THE A to Z OF ENTREPRENEURSHIP

 

Encyclopedia

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Angel Investors
People who invest in you, not the magnitude of your idea. Angel investors are people who invest in your idea with more favorable terms than other lenders, as they are usually focused on helping the business succeed, rather than weighing the viability of the business. They are generally high-net-worth individuals or family members with investable capital and assets and unlike venture capitalists, they are not interested in reaping a huge profit from their investment.

Branding
The reason to choose. Branding is a blend of your promise to your customer, their expectations from your products and services, the stories and experiences you build around them, the edge you’re offering, around what you are and what you would like to be perceived as. Consistent strategic branding leads to a strong brand positioning, which adds value to your products or services. Branding is the difference between Surf and a generic washing powder.

Crowdsourcing & Crowdfunding
Diverse inputs + flexible options When you get a chunk of your work done from a large, unidentified network of people, like an online community. If it’s to generate content or products it is called crowdsourcing. If it is to generate finance, it’s called crowdfunding. Crowd testing is software testing carried out by many different testers from different places, and not by hired professionals. This is different from outsourcing, where the work is commissioned from a specific, named group.

Decentralization
The freedom of an open playground A decentralized organization structure is one where the decision-making authority on daily operations is distributed within your business. For a small business, growth often creates the need to decentralize to continue efficient operations. Decentralization encourages motivation and creativity, allows many minds to work simultaneously on the same problem, increases the sense of ownership and accommodates flexibility and individualization.

Elevator Pitch
The quickest and most compelling version of your big idea The elevator pitch is the is a 30 seconds to 3 minute sales pitch you give when you coincidentally meet someone consequential in an elevator and they ask you: “So, what do you do?”

Freemium
Free (hook) + (paid) Premium A pricing model and a way of promoting services by offering the basic features at no cost, charging a premium only for premium features and functionality. Typically this applies to digital offerings like software, mobile apps, media, games or web services and the aim is to hook customers, but limit them in a way that encourages an upgrade to premium.

Game Changer
Changing the way that something is done, thought or made. A person, organisation, idea or way of doing things that challenges and changes an existing situation, significantly.

Human Resources
The department responsible for personnel sourcing and hiring, applicant tracking, skills development and tracking, benefits administration and compliance with associated government regulations.

Incubators
Thriving in an entrepreneurial climate It’s a growth environment where ideas are helped to hatch into startup companies, through guidance and opportunity connect. The goal of an incubator is to help the entrepreneur polish the model, build some customer traction, and make the venture self-sustaining in terms of revenue, during their early months or years. It usually provides business support services and resources like affordable space, training, marketing, and funding.

Joint Venture Partnership
Multiplying the stakes and the returns. When different ventures agree to co-operate and pool in their resources and expertise to ensure mutual sharing of risks and rewards. This can help an entrepreneur significantly increase market reach and revenue as well as provide access to established markets and distribution channels.

Key Performance Indicator
A measure of your success. A business metric used to define and evaluate your company’s progress towards its goals. A good KPI is relevant, measurable and directly reflects and impacts the cash flow and/or conversions.

Limited Liability Company
The more flexible business entity. A organization form that has the flexibility and tax advantages of a partnership but protects personal assets from business debt like in a corporation, without tiresome procedures and paperwork. In an LLC, owners are usually not responsible for the firm’s debts and liabilities.

Marketing Plan
Your strategy to profitably identify, anticipate and satisfy consumer demand. A document, usually annual, that details a firm's current market position, its potential customers and a comprehensive strategy to achieve specific marketing goals within a defined timeframe.

Networking
Nurturing business relationships on a healthy diet of coffee. The act of deliberately reaching out to and develop business contacts to find sources of business, potential clients or partnerships, expanding your business base, or to gain certain requisite knowledge.

Outsourcing
Downsize to do what you do best. An arrangement in which one company provides services for another company that would usually have been provided in-house. This practice of using other businesses, rather than paid employees, for non-core activities such as accounting, data processing, payroll, information technology, advertising, etc helps to free up resources for activities in which your company has competitive advantage.

Patents
The foolproof way to secure your Intellectual Property. A patent is the most complex type of Intellectual Property right. If a copyright, trademark, or service mark is not enough for you, you can go through the painfully long and expensive patent process to ensure that you have the right to prevent others from making, selling, using, offering for sale or importing your patented invention.

Questionable Costs
These are costs that may be considered as variable or as fixed costs, depending on the situation.

Revenue Based Funding
When investors align their success with yours. An investment in which growth capital is given to you, in return for the investor being paid a small percentage of future revenues. It differs from a loan as there are no fixed payments, no set time period for repayment, and no set rate of interest.

Seed Capital
What you sow. The initial funds required to get your venture started. This generally supports hatching operation costs, for example, product development, administration and marketing.

Trademark
The distinctive mark of uniqueness Recognizable and legally protected names, symbols, sounds, buzz words or colors that distinguish your brand, goods and services . A registered trademark can protect your market share, can be used to create a franchisee, or can be sold. It can also help you raise equity for the development of your business.

User Experience Design
The comfortable and joy of interacting with your product. UX is enhancing the quality of the user’s interaction with the product by improving the usability of the interface, its ease of use, and the pleasure provided. A good UX takes into account the users’ ever-changing needs, what they value, their abilities, their limitations and continually evolves with their expectations and technologies.

Valuation
Telling them what you’re worth. Valuation is the detailed determination of the value, current and future, of a company, on which investors base their decision to invest in a company. At the early stages, it is a lot about the growth potential, as opposed to the present value. It is determined on the basis of market forces, revenues, reputation, traction etc.

Web Hosting
Your business’s rented home on the internet. When you rent space on the web from a host and are also provided all the services necessary to keep your website alive on the Internet.

X-Factor
Your ‘it’ element A unique, distinguishable and rather difficult to describe quality that makes your products and services more interesting or valuable and has significant impact on your output or perception.

Yield Curve
A measure to predict changes in economic output and growth A graph that plots the interest rates, at a defined point in time and shows the various yields that are being offered on bonds of different maturities at that time. It enables investors to instantly compare the yields offered by short-term, medium-term and long-term bonds.This yield curve is used as a measure standard for other debt in the market, such as mortgage rates or bank lending rates.

Zeal
The ability to stay in love with your idea. Entrepreneurial zeal is the obsessive driving force and the strong sense of eagerness that helps you and your venture stick it out.