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Entrepreneurship
MGMT 410
233
Business
Undergraduate 4
06/11/2012
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Term
†Managerial Accounting
 Definition
–Accounting methods that are specifically intended to be used by managers for planning, directing, and controlling a business.
Term
†Tax accounting
 Definition
An accounting approach based on specific accounting requirements set by governmental taxing agencies
Term
†Financial accounting
 Definition
–A formal, rule-based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators.
Term
†Business entity concept
 Definition
–The concept that a business has an existence separate from that of its owners.
Term
†Going concern concept
 Definition
–The accounting concept that a business is expected to continue in existence for the foreseeable future.
Term
†Accounting equation
 Definition
–The statement that assets equal liabilities plus owner’s equity (assets  liabilities  owners’ equity).
Term
†Asset 
 Definition
–something the business owns that will have value in the future
Term
†Liability 
 Definition
–a legal obligation to pay some amount at a time in the future. 
Term
†Owners’ equity 
 Definition
–whatever value is left after all liabilities have been paid.
Term
†Cost
 Definition
–The value given up to obtain something that you want.
Term
†Expense
 Definition
–A decrease in owners’ equity caused by consuming your product or service.
Term
†MACRS rate
 Definition
–the Modified Accelerated Cost Recovery System
–lets taxpayers depreciate more of the cost earlier
Term
†Depreciation
 Definition
–Regular and systematic reduction in income that transfers asset value to expense over time.
Term
†Financial statements
 Definition
–Formal summaries of the content of an accounting system’s records of transactions.
Term
†Five common financial statements
 Definition
–Income statement
–Statement of retained earnings
–Statement of owner’s equity
–Balance sheet
–Cash flow statement
Term
†Retained earnings
 Definition
–The sum of all profits and losses, less all dividends paid since the beginning of the business.
Term
†Articulate
 Definition
–The concept that information flows from the income statement through the statements of retained earnings and owners’ equity to the balance sheet.
Term
†Income statement 
 Definition
–A statement that lists revenues and expenses and shows the amount of profit a business makes for a specified period of time.
Term
†Balance sheet
 Definition
–A statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity).
Term
†Liquidity
 Definition
–A measure of how quickly a company can raise money through internal sources by converting assets to cash.
Term
†Financial flexibility
 Definition
–A business’s ability to manage cash flows in such a manner that the company can respond appropriately to unexpected opportunities and needs.
Term
†Financial strength
 Definition
–The ability of a business to survive adverse financial events.
Term
†Cash flow statement
 Definition
–A statement of the sources and uses of cash in a business for a specific period of time.
Term
†GAAP
 Definition
–Generally Accepted Accounting Principles are the standardized rules for accounting procedures
–used in all audits and submissions of accounting reports to the government.
Term
†Operating activities
 Definition
–Activities involved in producing and selling goods and services.
Term
†Investing activities
 Definition
–The purchase and sale of land, buildings, equipment, and securities.
Term
†Financing activities
 Definition
–Activities through which cash is obtained from and paid to lenders, owners, and investors.
Term
†External (cost) factors
 Definition
–Aspects of the world outside the business which could cause the business’s costs to change.
Term
†Internal (cost) factors
 Definition
–Aspects of or choices within the business which could cause the business’s costs to change.
Term
†Cost-volume-profit analysis
 Definition
–A managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales (volume) to maximize profits.
–Variable, fixed costs
Term
†Breakeven point
 Definition
–The point at which total costs equal gross revenue.
Term
†Budget
 Definition
–A financial plan for the future, based on a single level of operations; a quantitative expression of the use of resources necessary to achieve a business’s strategic goals.
Term
†Pro forma 
 Definition
–indicates estimated or hypothetical information
Term
†Master budget
 Definition
–A budget which consists of sets of budgets that detail all projected receipts and spending for the budgeted period.
–also referred to as a comprehensive budget
Term
†Cost of goods sold budget
 Definition
–A schedule that shows the predicted cost of product actually sold during the accounting period.
Term
†Activity-based cost estimates
 Definition
–An accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service.
Term
†Variance
 Definition
–The difference between an actual and budgeted revenue or cost
Term
†Variance analysis
 Definition
–The process of determining the effect of price and quantity changes on revenues and expenses.
Term
†Favorable/unfavorable variance
 Definition
–A label applied to variances to indicate their effect upon the income statement;
–Favorable variances would result in profits being greater than budgeted, all other things being equal;
–Unfavorable variances would result in profits being less than budgeted, all other things being equal.
Term
†Cash-to-cash cycle
 Definition
–The time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale.
–Also called operating cycle
Term
†Payables
 Definition
–Amounts owed to vendors for merchandise or services purchased on credit (see receivables).
Term
†Receivables
 Definition
–Amounts that are owed to a business for merchandise that was sold on credit (see payables).
Term
†Money
 Definition
–a medium of exchange accepted by the community or what people buy things with and sell things for.
–provides a standard for measuring value, so that the worth of different goods and services can be compared
–A store of value that can be saved for later purchases
Term

Purposes of Money

 Definition
1.To make exchanges
2.To keep track of wealth or value
Term
†Cash 
 Definition
–Money that is immediately available to be spent.
Term
†Cash equivalents 
 Definition
–Assets that may be quickly converted to cash.
Term
†Currency 
 Definition
–The bills and coins printed by governments to represent money.
Term
†Demand deposits
 Definition
–Money held in checking and savings accounts.
Term
†Marketable securities
 Definition
–Stocks and bonds that are traded on an open market.
Term
†Commercial paper
 Definition
–Notes issued by credit-worthy corporations.
Term
†Marketable securities
 Definition
–Stocks and bonds that are traded on an open market.
Term
†Commercial paper
 Definition
–Notes issued by credit-worthy corporations.
Term
†Short-term debt
 Definition
–Any debt that must be paid in less than one year from the date of the financial statement on which it is reported.
Term
†Bearer 
 Definition
–Any person or business entity who possesses a security.
Term
Cash
 Definition
1.can be obtained by selling the products and services of the business and collecting cash from customers.
–Called cash flow from operations
Term
2.can be obtained from investments the business has made, such as stocks, bonds, land, buildings, or equipment
 Definition
Term
†Company book balance
 Definition
–The sum of cash inflows and cash outflows recorded in the firm’s accounting records.
–Usually called the cash account 
Term
†Overdraft 
 Definition
–A negative balance in a depositor’s bank account.
Term
†Float 
 Definition
–Delays in the movement of money among depositors and banks.
Term
†Reconciling 
 Definition
–An accounting process that identifies the causes of all differences between book and bank balances.
Term
†Charge back
 Definition
–A reduction in the bank account of a merchant by a credit card company.
Term
†Nonsufficient funds
 Definition
–A situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal to or greater than the amount of the check.
Term
†Cash budget
 Definition
–A cash budget identifies when, how, and why cash is expected to come into the business, and when, how, and why it is expected to leave.
Term
†Cash receipts budget
 Definition
–A schedule of the amounts and timings of the receipt of cash into a business.
Term
†Cash disbursements budget
 Definition
–A schedule of the amounts and timings of payments of cash out of a business.
Term

Most common ways employees
steal cash

 Definition
1.Larceny
2.Skimming
3.Phony disbursements
Term
†Growth trap
 Definition
–A financial crisis that is caused by a business growing faster than it can be financed.
Term
†Debt 
 Definition
–A legal obligation to pay money in the future.
Term
†Equity capital
 Definition
–Money contributed to the businesses in return for part ownership of the business.
Term
†Gift 
 Definition
–Valuable assets or services donated to the business without any obligation to repay or give up any ownership interest.
Term
†Debt capital
 Definition
–Money borrowed for the purpose of investment in a business.
Term
†Outside equity
 Definition
–Money from selling part of your business to people who are not and will not be involved in the management of the business.
Term
†Partnership 
 Definition
–Two or more people cooperating to conduct a business enterprise.
Term
†Corporation 
 Definition
–A legal “artificial” entity that is formed by filing specific documents with a state government.
Term
†Limited liability company (LLC)
 Definition
–A legal form of business organization that is created by filing required documentation with a state government.
–have a choice, under federal tax law, of being taxed as either corporations or partnerships.
Term
†Limited partnership
 Definition
–A legal form of business organization that is created by filing required documentation with a state government;
–one or more partners may have no liability for the debts and actions of the partnership.
Term
†Sole proprietorship
 Definition
–A business owned by a single individual who is responsible for all debts and claims against the business.
Term
†Interest 
 Definition
–A charge for the use of money, usually figured as a percentage of the principal.
Term
Dividends
 Definition
–Payments of profits to the owners of corporations.
Term
†Risk 
 Definition
–The level of probability that an investment will not produce expected gains.
Term
†Diversify 
 Definition
–To invest in multiple investments of differing risk profiles for the purpose of reducing overall investment risk.
Term
Growth potential 
 Definition
†is a primary concern for equity investors
Term
Equity Capital from the Owner’s View
 Definition
†Financing with equity is (1) expensive and (2) guaranteed to create problems of control and decision making.
Term
Why Use Equity Capital
 Definition
1.You will reduce your own exposure to financial loss
2.Your business will not have increased costs in the form of interest
3.Bringing outside investors into an existing business can often reenergize it by providing new ideas, procedures, and processes
Term
Financing with Debt: Getting a Loan for Your Business
 Definition
1.Direct loans of cash
2.Guaranteeing loans made by commercial banks
3.Reducing taxes by allowing interest to be deducted
Term
†Community development organization
 Definition
An organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specific geographic area
Term
†Small business investment companies
 Definition
–Private businesses that are authorized to make SBA insured loans to start-ups and small businesses.
Term
†Accelerator 
 Definition
–An organization that supports startup technology businesses by providing inexpensive office space, a variety of support services, and resources
–most are associated with universities.
Term
†Credit reporting agency
 Definition
–A business that collects, collates, and reports information concerning an entity’s use of debt.
Term
†Fair Credit Reporting Act
 Definition
–U.S. federal legislation specifying consumers’ rights vis à vis creditreporting agencies.
Term
†Collateral 
 Definition
–Something of value given or pledged as security for payment of a loan
–may consist of financial instruments, such as stocks, bonds, and negotiable paper, or of physical goods, such as trucks, machinery, land, or buildings.
Term
†Tax abatement
 Definition
–A legal reduction in taxes by a  government.
Term
†Grants
 Definition
–Gifts of money made to a business for a specific purpose.
Term
†Tax credits
 Definition
–Direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria.
Term
†Economic development agency
 Definition
–A government organization that works to increase economic activity in the form of job opportunities within a specific geographic area.
Term
†Foundation 
 Definition
–An institution to which private wealth is contributed and from which private wealth is distributed for public purposes.
Term
†Cost of capital
 Definition
–The percentage cost of obtaining future funds.
Term
†Weighted average cost of capital (WAC)
 Definition
–The expected average future cost of funds.
Term
†Financial leverage
 Definition
–A measure of the amount of debt relative to total investment.
Term
†Optimum capital structure
 Definition
–The ratio of debt to equity that provides the maximum level of profits.
Term
†Accredited investors
 Definition
–The SEC’s term for individuals with a net worth greater than $1 million or a personal annual income of at least $200,000 in each of the two most recent years
–who are therefore qualified to make private equity investments in businesses.
Term
†Environment 
 Definition
–The sum total of forces outside of the entrepreneur and the firm.
Term
†Identity
 Definition
–composed of the name, description, and distinctive elements of a firm, such as trademarks, uniforms, logos, characters and stories
–part of the BRIE model
Term
†Bootstrapping
 Definition
–Using low-cost or free techniques to minimize your cost of doing business
Term
†Internal environment 
 Definition
–consists of those people inside the boundary
–owner, employees, board members
Term
†Organizational culture 
 Definition
–set of shared beliefs that demonstrate how things get done
Term
†External environment 
 Definition
–everything outside of the firm’s boundary
–Task, general 
Term
†Task environment 
 Definition
–the components that directly relate to your firm performing its basic business tasks
–Customers, suppliers, distributors, corporate partners, competitors, government
Term
†General environment
 Definition
–A part of the external environment made up of sectors of major forces that shape the people and institutions of the task and internal environments, such as the economic sector or the demographic sector
Term
†External relations
 Definition
–The general description for the processes and skills used in the management of a firm’s interactions with people, organizations and institutions outside of its boundary.
Term
Skills for Managing Relations
with the Environment
 Definition
†Building legitimacy
†Developing a social network
†Handling a crisis
†Achieving sustainability
†Making ethical decisions
Term
†Social capital
 Definition
–characteristics of a business, like trust, consistency, and networks, that represent potential social obligations which are an asset of the firm or entrepreneur
Term
†Legitimacy
 Definition
–the belief that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors
–Based on people, product, or organization
Term
†Social network
 Definition
–the entrepreneur’s set of relationships and contacts with individuals and institutions
–way to work trust, reciprocity, and long-term relationships into your day-to-day business operations.
Term
†††Mutuality
 Definition
–The action of each person helping another.
Term
†Networking
 Definition
–Interacting with others in order to build relationships useful to a business.
Term
†Sustainable entrepreneurship 
 Definition
–identifies or creates and then exploits opportunities to make a profit in a manner that minimizes the depletion of natural resources, maximizes the use of recycled material, improves the environment, or any combination of these outcomes
–Green entrepreneurship
Term
†Ethics
 Definition
–a system of values that people consider in determining whether actions are right or wrong
Term
†Ethical Dilemma
 Definition
–a situation that occurs when a person’s values are in conflict, making it unclear whether a decision is the right thing to do
Term
†Golden Rule
 Definition
–treat others in the manner you wish to be treated.
Term
†Utilitarianism
 Definition
–seeking the greatest good for the greatest number of people.
Term
†Universalism
 Definition
–there is a code of right and wrong that everyone can see and follow.
Term
†Billboard principle
 Definition
–asks whether someone would be comfortable having his decision and name advertised on a billboard for the public to see.
Term
†Hourly fees
 Definition
–A basis for legal charges in which the rate is based on a price per hour.
–Often lawyers will charge for fractions of an hour.
Term
†Flat fees
 Definition
–A method of billing for lawyers in which a fixed amount is paid for a certain task.
Term
†Retainer 
 Definition
–A fee paid by a client to an attorney to engage the attorney’s services.
Term
†Contingency fee
 Definition
–Fee paid by a client to an attorney for legal services that is dependent upon the outcome of a case.
Term

Three elements to most aspects of business law:

 Definition
1.Finding the right information,
2.Negotiating the specific outcome you want
3.Taking care of the paperwork associated with it
Term
†Legal entity
 Definition
–A being, human or nonhuman, such as a corporation, that is recognized as having rights and duties, such as the right to own property.
Term
†Articles of organization
 Definition
–Document setting forth information about a limited liability company that is filed with the state to establish an LLC.
Term
†Articles of partnership
 Definition
–Agreement between the partners of a firm on matters pertaining to the formation and operation of the partnership.
Term
†Single taxation
 Definition
–Earnings of the business are taxed once with the owners paying the taxes.
Term
†Double taxation
 Definition
–Earnings of the business are taxed twice with the business as well as its owners being subject to tax.
Term
†Pass through (taxation)
 Definition
–Earnings of the business are distributed to the business owners and those owners pay individual tax on the earnings.
Term
†Check the box taxation
 Definition
–A choice LLCs can make on their tax returns to be taxed as a corporation or a partnership.
Term
†Piercing the veil
 Definition
–The dissolution of a corporate form, making it back into a sole proprietorship or general partnership, if the court finds that the owner carelessly mixed up personal and business assets or finances.
Term
†Vicarious (indirect) liability
 Definition
Indirect liability or responsibility for the actions of another
Term
†Independent contractors
 Definition
–Persons working to achieve a certain goal without being subjected to substantial controls by another.
Term
†Sarbanes-Oxley Act
 Definition
–A federal law describing the steps publicly traded businesses must take to protect and provide their key financial information.
Term
†Litigation 
 Definition
A formal dispute resolution method that operates using the court system, typically with a lawyer representing each party
Term
†Arbitration 
 Definition
–A dispute resolution process held instead of court cases in which both sides present their case to a legal professional.
Term
†Mediation
 Definition
–the dispute is put to a neutral third party who is not a judge.
Term
†Contracts
 Definition
–agreements in which the parties exchange promises
Term
†Standard contracts
 Definition
–company can just fill in the blanks as needed
Term
†Specialty contracts
 Definition
–unique contract terms, large dollar amounts at stake
Term
†Noncompete clause
 Definition
–Part of a contract in which a person agrees not to open a certain type of business or seek employment doing certain things in a particular area for a period of time.
Term
†Exculpatory clause
 Definition
–Part of a contract in which a party to the contract states that he or she will not be responsible for certain actions.
Term
†Hold harmless
 Definition
–A type of waiver in which a party agrees not to hold another party responsible for certain events.
Term
Waiver
 Definition
–Part of a contract in which a party intentionally gives up legal rights or claims.
Term
†Subcontract 
 Definition
–A contract by which a new party agrees to perform a duty that one of the original parties to a contract was already legally obligated to perform.
Term
†Intellectual  property
 Definition
–Property coming from some sort of original thought; for example, patents, trade secrets, trademarks, and copyrights.
Term
†Intangible property
 Definition
Property that has no value of its own but that represents value, such as a stock certificate
Term
†Patent 
 Definition
–A grant by the U.S. government to an inventor for an idea that is new, useful, and non-obvious, giving the inventor the exclusive right to make, use, or sell his idea
Term
†Trade secret
 Definition
–Confidential information within a company that gives that company a competitive advantage
Term
Copyright
 Definition
–Exclusive right given to the creator of a literary or artistic work to make use of that work.
Term
†Trademark 
 Definition
–Distinctive word, slogan, or image that identifies a product and its origin.
Term
†Design patent
 Definition
–A 14-year patent for a new, original, and ornamental design for an article of manufacture.
Term
†Infringer 
 Definition
–Someone who uses intellectual property without the permission of the owner.
Term
†Employee fit
 Definition
–the match between the needs, expectations, and culture of the small business with the expectations and the skills of the individual employee
Term
†Internet recruiting
 Definition
–Method of recruiting that allows you to search a résumé database or post a job description to the Web;
–a small business owner who knows exactly what he or she wants can use filters to search vast numbers of résumés with pinpoint accuracy.
Term
†Employee referral
 Definition
–An underused, low-cost method for finding workers that rewards your employees for recommending potential candidates that would be a great employee fit.
Term
†Virtual employees
 Definition
–Independent contractors who provide specialized business services or support from a distance, through the Internet, telephone, fax, or another method of communication.  (i.e. Task Rabbit)
Term
†Psychological contract
 Definition
–Refers to employees’ beliefs about the promises between the employee and the firm
–Beliefs are based on the perception that promises have been made in exchange for certain employee obligations
Term
†Open-book policy
 Definition
–Concept that key employees should be able to see and understand a firm’s financials
–should have a part in moving the numbers in the right direction
–should have a direct stake in the strategy and success of the firm.
Term
†Nepotism 
 Definition
–A management philosophy of selecting and promoting people based on family ties.
Term
†Meritocracy 
 Definition
–A management philosophy of selecting and promoting people based solely on their being the most capable person for the job.
Term
†Classic profile
 Definition
–Loner, socially isolated
–Hard worker
–Fast learner
–Risk-taker seeking wealth
Term
†Competencies
 Definition
–forms of business-related expertise
Term
†Basic business competency
 Definition
–understanding the organizational and business processes of a firm
Term
†Key business functions
 Definition
–activities common to all businesses
–sales, operations, accounting, finance, and human resources
Term
†Industry-specific knowledge
 Definition
–activities, skills, and knowledge, specific to businesses in an industry
Term
†Resource competencies
 Definition
–the ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business
–Time, information, location, financing, raw materials, expertise
Term
†Determination competencies
 Definition
–skill identified with the energy and focus needed to bring a business into existence
Term
†Opportunity competencies
 Definition
–skills necessary to identify and exploit elements of the business environment that can lead to a profitable and sustainable business
Term
†Professionalization
 Definition
–the extent to which a firm meets or exceeds the standard business practices for its industry
–Expert, specialized, minimalized
Term
†Standard business practice
 Definition
–a business action that has been widely adopted within an industry or occupation
Term
Expert businesses
 Definition
–those which you notice everything seems to be done in the best way possible
–firm has exceeded the standard business practices of the industry
Term
†Specialized
 Definition
–founders or owners are passionate about one or two of the key business functions,
–Satisfied if other activities are no worse than other firms in the market
Term
†Minimalized
 Definition
–Entrepreneur figures that “good enough” is all that is necessary to keep the business going
–No systematic accounting
–Little recordkeeping
Term
†Habitual entrepreneurs
 Definition
–owners for a lifetime, sometimes in one business, sometimes across several firms
–No succession plan
–Figure to keep working until they can no longer continue
Term
†Growth entrepreneurs
 Definition
–lifetime owners whose goal is major success
–If they top out with one business, they’ll start another growth-oriented company, 
Term
†Harvest entrepreneurs
 Definition
–Owners with an exit plan
–Work first in order to play later
–Build one company at a time, sell it, enjoy the proceeds, and then start another
Term
†Harvest entrepreneurs
 Definition
–Owners with an exit plan
–Work first in order to play later
–Build one company at a time, sell it, enjoy the proceeds, and then start another
Term
†Spiral (helical) entrepreneurs
 Definition
–Alternate periods of growth and stability which are driven by personal or family needs
–Driven by a need to balance family and business
–The endgame strategy is scaling down the business
Term
†Occasional entrepreneurs
 Definition
–people who generally have another primary job
–Classic part-time entrepreneur
–Seasonal basis (doing taxes, or making Christmas wreaths)
Term
†Family business
 Definition
–a firm in which one family owns a majority stake and is involved in the daily management of the business
†1/3 of the Standard & Poor’s 500 are family owned and managed
Term
†Role conflict
 Definition
–the kind of problem that arises when people have multiple responsibilities, such as parent and boss, and the different responsibilities make different demands on them
–Whenever possible, make decisions based on business necessities.
Term
†Time management 
 Definition
–organizing process to help make the most efficient use of the day
–List, 123 Prioritize, Delegate, Repeat, Strategize
Term
†Succession
 Definition
–the process of intergenerational transfer of a business
–Lack of clear transition plan is the death knell
Term
†Set asides
 Definition
–government contracting funds earmarked for particular kinds of firms, such as minority- or women-owned firms
Term
Certification
 Definition
–an examination base acknowledgement that the firm is owned and operated as specified
Term
†Late career entrepreneurs
 Definition
–people who begin their businesses after having retired or resigned from work in corporations at age 50 or older
Term
†Business life cycle
 Definition
–The sequence or pattern of developmental stages any business goes through during its life span.
Term
†Liability of newness
 Definition
–The set of risks faced by firms early in their life cycles that comes from a lack of knowledge by the owners about the business they are in and by customers about the new business.
Term
†Slack resources
 Definition
–Profits that are available to be used to satisfy the preferences of the owner in how the business is run.
Term
†Lifestyle or part-time firm
 Definition
–A small business primarily intended to provide partial or subsistence financial support for the existing lifestyle of the owner, most often through operations that fit the owner’s schedule and way of working.
Term
†Traditional small business
 Definition
–A firm intended to provide a living income to the owner, and operating in a manner and on a schedule consistent with other firms in the industry and market.
Term
†High-performing small business
 Definition
–A firm intended to provide the owner with a high income through sales or profits superior to those of the traditional small business.
Term
†High-growth venture
 Definition
–A firm started with the intent of eventually going public, following the pattern of growth and operations of a big business.
Term
†Harvest 
 Definition
–Recover value through a sale of a firm or its assets.
Term
†Initial public offering (IPO)
 Definition
–Transfer method describing the first-time public sale of a stock listed on a public stock exchange.
Term
†Consolidation 
 Definition
–A transfer method in which a small business is bought by a larger firm for the purpose of quickly growing the larger firm.
Term
†Employee stock ownership plan
 Definition
–A formalized legal method to transfer some or all of the ownership of a business to its employees.
Term
†Transfer 
 Definition
–An endgame strategy in which ownership is moved from one person or group to another.
Term
†Termination 
 Definition
–An endgame strategy in which the owner closes down a business
Term
†Liquidity enhancement
 Definition
–An estate planning strategy which focuses on generating cash to cover likely estate taxes.
Term
†Tax management
 Definition
–An estate planning strategy which focuses on minimizing estate tax payments.
Term
††Estate freeze
 Definition
–An estate planning strategy which focuses on transferring assets to heirs when the asset costs are low.
Term
†Walkaways 
 Definition
–Business terminations in which the entrepreneur ends the business with its obligations met.
Term
†Bankruptcy 
 Definition
–An extreme form of business termination which uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets.
Term
†Workout 
 Definition
–A form of business termination in which the firm’s legal or financial obligations are not fully met at closing.
Term
†Reorganization 
 Definition
–The popular name for a Chapter 13 bankruptcy in which a bankrupt firm continues to operate while paying off debts identified by the bankruptcy trustee
Term
†Liquidation 
 Definition
–The popular name for a Chapter 7 bankruptcy in which a bankrupt firm’s assets are sold by the bankruptcy trustee and the proceeds used to pay the firm’s debts.
Term
†Supplemental profits
 Definition
–Returns above costs intended as a secondary income for entrepreneurs (where self-employment is secondary to their main job).
Term
†Substitution profits
 Definition
Returns intended to equal and replace the salary or wages the entrepreneur could draw working for someone else
Term
†Success profits
 Definition
–Returns at levels higher than the entrepreneur could make working for others.
Term
†Volatility
 Definition
–frequency of business starts and stops
Term
†Cost to start-up 
 Definition
–The amount of money it takes to start a new business.
Term
†Time to start-up
 Definition
–How long it takes to start a new business.
Term
†Permanence
 Definition
–The impression of long-term continuity a business gives others.
Term
†Zoning laws
 Definition
–Government specifications for acceptable use of land and buildings in particular areas.
Term
†Covenants
 Definition
–The limitations imposed on your property by your neighborhood group.
Term
†Variance
 Definition
–Permission from a government organization to act differently that the laws state.
Term
†E-commerce
 Definition
–The use of the Internet to conduct business transactions.
Term
†Informational Web sites
 Definition
–An Internet site designed to introduce and explain a business to others.
Term
†Search engine optimization
 Definition
–A general approach to Web site design intended to result in the site being displayed toward the beginning of a search engine’s (e.g., Google, Yahoo!, etc.) listing for that term.
Term
†Sponsored link
 Definition
–A form of paid advertising that gets your company’s Web site at the top of a search list.
Term
†Network marketing
 Definition
–An approach to selling in which the salesperson recruits customers to become distributors of the product or service to others.
Term
†Stand retail
 Definition
–one of the most ancient forms of business
†Mentioned in the Bible
†Tend to be semi-permanent
Term
†Bootstrapping
 Definition
–using low-cost or free techniques to minimize your cost of doing business
Term
†Undercapitalization
 Definition
–not having enough money available to the business to cover shortfalls in sales or profits
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