Glossary

BUSINESS Model

Explains how a company will get started and operate. Company founders must understand the various components of their business in order to be successful. It is important to develop and understand the business model (because it can be quite different for each company).

A business model will likely evolve over time. It is dynamic because the operations of a company are dynamic, so are customers, so is the competition.

Fundamental questions to answer include:

  • Who is my customer?

  • What value can I create for them with my product or service?

  • How will I compete against other companies?

  • How will I acquire and use my resources?

  • What relationships are necessary with suppliers?

  • How will customers learn about my product?

  • Where or How will they buy my product?

  • How will I make money?

 

BUSINESS PLAN

Is a written document explaining the business model. Business plans are important today for companies seeking money (funding), either through investment or debt financing.

 

Entrepreneurship

The process by which individuals pursue opportunities without regard to resources they currently control.

 

PROTOTYPE

A quickly and inexpensively made virtual or physical representation of the product consisting of only a minimal feature set.

The purpose of the prototype is to gather feedback from potential customers before building the full product with all of the features, time, and expense.

 

Resources

The most important assets required to make the business model work.
These include:

  • People

    • Skills/Experience

  • Physical

    • Space/Location

    • Key supplies/Materials

    • Equipment

  • Financial (money to start and operate)

  • Intellectual property

    • Patents

    • Trademarks

    • Copyrights

    • Contracts to protect your original work

 

Value Proposition

Why customers buy your product or Service. Specifically, why they buy your product instead of a competitor’s product and why they feel the price you charge for the product is worth it.

For there to be value to the customer, the product must provide some benefit or solve a problem. Therefore, it provides value to the customer in exchange for money.