NSSCO Entrepreneurship (6146) flashcards

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

Entrepreneur

A person who identifies a business opportunity, organises land, labour, capital and enterprise to exploit it, and bears the financial risk of the venture.

Intrapreneur

An employee who develops and implements innovative ideas inside an existing organisation, using the employer's resources, and bears little personal financial risk.

Factors of production

The four resources used to produce goods and services: land (natural resources), labour (human effort), capital (money and equipment) and enterprise (the entrepreneur's organising function).

Business idea screening

The process of testing ideas against criteria such as market demand, capital required, skills, competition, legal requirements and potential profit before committing resources.

SWOT analysis

A tool that classifies internal strengths and weaknesses against external opportunities and threats, helping a business match its capabilities to its environment.

Feasibility study

An investigation into whether a proposed business is technically, financially, legally and commercially viable, usually carried out before a full business plan is written.

Invention versus innovation

An invention is the first creation of a new product or process; innovation is the successful commercial application of that idea in the market.

First-mover advantage

The benefit gained by entering a market first, such as brand recognition, customer loyalty and patents, offset by pioneering costs and uncertainty.

Intellectual property

Legally protected creations of the mind, including patents for inventions, trademarks for brands, copyright for creative works and registered designs.

Executive summary

The opening section of a business plan that condenses the whole proposal, its purpose and funding request into a short stand-alone overview written last.

SMART objectives

Business objectives that are Specific, Measurable, Achievable, Relevant and Time-bound, allowing progress to be tracked and evaluated.

Break-even analysis

A calculation showing the sales volume at which total revenue equals total costs, so the business makes neither profit nor loss.

Primary data

Information collected first-hand for a specific research problem through surveys, interviews or observation; it is current and relevant but costly and slow to gather.

Secondary data

Information already collected and published by others, such as statistics, reports and competitor websites; it is cheap and fast but may be outdated.

Market segmentation

Dividing a heterogeneous market into smaller groups of buyers with similar needs, using demographic, geographic, psychographic or behavioural characteristics.

Marketing mix

The combination of product, price, place and promotion decisions used to meet target customer needs; services add people, process and physical evidence.

Penetration pricing

A strategy that sets a low introductory price to attract customers quickly and build market share, later raised once demand is established.

Unique selling proposition

The distinctive benefit that sets a product or brand apart from competitors and forms the central message of its marketing.

Working capital

The money available for day-to-day operations, calculated as current assets minus current liabilities; it finances stock, wages and short-term bills.

Gearing ratio

A measure of financial risk calculated as long-term debt divided by long-term debt plus equity, multiplied by one hundred to give a percentage.

Trade credit

A short-term source of finance in which a supplier allows a business to buy goods now and pay for them at a later agreed date.

Accounting equation

The fundamental rule that assets equal owner's equity plus liabilities, and that every transaction keeps this equation balanced.

Trial balance

A list of all ledger account balances used to check that total debits equal total credits; it proves arithmetical accuracy only.

Gross profit

The difference between revenue and the cost of sales, showing profit earned before operating expenses such as rent, wages and advertising are deducted.

Economies of scale

The reduction in average cost per unit achieved as output increases, through bulk buying, specialisation and spreading fixed costs over more units.

Margin of safety

The difference between actual or expected sales and break-even sales, indicating how far sales can fall before the business makes a loss.

Job production

A method of production in which each item is made individually to a customer's specific requirements, typically by skilled labour and at high unit cost.

Job description versus person specification

A job description lists the duties and responsibilities of a post; a person specification lists the qualifications, skills and qualities the ideal applicant should have.

Labour turnover

The rate at which employees leave a business, calculated as the number leaving divided by the average number employed, multiplied by one hundred.

Unlimited liability

A legal position in which the owner of a business is personally responsible for all business debts, putting personal assets at risk.

Corporate social responsibility

Voluntary business action that benefits society and the environment beyond legal requirements, often described through the triple bottom line of profit, people and planet.

Communication barriers

Factors such as noise, jargon, language differences, emotional state and poor listening that distort a message between sender and receiver.