that need earlier or stronger treatment.

Business resilience

The capacity of a business to absorb a shock, adapt its operations and recover; it is strengthened by cash buffers, diversified customers and suppliers, and documented procedures.

Diseconomies of scale

Rising average costs as a firm grows, caused by coordination problems, bureaucracy and communication breakdown; they can offset the cost savings gained from economies of scale.