Essential Definitions to Know When Planning a Business

Today I’ve compiled a list of all the essential business terms you need to know when planning and starting a business. These words are ones which when starting a business you should be aware of, so that you can plan ahead more and impress your future contacts.

General

Entrepreneur – A person who has an idea and then sets up a business to develop that idea and let it grow. Taking risks to reap the rewards.

Copyright – Legal protection against copying others work.

Trademark – Signs, logos, symbols or words displayed on a company’s products, helping to distinguish its brand from others.

Unique Selling Point – A feature of a product or service which makes it different from others.

Business Plan – A report which helps describe a businesses options, such as its marketing strategy, operational plans and financial information.

Marketing – Satisfying and make customers want products by pleasing them and appealing to their needs.

Market Research – Looking into the market to learn about it, through means such as information collection, data analysis and more.

Demand – The amount of a product or service that customers are willing to buy.

Money

Opportunity Costs – The cost of taking a particular action, or the next best action.Adding Value – Increasing the value of resources by modifying them.

Profit – The difference between the income of a business and its total costs.

Revenue – The income made by a business.

Fixed Costs – Costs that aren’t affected by output of products, for example building rent.

Variable Costs – Costs which depend directly on output, for example buying raw materials.

Break-even – When the revenue made cancels out the total costs (Fixed Costs + Variable Costs).

Cash-Flow – The amount of cash available to the business.

Liquidity – The ability to convert assets into cash.

Budget – A plan in financial terms to look at what the likely income, expenditure and profit will cost.

Hopefully some of these definitions will prove to be useful. If you think I have missed an important one, please leave a message in the comments below.

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