2.5 Key Terms

action plan
organized, step-by-step outline or guide that pulls together the ideas, thoughts, and key steps necessary to help set the stage for entrepreneurial success

benchmarking
comparing one’s own company’s performance with an industry average, a leader within the industry, or a market segment

bootstrapping
funding strategy that seeks to optimize use of personal funds and other creative strategies (such as bartering) to minimize cash outflows

breakeven point
level of operations that results in exactly enough revenue to cover costs

business model
plan for how venture will be funded; how the venture creates value for its stakeholders, including customers; how the venture’s offerings are made and distributed to the end users; and the how income will be generated through this process

capitalism
system in which individuals, people, and companies have the freedom to make decisions and own property as well as benefit from their own efforts, with government playing a secondary role in oversight

cash flow
money collected by the business through revenue and funding versus money disbursed by the business through expenses

cash management
management of cash inflows and outflows to support cash needs of the venture

corporate entrepreneurship
development of new ideas, opportunities, or ventures through formal research and development processes that focused on the corporation’s strategy and goals

creative destruction
theory developed by Joseph Schumpeter stating that entrepreneurial innovation is the disruptive force that creates and sustains economic growth, though in the process, it destroys established companies and disrupts employment

due diligence
conducting the necessary research and investigation to make informed decisions that minimize risk

e-commerce
electronic transactions, particularly over the Internet, for the exchange of goods and services

entrepreneurial journey
your exploration to discover if entrepreneurship is right for you

entrepreneurial process
set of decisions or actions that can be outlined and followed as a guide to developing or adjusting a venture

entrepreneurial spirit
describes a quality of those individuals who are productive self-starters focused on making changes happen

entrepreneurial venture

any business, organization, project, or operation of interest that includes a level of risk in acting on an opportunity that has not previously been established

framework
structure or outlined process that can be used to accomplish entrepreneurial goals through problem solving, idea generation and validation, and brainstorming

franchising
form of licensing that allows the business (franchisor) to share its business model to expand through various distributors (franchisees) for a fee

independent contractor
(also, freelancer) people or businesses that provide work similar to an employee without being part of the payroll for the contracting business, and who pay their own taxes and pay for their own benefits

innovation
new idea, process, or product, or a change to an existing product or process

intrapreneur

employee who acts as an entrepreneur within an organization, rather than going solo

milestone
significant decision point or significant accomplishment

patent
legal grant of protection for an inventor over the rights, usage, and commercialization of an invention for a set time period

serial entrepreneur
entrepreneur who becomes involved in starting multiple entrepreneurial ventures

situational opportunity
one that becomes available, depending on factors such as where you work, your family obligations, your idea or invention, your unique creative expression, or a recent career search or job change

soft launch
(also, soft open) launching a venture for a limited time frame or audience to gain experience, insights, and feedback about the target market or consumer

target market
specific group of consumers for which a company seeks to provide a good or service

venture
startup company or organization that conducts business or is created to satisfy a need

vertical integration
strategy of gaining control over suppliers of raw materials and distributors of finished products to expand or control the relevant supply chain