E-Myth Glossary of Terms

Reveals the health and value of the business by stating the relationship between assets and liabilities and the equity (net worth) of the business. This is a “snapshot” in time and is a reflection of the moment it is produced.

The basic characteristics of your business as defined in your Strategic Objective, such as revenue, profits, number of employees, geographic scope, etc.

A forecast of future revenues and expenses

The time period covered by a budget, usually one year, presented in monthly intervals

The implicit or explicit suggestion contained in marketing content.

The profile of common observable characteristics of your Ideal Customer. Answers the question: "Who are my customers and where are they located?"

The profile of the common emotional drives and characteristics of your Ideal Customer. Answers the question: "How do my customers think and how do they make their decision to buy?"

A classification system that lists the names of all the categories you want to use to track your money, and groups them in a common format. It acts as an index for organizing financial data.

The essential business system and processes that satisfy the advertised, implied, or contracted promise made to your customer, including all production, delivery, and customer service activities.

The objective, directly observable characteristics that describe people and organizations.

Distinct features of your product or service.

The physical and emotional needs, desires, and fears that influence an action. Answers the question: "What does my product need to do to satisfy a customer's functional and emotional needs?"

Suggests that a business should be a vehicle to bring its owner more life, through the core principles of: Life, Objectivization, Working ON It - Not In It, Systemization, and Business Development.

The positive and negative associations that trigger either emotional gratification or discomfort. Answers the question: "What unconscious feelings (positive and negative) will my advertising message trigger in my customer?"

Your target market's "perceived reality" of the world and what they expect from it.

That segment of your market that is a viable contributor to your profit base, but not the primary focus of your marketing attention.

The process of analyzing current and historical data to determine future trends.

Where all the information from the source journals is entered and organized according to the categories in your chart of accounts. It's like a database that stores your financial data in an organized, accessible way.

The dominant way your ideal customers get gratification in their lives. Gratification modes include: extroverted, objective, and introverted.

The profile of the person within your trading area who is most likely to need what you are offering and most able to make a purchase.

The "look, feel, taste, sound, and smell" of your business and your products or services. It's the way your customer experiences your business.

A business conducted in a fixed location, such that customers travel to you.

Sometimes known as a Profit & Loss Statement, or P&L. Tells how the business is performing; covers a period of time in a business. (for example, week, month, quarter, year)

The ongoing process of improving how your business works.

A business performance indicators that cannot be measured objectively, such as customer satisfaction, team atmosphere, or professional service.

The formal benchmarks, projections, and expectations you establish to measure your marketing efforts. Example: Number of prospects contacted versus sales achieved.

The quantification of your company's condition compared with the key elements of your Strategic Objective.

The essence of successful selling: the conversion of potential leads into actual buyers. The set of systems you have in place to satisfy the drives and preferences of a prospect in order for them to make the decision to purchase.

The set of systems you have in place, consisting of the design, production, and placement of media messages, that generate the greatest number of potential customers.

The process of grouping your customers and prospective customers according to their common characteristics, and targeting the segments that produce the best results for your business.

An essential business discipline that studies the demographics and psychographics of target customers, and the development of an appropriate and compelling Positioning Strategy.

The informed strategic combination of messages, channels, and timing that targets your ideal potential customer.

The documented system that takes into consideration everything you know about your target market and defines your positioning, pricing structure, and the variety of messages and channels you will use to attract, convert, and maintain an ongoing stream of qualified customers.

A business performance indicator that can be measured objectively, such as sales, profits, growth rates, assets, efficiency, or units of production.

Putting systems in place to make sure your business processes deliver consistent results.

This is a key system for creating the framework for achieving the strategic objective.

A business that is conducted at various locations, such that you travel to the customers.

The specific things you want to accomplish in your life within a defined period of time.

A written agreement between a manager and an employee that makes explicit the result the employee is accountable for and the work and standards necessary to produce that result.

The brief statement that expands on your Unique Selling Proposition, that further clarifies the offer you are making to your target market.

The systematic plan you have to position your business and/or your product most effectively in the minds of your target market.

Your written statement about yourself that expresses the essence of your life and legacy.

Your most profitable market segment.

Qualities or characteristic of your product or service as perceived by your customer: Key product attributes include functionality, sensory impact, unconscious associations, conscious-mind conclusions, price/value, and access/convenience.

A description of your product or service, identifying its key attributes, as it is perceived by your customer.

A tool used to define your markets by listing your company's products along one axis and the types of customers (markets) you serve along the other axis. Each cell within the grid is called a "product-market set." The information gathered will help you analyze the potential of each market to contribute to your goals.

A market identified based on the product attributes needed and desired by that market.

People's mental characteristics, specifically their perceptions, expectations, and conscious and unconscious decision making.

The six benchmarks in the decision-making chain a customer must satisfy in order to do business with you are: awareness, purchase motivation, product acceptance, brand preference, purchase transaction, and customer satisfaction.

The dominant reason why customers buy and how they justify the purchases they make. Purchase preferences include: experimental, performance, and value.