Business Keywords

Consumer good

Physical and tangible goods sold to the general public, including durable goods like cars and non-durable goods like food.

Capital goods

Physical goods used by industries to aid in the production of other goods and services, such as machines.

Creating value

Increasing the difference between the cost of materials and the selling price of finished goods.

Opportunity cost

The benefit of the next best option foregone.

Entrepreneur

Individual taking financial risks to start and manage a new venture.

Triple bottom line

Three objectives of social enterprises:economic, social, and environmental.

Public sector

Organizations controlled by the government.

Private sector

Businesses owned and controlled by individuals or groups.

Free-market economy

Economic resources owned by the private sector with minimal state intervention.

Stakeholders

People or groups affected by an organization's actions.

Motivation

Factors stimulating people to take actions leading to goal achievement.

Job enrichment

Allowing workers to do more challenging and fulfilling work.

Fringe benefits

Additional benefits given by employers to employees.

Human resource management (HRM)

Strategic management of an organization's workers.

Market orientation

Basing product decisions on consumer demand.

Demand

Quantity of a product consumers are willing and able to buy at a given price.

USP (Unique Selling Point)

Special feature of a product that differentiates it from competitors.

Market segmentation

Identifying different segments within a market and targeting products or services to them.

Market research

Collecting, recording, and analyzing data about customers, competitors, and the market.

Marketing mix

The four key decisions to effectively market a product.

Customer relationship management (CRM)

Using marketing activities to establish successful customer relationships to maintain existing customer loyalty.

Brand

An identifying symbol, image, or trademark that distinguishes a product from its competitors.

Intangible attributes of a product

Subjective opinions of customers about a product that cannot be measured or compared easily.

Tangible attributes of a product

Measurable features of a product that can be easily compared with other products.

Product

The end result of the production process sold on the market to satisfy a customer need.

Product positioning

The consumer perception of a product or service as compared to its competitors.

Product portfolio analysis

Analyzing the range of existing products of a business to help allocate resources effectively between them.

Product life cycle

The pattern of sales recorded by a product from launch to withdrawal from the market and is one of the main forms of product portfolio analysis.

Extension strategy

Marketing plans to extend the maturity stage of the product before a brand new one is needed.

Consumer durable

Manufactured products that can be reused and are expected to have a reasonably long life, such as a car or washing machine.

Operating profit margin

Ratio comparing operating profit to revenue, calculated as operating profit/revenue × 100.

Liquidity

The ability of a firm to pay its short-term debts.

Current ratio

Ratio of current assets to current liabilities.

Acid-test ratio

Ratio of liquid assets to current liabilities.

Liquid assets

Calculated as current assets minus inventories (stocks).

Window-dressing

Presenting company accounts in a favorable light to enhance business performance.

Cash flow

The difference between cash inflows and outflows to a business.

Liquidation

Process where a firm stops trading and sells assets to pay creditors.

Insolvent

When a business cannot meet its short-term debts.

Cash inflows

Cash payments received by a business from customers or banks.

Cash outflows

Cash payments made by a business to suppliers and workers.

Cash-flow forecast

Estimate of a firm's future cash inflows and outflows.

Net monthly cash flow

The difference between monthly cash inflows and outflows.

Opening cash balance

Cash held by the business at the beginning of the month.

Closing cash balance

Cash held at the end of the month, becoming the next month's opening balance.

Overtrading

Expanding a business rapidly without adequate finance, leading to cash-flow issues.

Credit control

Monitoring debts to ensure credit periods are not exceeded.

Bad debt

Unpaid customers' bills unlikely to be paid.

Creditors

Suppliers providing products on credit who have not been paid yet.