How Business Plans Work


­Corporation: An organization formed under specific state statutes in order to separate (usually financially) the organization from those running it.

Demographics: Objective population characteristics such as geographic areas, sex, age, income level, education, family size, dwelling type, and other vital statistics used for market research, and other types of sociological analyses.

Generally Accepted Accounting Standards: The accepted method of preparation for financial documents.

Mission Statement: A business's guiding principles that state what the company's goals are, what their values are, where they are headed. The mission statement defines the company's overall plan in a succinct and interesting manner with a tone reflective of the tone of the business itself.

Partnership: Two or more people associated in order to work together as co-owners of a business.

Primary Research: Specific research conducted for an individual product or service. Research you conduct yourself. Types of primary research include: surveys, focus groups, interviews, etc.

Pro forma (as in Financial Statements): A projection or an estimate of the company's financial situation if certain assumptions are met. A statement based on assumption.

Proprietorship (sole): A business owned by an individual who is liable for all of the company debts.

Psychographics: The values, attitudes, etc. of consumer populations. These include measurements such as the type of lifestyle, self-image, opinions, interests, habits, buying behaviors. Marketers make use this data to develop product promotions that will target very specific groups of people in order to get the highest return.

Secondary Research: Research data drawn from existing databases such as the U.S. Government's Census Data, data from the Department of Labor, and the Bureau of Labor Statistics, etc.

Standard Industrial Classification: [SIC] The Standard Industrial Classific system classifies establishments by their primary type of activity. This system is currently being replaced by the the North American Industry Classification System (NAICS). NAICS was developed jointly by the U.S., Canada, and Mexico to provide new comparability in statistics about business activity across North America. [Source: NAICS]

Trade Shows: A large event at which buyers and sellers gather in a large open facility. Sellers are in 10+ foot booth spaces and display their products or service offerings to potential buyers. Also known as conventions, exhibitions, and conferences.

Unique Selling Advantage: A single, unique advantage used to distinguish one product over another in marketing, sales, and other promotional activities. Typically, USAs (also known as USPs, Unique Selling Propositions) are short and catchy so they can be used in advertising slogans. Think of them as your product's "edge."