Starts with an L
The right to take possession of collateral until a debt is repaid. Example: "The bank has a ___ on my company's inventory/ If we can't repay the bank loan, the bank has the right to take possession of our inventory and sell it to pay themselves the money we owe them."
An individual that owns a company. Sole proprietors are taxed on the profits of the company, and are personally liable for any debts or judgments against the company
Sole Proprietorship
Money owed by a customer to a company. Example: "I sold the new computer system to my client for $20,000. They made an initial payment of $1,000 and now owe me $19,000, which they've promised to pay in 30 days. That $19,000 is an _____________ I trust the customer to pay this account receivable on the terms we agreed to."
Account Receivable
____ refer to the “things” the company sells. Retail stores sell many different types of _____. Service businesses can sell different services (Example: men’s haircuts, women’s hair styling, manicures, etc.)
Units
When an entrepreneur’s actions and decisions are guided by a set of beliefs about how he / she wants the business to succeed.
Mission-Driven
A complete package that supports a "Go" decision by an entrepreneur to launch a new business. A ____ ____ would include an elevator speech supporting Market Research conclusions, an organization plan (including an organizational chart and a human capital plan for attracting talented team members), a marketing and sales plan, and pro forma financial projections.
launch plan
All people or companies associated with an enterprise. Stakeholders include internal stakeholders (employees and shareholders/owners) as well as external stakeholders (customers, suppliers, community members).
Stakeholders
Money earned when something is sold. Example: the real estate agent who sells you a house is paid a 2%_____ on the value of the house sold.
Commission
Something of value. Anything owned is an asset. Assets can be something big (like a house) or something small (like a piece of jewelry). A security is a financial asset, meaning a piece of paper that represents ownership and is worth money.
Assets
When a company issues a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank. Also called "a bounced check."
Overdraft
Required forms you have to pay someone else money. Also called a debt or a loan.
Legal filings
A company that provides a good or service to another company. Example: "The beauty products distributor is my supplier -‐ I buy the hair care products I sell to my customers from my distributor."
Supplier
Funds lent to a business with an agreement that the business will repay the lender with interest.
Credit (or Debt)
A company that provides a good or service to another company. Example: "The beauty products distributor is my _______ -‐ I buy the hair care products I sell to my customers from my distributor."
Supplier
A legal agreement that an assets is part of a guarantee to a lender, when the lender can take possession of the assets and sell it to recover the funds owed by a borrower in the event the borrower is unable to make a required debt payment.
Pledged
A special type or corporation where individual owners (or "members") ae taxed on the profits of the company, but the corporation (not the member-owners) is liable for debts or judgements against the company.
Limited Liability Corporation (LLC)
All people or companies associated with an enterprise. Stakeholders include internal stakeholders (employees and shareholders/owners) as well as external stakeholders (customers, suppliers, community members).
Stakeholders
Money paid by a company to a person who owns stock in that company. Dividends are optional – many companies do not pay dividends. Dividends are typically paid every three months (which is called a “quarter,” since three months is a quarter of a year) or annually.
Dividend
Non-‐physical assets created by individuals or companies that hold the exclusive legal right to commercialize. • A copyright gives the author the sole right to benefit economically from what he/she wrote. • A patent gives the inventor the sole right to benefit commercially from his/her invention. • A trademark gives the registering individual or company the sole right to benefit from a brand or image he/she created. In each case the creator of the intellectual property has the right to benefit financially from his/her creation by selling the rights to (or “licensing”) their intellectual property to a third party.
Intellectual Property
The hard work a small business owner puts into forming, founding and operating his/her business – small business owners typically work very long hours. Sweat equity is as important as any capital but it’s not a cash investment.
Sweat Equity
Ratios a lending company calculates about an individual or a company to determine how likely they are to have the liquidity to repay debt payments that are required in a loan.
Liquidity Ratios
Companies that conduct business with another company, and that can document how well a company pays its bills to its suppliers.
Trade References
he money a person borrows to buy real estate. Example: when you buy a house you go to the bank to get a _______.
Morgage
A special account where individuals can deposit retirement funds that can grow tax-‐deferred until they withdraw them after they retire. The advantage of an IRA: there are no annual income taxes on any dividends or profitable sales that an IRA makes -‐ the money remains in the account and only gets taxed when the individual retires. If an individual withdraws money from an IRA before he/she retires they are forced to pay the IRS significant penalties for early withdrawal.
Individual Retirement Account (IRA)
Working with others to address a challenge. Individuals using their skills in harmony with others to complete a task. Effective _____involves trust among team members. Collaboration and cooperation.
Teamwork