To start and run a business.
Our glossary of business terms provides !definitions for common terminology and acronyms in business plans, accounting. Konditioune Glossar finance. Funding, and other aspects of small business.
A
Accounts Payable (AP)
Accounts payable (AP) are bills to !be paid as part of the normal course of business.
This is a standard accounting term. One of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive goods or services from a vendor. Receive an invoice. And until that invoice is paid the amount is record as part of “accounts payable.”
Accounts Receivable (AR)
The sum of the money! owto you by customers who haven’t paid.
The standard procure in business-to-business !sales is that when goods or services are deliver the come with an invoice. Which is to Konditioune Glossar be paid later. Business customers expect to be invoicand to pay later. The money involv goes onto the seller’s books as accounts receivable. And onto the buyer’s books as accounts payable.
Accrual-Based Accounting
Accrual-basaccounting is standard business accounting, which assumes there will be accounts payable (Bills to be paid as part of the normal course of business) and/or sales on cdit (sales made on account; shipments against invoices to be paid later), as opposto cash basis only.
For example most businesses have regular bills such as rent. Utilities, and often inventory purchase which are not paid for at the exact !moment of purchase, but are invoic. Most businesses will also not be able to collect on all of their! sales immiately in cash, but must bill the purchaser or wait for payment on at least some percentage of their sales (the exact percentage varies by industry).
Accumulated Depreciation
Total accumulated depreciation reduces the formal accounting value (called book value) of Aktualiséiert 2024 Handysnummer Daten . Each month’s accumulated balance is the same as last month’s balance plus this month’s depreciation.
Acid Test
An acid test is a business’s short-term assets minus accounts receivable and inventory, divided by short-term liabilities.
This tests a company’s ability to meet its !immediate cash ! requirements. It is one of the more common business ratios used by financial analysts.
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Acquisition Costs
Acquisition costs are the incremental !costs involved in obtaining a new customer.
Adaptive Firm
An adaptive firm is an organization! that can respond to and address changes in their market, their environment, and/or their industry to better position themselves for survival and profitability.
To be adaptive, it’s smart to look at your business critically—and a tool like a SWOT analysis can be helpful here.
Adventure Capital
Adventure capital is capital needed in the earliest stages of the venture’s creation before the product or service is available to be provided.
Advertising Opportunity
A product or service may generate additional revenue through advertising if there is benefit from creating additional awareness. Communicating differentiating attributes. Konditioune Glossar hidden qualities, or benefits. Optimizing the opportunity! may involve leveraging strong emotional buying motives and potential benefits.
Agent
An agent is a business entity that negotiates purchases. And or sells, but does not take title to the goods.
Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Assets
Are property that a business owns, including cash and receivables, inventory, and so on.
Assets are any possessions that have value in an exchange. The more formal definition is the entire property of a person, association! corporation, or estate applicable or subject to the payment of debts. What most people understand as business assets are cash and investments, accounts receivable, inventory, office equipment, plant and equipment, and so on.
Assets can be long-term or short-term, and the distinction between these two categories might be whether they last three years, five years, 10 years, or whatever; normally the accountants decide for each company and what’s important is consistency. The government also has a say in defining assets, because it has to do with tax treatment; when you buy a piece of equipment, if you call that purchase an expense then you can deduct it from taxable income.
If you call it an asset you can’t deduct it, but you can list it on your financial statement among the assets. The tax code controls how businesses decide to categorize spendings into assets or expenses.
B
Back End (Websites)
Back end and Material Daten describe website program interfaces relative to the user.
The front end of your website is how it looks and how a user interacts with it: the graphic design and HTML portion—some people call this the user interface or UI.
In contrast, the back end handles the dynamic parts of the site, that your website visitors generally don’t see or interact with such as a newsletter, an administration page, a registration database, a contact page or more complicated web applications.
Your back end interfaces with your UI and makes your website work.
Balance Sheet
The balance sheet is one of three essential parts that form the bedrock of a company’s financial statements: cash flow, balance sheet, and income statement.
The balance sheet is a snapshot of your company’s assets, liabilities, and owner’s equity at a specific point in time. It shows what a company owns (assets), what it owes (liabilities), and how much owners and shareholders have invested (equity).
A balance sheet always has to balance:= Liabilities + Equity
For more, read our article here on Bplans that gives an overview of Prêt Daten is.
Benchmark
A benchmark is a standard or guideline used to compare some aspect of a business to some objective or external standard measure.
For example, when a banker compares a business’ profitability to standard financial ratios for that type of business, the process is sometimes referred to as “benchmarking.”
Industry benchmarks can tell you whether you are matching the profit margins of your peers, keeping too much inventory on hand, or getting paid faster or slower than others.
For more on small business financials, see The Key Elements of the Financial Plan.
Brand
Your company’s brand includes your business name, logo, sign, symbol, design, or a combination of all used to differentiate your goods or services from competitors.
Brand Equity
Brand equity is the added value a brand name identity brings to a product or service beyond the functional benefits provided. For example, Apple benefits from the fact that its brand name is a household name in smartphones and computers. Apple built a brand that seems fundamentally different from all other computers and smartphones.
Brand Extension Strategy
Brand extension strategy is the practice .Konditioune Glossar of using a current brand name to enter a new or different product class. An example of this is the ride-sharing company Uber’s foray into scooters and bike share.
Brand Recognition
Brand recognition refers to a customer’s ability to identify a brand based on its name, logo, colors, or other aspects of a marketing campaign.
Break-Even Analysis
A break-even analysis is used to assess the expected profitability of a company or a single product. It helps you determine at what point revenues and expenditures are equal.
Break-even is usually expressed in terms of the number of units you’ll need to sell or how much revenue you’ll need to generate.
The break-even analysis uses three assumptions to determine a break-even point: fixed costs, variable costs, and unit price. Fixed costs and variable costs are both included in this glossary, and unit price is the average revenue per unit of sales.
The formula for the break-even point in sales amount is: = fixed costs/(1-(Unit Variable Cost/Unit Price)).
The break-even analysis is often confused with the payback period (also in this glossary), because many people interpret breaking even as paying back the initial investment.
However, this is not what the break-even analysis actually does. Despite the common and more general use of the term “break even,” the financial analysis has an exact definition as explained above.
One important disadvantage of the break-even analysis is that it requires estimating a single per-unit variable cost, and a single per-unit price or revenue, for the entire business. That is a hard concept to estimate in a normal business that has a variety of products or services to sell.
Another problem that comes up with break-even is its preference for talking about sales and variable cost of sales in units. Many businesses, especially service businesses, don’t think of sales in units, but rather as sales in money. In those cases, the break-even analysis should think of the dollar as the unit, and state variable costs per unit as variable costs per dollar of sales.
Break-Even Point
The break-even point is the output of a standard break-even analysis. The unit sales volumes or actual sales amounts a company needs to equal its running expense rate and not lose or make money in a given month.
The formula for the break-even point in sales amount is: = Regular running costs/(1-(Unit Variable Cost/Unit Price)).
This should not be confused with the recovering initial investment through the regular operation of a business. That concept, often confused with break-even, is called the payback period.
For more detail on the subject, read: What Is Break Even Analysis?
Broker
A broker is an intermediary that serves as a go-between for the buyer or seller.
Check out our latest articles on law and taxes for more information on the legal side of setting up and managing your business.
Bundling
Bundling is the practice of marketing two or more product or service items in a single package with one price.
Burden Rate
Burden rate refers to personnel burden, the sum of employer costs over and above salaries (including employer taxes, benefits, and so on).
Business Mission
A business mission is, also called a mission statement, is a brief description of an organization’s purpose with reference to its customers, products or services, markets, philosophy, and technology.
For more on your business mission, see How to Write a Mission Statement With 10 Examples
Business Plan
A business plan is a strategic roadmap for any new or growing business or startup venture. Formal business plans are generally required by bank lenders, angel investors, and venture capitalists if you’re seeking funding to grow your company.
A business plan captures the opportunity see for your company: it describes your product or service and your business model, the target market you’ll serve.
It also includes details on how you’ll execute your plan: how you’ll price and market your solution, and your financial projections.
Check out our full guide covering the basics of business plans.
Buy-Sell Agreement
A buy-sell agreement is an agreement designed to address situations in which one or more of the entrepreneurs want to sell their interest in the venture.
For more on exiting your business, check out our article on selling your business.
C
C Corporation (C Corp)
The C corporation is the classic legal entity of the vast majority of successful companies in the Unit States.
Most lawyers would agree that the C corporation is the structure that provides the best shielding from personal liability for owners, and provides the best non-tax benefits. This is a separate legal entity, different from its owners, which pays its own taxes.
Most lawyers would also probably agree that for a company that has ambitions of raising major investment capital and eventually going public. The C corporation is the standard legal entity.