Buying Basics
This is the process of buying the materials, supplies, or equipment a business needs to operate.
What is purchasing?
A business or person who sells supplies or services to another business is called this.
What is a vendor?
This is a step-by-step visual of how work gets done in a business.
What is a process map? What is a process flow?
This business term means the maximum amount a business can produce or serve in a certain time.
What is capacity?
This type of cost stays mostly the same each month, even if sales change.
What is a fixed cost?
When choosing what to buy, a smart entrepreneur usually compares price, quality, and this factor that affects whether items arrive on time.
What is delivery?
When both sides give up something to reach an agreement.
What is a compromise?
In a process map a diamond shape represents this in a process.
What is a decision point?
The step in a process that is slow, confusing, or wasteful.
What is a bottleneck?
This type of cost changes depending on how much a business makes or sells.
What is a variable cost?
This document lists the items a business wants to buy, how many are needed, and the expected cost.
What is a purchase order? Supply List?
Besides price, quality, lenght of contract, and quality another thing entrepreneurs may negotiate is this.
What is Delivery?
The time from when I order it to when I receive it.
What is lead time?
The amount of product or service that is delivered in a certain amount of time.
What is throughput?
Costs tied to the delivery of each product are called this.
What is direct cost?
Buying too much inventory can create this problem for a startup because money gets tied up in unsold products.
What is cash flow?
Where both sides leave the negotiation feeling like they have accomplished something.
What is a win-win negotiation?
What is a rectangle?
When a business can increase their capacity without losing effectiveness is said to be this.
What is scalable?
Ongoing costs like rent, and electricity for a business to operate not directly tied to the delivery of their product or service.
What is overhead?
A business owner choosing between the cheapest supplier and the most reliable supplier is making this kind of business decision.
What is a trade-off?
Before negotiating with a vendor, a business owner should be sure of this?
What are their priorities?
One major reason entrepreneurs map a process is to improve this by making work faster, easier, or more consistent.
What is efficiency? profitability?
The time when workers are not doing anything but still being paid.
What is idle time? downtime?
The point where revenue equals costs is called this.
What is a breakeven point? Breakeven?