Entrepreneur: A person who starts and runs a business and takes the risk Startup: A young company building a new product or service Business plan: Written description of a business's goals and how it will reach them Mission statement: A short statement of a company's purpose Vision statement: A description of what a company hopes to become SWOT analysis: Reviewing strengths, weaknesses, opportunities and threats Sole proprietorship: A business owned and run by one person Partnership: A business owned by two or more people Corporation: A legal entity separate from its owners LLC: Limited liability company, protecting owners' personal assets Shareholder: Owner of shares in a corporation Stock: A share of ownership in a company Dividend: A payment of company profit to shareholders Board of directors: Group elected by shareholders to oversee a company CEO: Chief executive officer, the top manager CFO: Chief financial officer Franchise: A license to run a business under a larger brand Nonprofit: An organization whose surplus goes to its mission, not owners Revenue: Money a business earns from sales Profit: Revenue minus costs Profit margin: Profit as a percent of revenue Overhead: Ongoing costs not tied directly to a product Fixed cost: A cost that stays the same regardless of output Variable cost: A cost that changes with output Break-even point: Sales level where revenue equals total costs Cash flow: Money moving in and out of a business Budget: A plan for expected income and spending Capital: Money or assets used to run or grow a business Venture capital: Investment in young companies with growth potential Angel investor: A wealthy individual who invests in startups Crowdfunding: Raising small amounts from many people Bootstrapping: Funding a business from its own revenue or savings Equity: Ownership value in a company Debt: Money owed Asset: Something of value the business owns Liability: Something the business owes Supply chain: The network moving goods from producers to customers Inventory: Goods held for sale or production Just-in-time: Receiving goods only when they are needed Outsourcing: Hiring outside firms to do work Vendor: A seller of goods or services to a business Wholesale: Selling goods in bulk to retailers Retail: Selling goods directly to consumers E-commerce: Buying and selling online Monopoly: One firm controls a market Competitive advantage: What lets a company outperform rivals Market share: A company's percent of total sales in a market Brand: The name, look and reputation of a product or company Value proposition: The promise of value a customer will get Niche: A specialized segment of a market Target market: The group of customers a business aims to serve Merger: Two companies combining into one Acquisition: One company buying another Initial public offering (IPO): First sale of stock to the public Public company: A company whose shares trade on a stock exchange Private company: A company whose shares are not publicly traded Bankruptcy: Legal process for people or firms unable to pay debts Insolvency: Inability to pay debts when due Liquidation: Selling off assets to pay debts Audit: Independent examination of financial records Compliance: Following laws and regulations Ethics: Principles of right and wrong in business conduct Corporate social responsibility: A company's duty to act for society's benefit Stakeholder: Anyone affected by or interested in a company Human resources: The function managing hiring, pay and employee matters Onboarding: Helping new employees join and learn their jobs Performance review: Evaluation of an employee's work Delegation: Assigning tasks to others Organizational chart: Diagram of who reports to whom Span of control: Number of people a manager directs Leadership: Guiding and motivating people toward goals Autocratic leadership: Leader makes decisions alone Democratic leadership: Leader involves the team in decisions Motivation: The drive to act toward a goal Productivity: Output per unit of input Efficiency: Producing results with little waste Quality control: Checking that products meet standards Lean manufacturing: Eliminating waste in production Six Sigma: A method to reduce defects and variation Kaizen: Continuous small improvements Key performance indicator (KPI): A measurable value showing progress toward a goal Return on investment (ROI): Gain from an investment relative to its cost Scalability: Ability to grow without a matching rise in cost Pivot: A major change in business strategy Minimum viable product: The simplest version of a product that tests an idea B2B: Business-to-business sales B2C: Business-to-consumer sales Contract: A legally binding agreement Invoice: A bill sent for goods or services provided Procurement: The process of buying goods or services for a business Benchmarking: Comparing performance to the best in the field Globalization: Business activity across national borders Tariff: A tax on imported goods Exchange rate: The price of one currency in another Free flashcards from Peabody at peabody.kids/flashcards/tp-business-terms