business brokers
a business intermediary that brings sellers of their businesses together with potential buyers
due diligence
the process of fact finding to determine the total condition of a business being considered for purchase
independent audit
should be conducted to identify the condition of the financial statement before buying the business
tangible assets
assets owned by a business that can be seen and examined (i.e. inventory, equipment, and buildings)
intangible assets
assets that have value to a business but are not visible
goodwill
the intangible asset that allows businesses to earn a higher return than a comparable business with the same tangible assets might generate
noncompete clause
a provision often included in a contract to purchase a business that restricts the seller from entering the same type of business within a specified area for a certain amount of time
owner benefit
pretax profit + owner's salary + additional owner perks + interest + depreciation
balance sheet methods of valuation
method of determining the value of a business based on the worth of its assets
income statement methods of valuation
a method of determining the value of a business based on its profit potential
book value
what the asset originally cost
replacement value
what it would cost to buy the same materials, merchandise, or machinery today
liquidation value
how much the seller could get for this business
product life cycle
Stages that products in a marketplace pass through over time
corridor principle
the idea that opportunities become available to an entrepreneur only after the entrepreneur has started a business
product leaders
a business that creates a competitive advantage based on providing the highest-quality products possible
operational excellence
creates a competitive advantage by holding down costs to provide customers with the lowest-priced products
customer intimacy
maintaining a long-term relationship with customers through superior service that results in a competitive advantage
marketing concept
philosophy in which the wants and needs of customers are determined before goods and services are produced
production concept
philosophy that concentrates more on the product it makes than customer needs
relationship marketing
philosophy that concentrates on establishing a long-term buyer-seller relationship
marketing strategy
what the marketing efforts are intended to accomplish and how to achieve goals
sales forecast
the quantity of products a business plans to sell during a future time period
time series analysis
a forecasting method that uses historical sales data to ID patterns over a period of time
regression analysis
a forecasting method that predicts future sales by finding a relationship between sales and one or more variables
segmentation variables
characteristics or ways to group people that make them more likely to purchase a product
evoked set
the group of brands or businesses that come to a customer's mind when she thinks of a type of product