E-Myth Glossary of Terms

E-Myth \ ‘e-‚’mith\ n 1: the entrepreneurial myth: the myth that most people who start small businesses are entrepreneurs 2: the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does that technical work
Balance Sheet (51)
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.
Basic Characteristics (74)
The basic characteristics of your business as defined in your Strategic Objective, such as revenue, profits, number of employees, geographic scope, etc.
Budget (46)
A forecast of future revenues and expenses
Budget Horizon (45)
The time period covered by a budget, usually one year, presented in monthly intervals
Call to Action (52)
The implicit or explicit suggestion contained in marketing content.
Central Demographic Model (CDM) (1)
The profile of common observable characteristics of your Ideal Customer. Answers the question: "Who are my customers and where are they located?"
Central Psychographic Model (CPM) (2)
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?"
Chart of Accounts (53)
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.
Client Fulfillment (3)
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.
Demographics (37)
The objective, directly observable characteristics that describe people and organizations.
Distinguishing Characteristics (54)
Distinct features of your product or service.
Drives (4)
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?"
E-Myth Point of View (6)
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.
Emotional Associations (5)
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?"
External Perceptions (7)
Your target market's "perceived reality" of the world and what they expect from it.
Flanker Market (8)
That segment of your market that is a viable contributor to your profit base, but not the primary focus of your marketing attention.
Forecasting (55)
The process of analyzing current and historical data to determine future trends.
General Ledger (56)
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.
Gratification Mode (9)
The dominant way your ideal customers get gratification in their lives. Gratification modes include: extroverted, objective, and introverted.
Ideal Customer (10)
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.
Image and Sensory Package (11)
The "look, feel, taste, sound, and smell" of your business and your products or services. It's the way your customer experiences your business.
Inbound Business (12)
A business conducted in a fixed location, such that customers travel to you.
Income Statement (58)
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)
Innovation (71)
The ongoing process of improving how your business works.
Intangible/Unmeasurable Indicator (59)
A business performance indicators that cannot be measured objectively, such as customer satisfaction, team atmosphere, or professional service.
Key Marketing Indicators (13)
The formal benchmarks, projections, and expectations you establish to measure your marketing efforts. Example: Number of prospects contacted versus sales achieved.
Key Strategic Indicator (33)
The quantification of your company's condition compared with the key elements of your Strategic Objective.
Lead Conversion (14)
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.
Lead Generation (15)
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.
Market Segmentation (60)
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.
Marketing (16)
An essential business discipline that studies the demographics and psychographics of target customers, and the development of an appropriate and compelling Positioning Strategy.
Marketing Mix (17)
The informed strategic combination of messages, channels, and timing that targets your ideal potential customer.
Marketing Strategy (18)
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.
Measurable/Tangible Indicator (61)
A business performance indicator that can be measured objectively, such as sales, profits, growth rates, assets, efficiency, or units of production.
Orchestration (73)
Putting systems in place to make sure your business processes deliver consistent results.
Organizational Strategy (62)
This is a key system for creating the framework for achieving the strategic objective.
Outbound Business (19)
A business that is conducted at various locations, such that you travel to the customers.
Personal Objectives (40)
The specific things you want to accomplish in your life within a defined period of time.
Position Agreements (63)
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.
Positioning Statement (20)
The brief statement that expands on your Unique Selling Proposition, that further clarifies the offer you are making to your target market.
Positioning Strategy (21)
The systematic plan you have to position your business and/or your product most effectively in the minds of your target market.
Primary Aim (22)
Your written statement about yourself that expresses the essence of your life and legacy.
Primary Target Market (38)
Your most profitable market segment.
Product Attributes (64)
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.
Product Profile (65)
A description of your product or service, identifying its key attributes, as it is perceived by your customer.
Product-Market Grid (23)
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.
Product-Market Sets (39)
A market identified based on the product attributes needed and desired by that market.
Psychographics (32)
People's mental characteristics, specifically their perceptions, expectations, and conscious and unconscious decision making.
Purchase Decision Chain (24)
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.
Purchase Preference (25)
The dominant reason why customers buy and how they justify the purchases they make. Purchase preferences include: experimental, performance, and value.
Quantification (72)
Measuring the results of an innovation to determine its effectiveness.
Result Statement (66)
A written statement that tells an employee why a position exists.
Self-Perceptions (26)
How your ideal customers view their place in the world (such as personal image and values). This influences your customer's response to marketing messages that promise satisfaction and/or improvement.
Sensory Package (27)
The "look, touch, feel, smell, and taste" of your company as it relates to your business, products, and service. It's the way your customer experiences your business.
Sensory Package (67)
All the attributes of your product or service that relate to sight, smell, taste, hearing, and touch.
Source Journals (68)
A chronological list that captures the information from your source documents.
Strategic Objective (69)
The owner’s vision of the business as it must be in order to achieve his or her Primary Aim and personal objectives. It is a statement of what the business will look like when it is done.
Strategic Work (50)
Entrepreneurial work, creating the vision; establishing high-level business policies and developing strategies that shape the business. Also managerial work that achieves results through others. Includes development of specific business systems, planning, organizing, supervising, mentoring and training, setting goals and standards, budgeting; any kind of work that directs and regulates the work of others.
Tactical Work (49)
The actual hands-on work of producing and delivering your products and services; doing the administrative and support work of your business.
Tangible/Measurable Indicator (70)
A business performance indicator that can be measured objectively, such as sales, profits, growth rates, assets, efficiency, or units of production.
Target Market (also: Primary Market) (29)
That segment of your current and potential market that represents the largest contribution to your profits and is, therefore, the focus of your advertising efforts.
Target Marketing (34)
The process of identifying the customers and prospective customers who will produce the best results for your business, and then focusing your marketing activities on them.
Trading Area (30)
The geographic area within which your current or potential customers live.
  • Concentrated: A trading area that consists of customers within a reasonable travel distance such that either they can come to your location or you can travel to them. (see: Inbound and Outbound Business)
  • Dispersed: A trading area that is not necessarily restricted by location, but has a broader reach, either because of the uniqueness of your product/service or your business's ability to overcome geographic boundaries (Examples: e-commerce, catalog sales)
Unique Selling Proposition (USP) (31)
A short phrase that expresses to the customers in your target market the emotional gratification they will experience from your product or service.
Unique/Distinguishing Characteristics (75)
The characteristics of your business that will distinguish you from the competition, as defined in your Strategic Objective. These characteristics include unique product attributes, distinctive advertising messages, innovative processes for operating your business, etc.
Unmeasurable/Intangible Indicator (57)
A condition that cannot be directly quantified by standard measuring units, such as dollars, kilos, units per hour, and so on.

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