balance sheet
financial statement that summarizes a company’s financial condition according to the accounting equation

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

business model canvas
developed by Osterwalder and Pigneur, used to develop a business model for a venture, including nine blocks that are mapped out to address customer segments, customer relationships, channels, revenue streams, value propositions, key partners, key activities, key resources, and cost structure

business model innovation
occurs when an existing business fundamentally changes their business model

business plan
formal document that typically describes the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives

competitive matrix
shows how and why a startup has a clear if not measurable competitive advantage for relevant features/benefits by weight according to customers, such as price and quality in relation to competitors

customer empathy map
portrayal of a target customer, the most promising candidate from a business’ customer segments, which explores the understanding of that person’s condition from their perspective to understand their problems and needs

disruptive innovation
process that significantly impacts the market by making a product or service more affordable and/or accessible often by smaller companies in an industry

executive summary
initial section of a business plan document that summarizes the key elements of the entire plan

feasibility analysis
feasibility analysis is the process of determining if a business idea is viable; it includes testing the viability of your product or service, evaluating your management team, assessing the market for your concept, and estimating financial viability

financial analysis
forecasts revenue and expenses; projects a financial narrative; and estimates project costs, valuations, and cash flow projections

fixed costs
costs that do not change, regardless of the amount of sales

go-or-no-go decision
determination to proceed with or abandon a plan or project

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

lean model canvas

developed by Ash Maurya as a derivation of the original business model canvas; this canvas differs by addressing unfair advantages, problems, solutions, and key metrics rather than customer relationships, key partners, key activities, and key resources

market analysis
analysis of the overall interest in the product or service within the industry by its target market

projected cash flow
outline of preliminary expenses, operating expenses, and reserves

serviceable available market (SAM)
portion of the market that a business can serve based on its products, services, and location

social business model canvas
modification of the business model canvas, designed for social entrepreneurship venues; new areas address impact measures around social impacts and its measurement, surplus, beneficiary segments and social and customer value propositions

SWOT analysis
strategic analytical tool used to help a potential venture or existing company identify its strengths, weaknesses, opportunities, and threats related to business competition

total available market (TAM)
total perceived demand for a product or service within the marketplace

value proposition
summary describing the benefits (value) customers can expect from a particular product or service

value proposition canvas
one of the nine blocks on the business model canvas, this additional tool developed by Osterwalder and Pigneur is designed to illustrate a deeper dive into customer understanding and value creation of a business

variable costs
costs that fluctuate with the level of revenue

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Real world problem solving: An entrepreneurial perspective Copyright © 2022 by OpenStax is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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