NSSCO Entrepreneurship (6146) key terms

A person who spots a gap in the market, gathers the money, people and materials needed, takes on the risk of loss, and organises a venture to supply goods or services for profit.

The process of turning an idea into a working venture: identifying an opportunity, planning, raising resources, producing, selling and accepting the possibility of failure in return for reward.

An employee inside an existing organisation who is allowed to develop new products, services or ways of working using the employer's resources, and who is rewarded for successful innovation.

A first thought about a product or service that could be sold. It only becomes a real opportunity after checking whether customers want it and whether it can be supplied profitably.

A need or want in the market that a venture can meet with the resources it can obtain, at a price customers will pay, while still making a surplus over costs.

A demand that existing suppliers do not serve, for example because they are absent from an area, sell only to certain customers, or offer a product that does not fully meet buyers' needs.

A planning tool that lists a venture's internal strengths and weaknesses alongside external opportunities and threats, so that decisions are based on both what the business controls and what happens around it.

An investigation carried out before starting or expanding a venture that tests whether the idea is technically possible, whether customers exist, and whether the money needed can be recovered.

Putting a new or improved product, service, process or way of organising work into practical use, so that it creates value for customers and the business rather than remaining only an idea.

The creation of something that did not exist before, such as a device or a method. It becomes commercial only when someone finds a market for it and produces it at a workable cost.

A written document that describes a proposed or existing venture, its owners, its market, its operating arrangements, and its expected income, costs and cash flows over a stated period.

The short opening section of a business plan that states what the venture will do, who it will serve, how much money is needed and what result is expected, so a busy reader grasps the case quickly.

The organised collection and analysis of information about customers, competitors, prices and market conditions, used to reduce the uncertainty of business decisions.

Information gathered first-hand for the specific question at hand, for example through interviews, observation or questionnaires completed by the people being studied.

Information that already exists because someone else collected it, such as official statistics, published reports, trade magazines or company records, and which is usually cheaper but may be dated or unsuitable.

A written set of questions used to collect information from many respondents in the same way, which must be worded clearly and ordered carefully to avoid misleading answers.

Dividing a whole market into groups of buyers with similar needs or characteristics, such as by age, income, location or buying habits, so that a product and message can be aimed at one group.

The specific group of customers whose needs a venture chooses to serve, and whose size, spending power and buying behaviour guide decisions about product, price, place and promotion.

The set of controllable decisions a business combines to win customers, commonly summarised as product, price, place and promotion, and extended in service settings with people, process and physical evidence.

The activities used to inform potential customers about a product and persuade them to buy, including advertising, personal selling, sales promotions, publicity and public relations.

Paid, non-personal communication about a product or business, placed through media such as radio, newspapers, posters, social media or text messages, intended to reach a chosen audience.

The route a product follows from producer to final consumer, for example direct selling, or moving through wholesalers and retailers, each of which adds cost and performs a service.

The level of sales at which total revenue exactly covers total costs, so the business makes neither profit nor loss. It is found by dividing fixed costs by contribution per unit.

Expenses that stay much the same in total whatever quantity is produced or sold in a period, such as rent, insurance, licences and salaries of permanent staff.

Expenses that rise and fall in total as output or sales change, such as raw materials, packaging, sales commission and the fuel used for deliveries.

The amount left from the selling price of one unit after its variable costs are subtracted. It contributes towards paying fixed costs and, once those are covered, towards profit.

A table showing the expected cash received and cash paid out month by month, together with the opening and closing balance, used to predict periods when the business will be short of money.

The money tied up in day-to-day operations, calculated as current assets such as stock and money owed by customers minus current liabilities, and needed to keep trading smoothly.

A financial report for a period that shows sales revenue, the cost of the goods sold, other expenses, and the resulting profit or loss, helping owners judge whether trading is worthwhile.

Sales revenue minus the direct cost of the goods or services sold, before deducting overheads such as rent, administration and advertising. It measures the margin earned on trading itself.

A statement at a particular date listing what a business owns, what it owes and the owner's stake, showing that assets equal liabilities plus capital.

An arrangement in which goods, services or money are supplied now and paid for later. It helps sales and purchases but creates money owed, which must be managed so it does not drain cash.

The system for deciding how much raw material and finished goods to hold, recording movements, and reordering at the right time so that selling is not interrupted and money is not tied up unnecessarily.

The process of transforming inputs such as materials, labour, equipment and information into finished goods or services that customers are willing to pay for.

A measure of how much output is obtained from the inputs used, for example units produced per worker per day. Rising productivity lowers unit cost and improves competitiveness.

The checks and procedures used to make sure goods or services meet a stated standard, such as inspecting materials, testing samples and correcting faults before customers receive the output.

A legally enforceable agreement between two or more parties in which each accepts obligations, such as one supplying goods and the other paying an agreed price.

A legal right granted for an invention that is new and useful, giving the holder the exclusive right to use or license it for a limited period in return for public disclosure.

The standards of honest and fair conduct a business applies in dealing with customers, workers, suppliers and the community, going beyond what the law strictly requires.

A business's voluntary commitment to consider the effects of its activities on employees, customers, the local community and the environment, and to act on those effects.

Describing a practice that can continue over the long term without using up resources or causing harm faster than they can be replaced or absorbed.

The exchange of information within a business and between the business and outsiders, through spoken, written and electronic channels, which must be clear and suited to the audience.

A formal written message to a customer, supplier, bank or official body, following a conventional layout with sender and recipient details, date, a clear subject and a courteous close.

The use of computers, mobile devices, networks and software to store, process and share information, which can speed up records, communication and marketing but brings new risks.

The process of identifying what could go wrong in a venture, judging how likely and how serious each risk is, and deciding how to avoid, reduce, transfer or accept it.

A contract in which a business pays regular premiums to an insurer, which then covers specified losses such as fire, theft or injury, spreading the cost of unlikely but severe events.

The rules and practices a business follows to collect personal information fairly, keep it accurate and secure, use it only for stated purposes, and prevent unauthorised access or disclosure.