Your mind is made up, you’re starting a business! To do so, you’ll have to attend a slew of meetings and venture out onto uncharted waters. In little time, it will likely become apparent that you have new skills to learn as well as a new vocabulary specific to the entrepreneurial world, comprising business creation specialists, investors/financers, partners, service providers, etc. Luckily for most of us, terms used in entrepreneurship often stem from the English language. But for those less fluent, this can be a serious obstacle.
This first set of words should give you a clearer picture if your business project is in the conceptualization stage:
Business Model ► Every business implements one and a number of templates exist. A business model is a general overview of your project explaining how the business will create value for the customer (the offering and advantages for the customer and who the customer is, the value proposition), how it will deliver that value (distribution, communications, customer relations) and how it will capture value in return (its financial profitability). A handy tool to make the job easier: a Business Model Canvas.
Differentiation ► A strategy aiming to offer added value to customers (=value proposition) as compared to competitors. Logically enough, it is based on “segmentation-targeting-positioning” type analysis. Differentiation often stands apart by price/cost and perceived value. However, some people push differentiation to the extreme, entirely breaking away from conventional business models: this is known as innovation. What distinguishes innovation is its value proposition, whether it relates to the product/service itself or/and the targeted market, and the innovation process. The innovation process focuses on one or several other aspects of the business model (new resources, new associations, cost reduction, etc.).
Segmentation ► If you’re selling to everyone, you’re not selling anything to anyone! When drafting your business model, you will need to segment customers. A customer segment is a homogeneous group of people/companies with the same needs, who you can supply via the same distribution channel, will be receptive to the same communications, will accept to pay the same price and with whom you can have the same type of relationship. So you won’t have just “SMEs”, “seniors”, or “women”, etc. “Personas” can help you take things a step farther. You can, of course, cater to several target segments.
Niche Market ► A small market segment responding to a very specific demand. Products and services are often very differentiated and highly specialized. By definition, this market type is geared toward a small number of specific customers. Thus, it’s common for communications to be personalized and highly targeted, and competition is generally less intense than in mass markets.
B to B (or B2B) ► An abbreviation of Business to Business. If the customers in your business model are companies, you will be working in B to B. The opposite of B to B is B to C, or Business to Customer, and is a form of segmentation in which a business directly targets individual private people. Lastly, we have B to B to C, referring to business activities selling goods or services to third party companies, who then sell them to the general public, to individuals.
Market Study ► A market study is a crucial step in starting a business. When your entrepreneurial idea is ripe and you’re ready to start moving forward, a market study will give you a better grasp of your target market and allow you to size it up. More specifically, it will give you the chance to: assess the sector to reduce risks and boost your chance at success, identify the needs, preferences and traits of your customers, validate the commercial feasibility of your project, refine your concept, and redirect your various actions. We devoted an entire article to the subject.
Startup ► We could write an entire article on this one too, and many people misuse the term. It’s not because you’re a new company, because your business is hip, your employees wear sneakers to work and there’s an arcade in the coffee corner that you can call yourself a startup. Working in the digital world doesn’t do it either! Generally speaking, to qualify as a startup, a company must meet the following criteria: have great future growth potential, use new technologies, require massive funding (fundraising) to finance growth, be in a new market where risk is hard to assess, and have a replicable model (scalability). Curious to find out more, right this way!
Intrapreneurship ► A contraction of “internal” and “entrepreneurship” referring to an innovative project headed by an employee within a company, with the support and agreement of management. One difference between entrepreneurs and intrapreneurs is that the first develop a project independently with their own ideas, ambitions and personal capital, while the latter benefit from the safety and help of their company, managing a budget to see their project through.
Check out our second vocab set for the musts of navigating the entrepreneurial ecosystem, as well as a selection of useful marketing terms for any business project.
You liked this content? Share it now!