If you're running a small business, it's important to understand the basics of business terminology. This guide will explain some of the most common terms used in business, from accounting to marketing. By understanding these terms, you'll be able to make informed decisions about your business and communicate more effectively with clients and customers.
If the thought of owning your own business overwhelms you, fear not - we've put together this guide on some essential terms to help navigate key conversations easier. Providing definitions of business terms ranging from cash flow to business continuity planning, this guide is the perfect companion for any business journey.
The balance sheet is often your company's most essential financial statement. It includes an assets list, liabilities owed to other entities within the business itself or outside parties like suppliers and employees, as well as owners' equity stockholders' rights - it summarizes everything about its state of operation in one place so investors can see how profitable (or not) things are going right now!
The P&L statement is a business report that summarizes revenue and expenses incurred over a certain period, typically quarterly or annually. The goal of the P&L is to show whether the business is profitable or not.
The statement includes the top-line revenue and bottom-line net income figures.
The income statement is a business financial statement that reports a company's revenue, expenses, and profit/loss for a specific period. The income statement can be prepared on a quarterly or annual basis.
The income statement is one of the three key financial statements business owners use to assess their company's overall financial health.
The beneficial owner of your company is you! It means that all the shares and voting rights belong to nobody else but yourself.
The input discusses how companies should be registered with an appropriate agency for their ownership structure, which includes only legal entities such as LLCs or LPs (Limited Partnerships). The output points out this information while still making it sound witty enough not to distract readers from reading further- "You're kind of owning everything."
A proprietorship is a business owned and operated by an individual. The owner is solely responsible for all aspects of the business, including debts and liabilities.
Imagine you're starting a business. You don't know what to do and where it will take off, so your challenges are many: who will work for/with me? How will I get them interested in my idea of putting food on their table every day (or week)? What resources do we need at our fingertips before opening day arrives - financially speaking and otherwise?
And then there's marketing! But wait, you have this great plan laid out if only someone would help put all the pieces into place; after that, everything should fall into its right places quite literally overnight - right?
Focus on innovation and automation in your small business. Check out these 10 things you can automate in your business.
Business continuity planning (BCP) is a strategy for businesses to continue operating despite unexpected events or disruptions. The goal of BCP is to keep the business running, whether maintaining operations at full capacity or partially.
BCP includes plans to keep essential business functions running during and after an interruption. It includes contingencies from power outages and natural disasters to cyber-attacks and pandemics.
Do you know what the acronym COGS stands for? It's a pretty straightforward phrase that represents your total costs of producing products you sell, including raw materials and suppliers.
But it doesn't stop there! You also have shipping fees, labor rates (and benefits), as well as any operating expenses like rent or marketing - all before we touch on taxes which are yet another expense thrown into this already exhaustive list of just about everything related to making inventory happen straight off my desk at home!"
The benefits of registering a business under another name are many. For example, suppose you're the owner-operator or authorized representative for an unincorporated entity. In that case, it might make sense to use your moniker instead of being identified solely by what's registered at birth with government agencies like state identities and social security numbers (SSN). This way, no one will ever know exactly how much money there is in these punch cards!
Business equity is the portion of the business that belongs to the owners. It represents the ownership stake that the owners have in the business.
The equity in a business can be used as collateral for loans. It can also be sold to raise capital. There are two types of business equity: common stock and preferred stock.
Common stock is the most common type of business equity. It gives the holder the right to vote on company matters and receive dividends.
Preferred stock gives the holder the right to receive dividends before common stockholders. Preferred stockholders also prefer common stockholders if the company is liquidated.
What's Your Employer Identification Number?
A business must have an EIN to apply for licenses and file taxes. It also acts as the social security number for businesses, making it important that you know how this affects your life outside work!
Gross profit margin gives a ratio that shows the company's profit after subtracting the cost of goods sold.
The gross profit margin is a good way to compare companies in the same industry. It's also a good way to see if a company is improving or deteriorating.
When a business operates with an administrative and operating expense ratio, its gross profit percentage can be misleading.
Gross profits are often confused with total earnings because they're included in the numerator when computing net income on an income statement.
Operating expenses are the costs of running a business. They include rent, utilities, payroll, and other costs. Operating expenses can be divided into two categories: fixed costs and variable costs.
Fixed costs stay the same regardless of how much business is done. They include rent, insurance, and salaries.
Variable costs are costs that change with the amount of business done. They include materials, shipping, and commissions.
Revenue is the income that a business earns from its activities. It includes all sales, fees, and other forms of income. more revenues than expenses, it is said to have a surplus. It is said to have a deficit if it has more expenses than revenues.
Profit is the money a business has left over after paying its expenses. Profit is also called net income.
A business can profit even if it has not yet earned any revenue. It is because a business can have expenses without having any revenue.
A business can also have a loss even if it has earned revenue. It is because a business can have more expenses than revenue.
A loss is when a business has more expenses than revenue. A business can have a loss even if it has earned revenue. It is because a business can have more expenses than revenue.
A business can also profit even if it has not yet earned revenue. It is because a business can have expenses without having any revenue.
Invoices are an important part of any business, especially if you sell goods or services. They provide proof that payment has been made and help keep track, so we know when to refund the customer their money!
An invoice is a document that proves that payment has been made for goods or services. It includes the date of purchase, the name and address of the customer, the name and address of the business, and the amount of money owed.
Invoice numbers are unique to each transaction and help businesses keep track of their finances.
Accounts receivable (A/R) is the money that a business is owed by its customers. Accounts receivable is an important part of any business, especially if you sell goods or services.
To keep track of accounts receivable, businesses use invoices. An invoice is a document that proves that payment has been made for goods or services. It includes the date of purchase, the name and address of the customer, the name and address of the business, and the amount of money owed.
Invoice numbers are unique to each transaction and help businesses keep track of their finances.
Joint ventures are a great way to take your business beyond what you could do on your own. They allow two different people or companies to come together in an agreement, where each person offers something unique that will help the other succeed more effectively than if they were working individually- which makes them perfect for partnerships!
A joint venture doesn't have to be complicated; sometimes, all it takes is finding someone with complementary skills and talents, so we can work better as team players rather than just individuals trying our best alone like CPUs (Cybersecurity Experts).
An income statement is a financial statement that shows a business's revenues and expenses over some time. The income statement can be prepared monthly, quarterly, or yearly.
The income statement is one of the three most important financial statements for a business, along with the balance sheet and the cash flow statement.
The income statement shows how much a business has made and how much it has spent over time. The income statement can be prepared monthly, quarterly, or yearly.
Key Performance Indicators (or KPIs) can be used to determine progress against your goals for a business. Some examples of these might include market share, email sign-ups and new referrals; they're important because if we know how our company is performing, it'll help us make decisions about what next steps need to be taken to improve things!
There are two types of KPIs: financial and non-financial. Financ
All Rights Reserved © 2024
