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Account A record of financial transactions. Accounts Payable Money the business owes for goods, services and supplies. Accounts Receivable Money customers owe for their purchases. Accrual Accounting Records transactions when money exchanges hands such as invoices. As opposed to the cash accounting method which records the amount, only when you actually receive or spend the money. AIDA - Awareness, Interest, Desire, Action Used in advertising and sales, it as a simple 4 step formula to get customers Assets Items of value that the business own, such as, buildings, equipment, cash in the bank. Augmented Product Additional services or benefits built around the core product. Baby boom An increase in birth rate following World War 2 and until 1960.
Bad debt Money owed which will not be recovered. Balance Sheet also called the Statement of Financial Position - Is a picture of your businesses financial position. What you owe and what your assets are at a particular point of time. B2B Business to business. Benchmark A guide used to compare your business to other businesses. BHAG Big Hairy Audacious Goal. Brand The identity given to a product or company through its name, image or design. Brand Equity The value of a brand. Brand Extension A new product under an existing successful brand. Break Even Point or B.E.P. Tells you the amount of money you need each day or week or month to cover expenses. Everything above this line is profit. Budget A finance plan for the future. Business Life Cycle The development of a business over period of time from growth to maturity then to decline. This is the same for product development. Business Plan A comprehensive written statement setting out where the business is going and how it will get there. It is commonly done for one year or five year period, however, the projections could be any length of time. Capital Purchases Are big purchases Cash Cow A product or business that generates good cash but has slow growth. It may be used to fund other ventures. Cash Flow Money that comes in and out of the business. Cash Flow Statement - A report that shows the cash that comes in and goes out of a business when it happens. CEO - Chief executive Officer.
Click stream The path website visitors take. Closing When the salesperson ask the customer for an order. Comparison Advertising - Comparing one product to another. Competitive Advantage - An advantage over your rivals. Competitor Analysis Identifying competitors strengths weaknesses, etc. Cost of Goods Sold or COGS - The total of items that are directly related to the production of goods for sale. CPM - Cost Per Thousand, an advertising/marketing term. Creditors - Money you owe to suppliers. CSF - Core success factors. Culture - Shared attitudes, values and beliefs of people in a company. Debtors - Customers who owe you money. Demographics - A profile of customers like where they live, age gender occupation, etc.
Direct Marketing Personal and non personal marketing aimed at a specific group. It could be radio, mail, sales, e-mail etc. Director - One who leads the business. EBIT - Earnings before interest and taxes. 80/20 Eighty Twenty Rule or Paretos Principle - A general rule which states that twenty percent of inputs generate eighty percent of outputs. Entrepreneur - A person who starts up businesses and identifies opportunities in the market. Features vs. Benefits - Features are facts about products/services, benefits are why the customers buys the product. Such as a car might have TX 200 airbags (Feature). The benefit is the car is safer for the driver and passengers. F.D. - Finance director. Fiscal Year - A businesses financial reporting year, different to a calendar year. Floating Budget - A budget constantly reviewed and updated. Four Ps of Marketing Which stand for product, place, promotion and price. Also called the marketing mix as you can make adjustments to one of the Ps, such as raise the price and change the product and this will change the outcome. Some marketers have added more Ps over the years, such as people and persuasion, etc. Goodwill - An intangible asset which reflects the potential and reputation of a business H.R.M. or H.R. - Human Resource Management, people that hire and fire and look after employees. Innovation - New ideas and making them happen. Joint Venture or JV A mutual agreement to produce or help promote with other businesses. Just in time - A Japanese concept, used in inventory to have components delivered as needed. KISS - Keep It Simple or Keep it Simple Stupid. K.P.I.s Key Performance Indicators - Important measurements of business things to see how you are going. Ledger -A book that records transactions. Liabilities - Money that the company owes, such as loans. Liquidity - availability of cash. Margin of Safety - The amount above the line of the break even point. Marketing - Identifying and satisfying customers needs and wants profitably. Or the art of finding, developing and profiting from opportunities. Everything your company does. Marketing Mix (also called the 4 Ps of Marketing.) - It consists of Product, Place (distribution), Price, Promotion. It is like a cake mix, each P is an ingredient, and if you change the ingredient, you can change the whole cake. Market segment - Customers that have common characteristics. Market Share - A percentage of customers that choose your company. Mark Up - The difference between how much you pay for an item and how much you sell it for. MBA Masters in Business Administration A highly regarded business qualification. Media Mix - The combination of what media you would use for advertising your business, such as using newspaper, radio and television etc. Mission Statement - What a company wants to achieve, its purpose. Net Profit - Amount of profit after overheads, expenses have been deducted. Niche or Niche Market - A specific profitable gap in the market. Operating Expenses Indirect spending on things like administration and selling expenses for getting sales. Paradigm - A framework of ideas. Positioning - What separates one company from the other in the same market. Such as one company might be known to sell cheap products compared to another company who sells high end merchandise. Price Elasticity Different pricing will change the demand of the product, such as if you lower the price you may sell more items.
Profit and Loss Statement or P & L or Profit and Loss Report (Also called Income Statement or Earnings Report or Financial Performance) - Provides a financial record of what has happened in the business in the past. It shows the profit. Profit Margin - The difference between the cost of a product and how much you sell it for. Expressed as a percentage Ratios- A ratio is a relationship between two numbers. Revenues - Amounts earned for goods and services sold during a particular accounting period. R.O.A.I. Return On Advertising Investment What profit you may get back from sales, after you spent it on an advertising campaign. SBUs Strategic Business Units - An automotive company might make trucks, cars and motorbikes, so they will split into divisions called SBUs. SME - Small to medium size enterprise. Strategy Planning. Strategic planning Looking at what you can do in the future, taking into account your current situation of where you are now and what the business is capable of. SWOT Strengths, Weakness, Opportunities, Threats - Used in marketing and strategic planning to look at what can go wrong, what you are good at and what the future could hold for your business. TMS - Target market segment. Total Quality Management - A system that allows employees to reject or allow their work, depending on the quality of standard they have set. Aimed at continually improving a service or product. U.S.P. Unique Selling Proposition or Unique Selling Proposal or UBA Unique Buying Advantage - It tells the customer why you are different from every one else, a point of difference. It could be you are the quickest, slowest, biggest, smallest, cheapest, most expensive, etc. Vision - Your view of where you would like business to be.
Vision Statement - A clear statement of where the company is going.
Visual Merchandising - The layout of your shop and the way you display the products.
Zero-based budgeting - Setting fresh budgets, as if company was starting up. Zone Pricing Pricing strategy in which different geographical zones pay different prices.
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Disclaimer - The articles aim to provide general ideas. Neither the authors nor publisher shall take any responsibility for any loss or damages occasioned to any person or organisation acting or refraining from action as a result of this information. As always the advice of a competent legal solicitor, accountant or other professional advice should be sought.
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