knowledge matters vocabulary and formulas

data you collect yourself, like a survey

primary research

data someone else already collected

secondary research

number of people surveyed; smaller = less reliable

sample size

dividing results or customers into groups

segmentation

the customers a business aims to serve

target market

population traits: age, income, gender

demographics

all the products a store carries

product mix

rent divided by square feet

cost per square feet

business selling similar products to the same customers

competitor

price minus cost

margin

price = sales down (and vice versa)

law of demand

item priced very low to attract customers

loss leader

4 Ps

product, place, price, promotion

persuading customers to buy (ads, email)

promotion

total money taken in from sales

revenue

money spent to run the business

expense

revenue minus expenses

profit

rewards repeat buyers; source of email addresses

loyalty program

complaint that an email is unwanted

spam report

salesperson helps customer choose an item

consultative selling

an expensive product, like a TV

high ticket item

running out of a product

stock out

amount of a product the store aims to keep

target inventory

how long a product lasts before expiring

shelf life

arranging products to increase sales

merchandising

product customers come in to buy

need item

product bought on the spur of the moment

impulse item

products bough together (chips and salsa)

complementary goods

unexplained loss of inventory

shrinkage

benefit is greater than the cost

cost effective

money needed to open before earning revenue

start up costs

money to start a business, often borrowed

capital/loan

the cost of borrowing money

interest

revenue, expenses, and profit over time

income statement

what a business owns and owes at one point in time

balance sheet

starting your own business, with its risks and rewards

entrepreneurship

formula for profit

revenue - expenses

formula for total gross profit

margin x units sold

formula for margin per item

price - cost

formula for cost per sq ft

rent/square feet

formula for margin %

(price - cost) / price x 100

formula for open rate

opened/sent x 100