Understanding the language of business can help you to create and carry out a successful business strategy. In an earlier article, we presented 25 essential terms every businessman must Know. Feel free Read it HERE. While knowing those 25 is a good start, that’s not the whole picture. There’s more you should know as an aspiring entrepreneur. Thus, in this article we’ll be presenting 25 more essential business terms for every entrepreneur who hopes to succeed in business.
This occurs when a business sells a product to individual customers usually for personal use. It involves reselling products to end consumers; often known as business to consumer(B2C). A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and sells to consumers for a profit.
Merchandising refers to all the strategies you employ to persuade potential customers to purchase a product. Presenting things in a visually appealing way is a regular aspect of marketing to promote sales. It’s because of good marketing that companies such as Coca-Cola are evergreen.
It is the process of giving a company its own unique identity in the eyes of customers. The logo, aesthetic style, and mission of a corporation comprise its branding. Branding can change how people perceive your brand, it can drive new business, and increase sales.
Manufacturing is the creation of items with the use of equipment, labor, machines, tools, and chemical or organic processes. Keeping production costs to a minimum, having good quality control and excellent sales management are key to reducing the risk involved with manufacturing. If you plan on selling physical good, you should find a suitable manufacturer that can produce large quantities without reducing quality.
A business, enterprise, or charitable cause can raise money through crowdfunding by soliciting contributions from individuals. It has created the opportunity for entrepreneurs to raise hundreds of thousands or millions from investors. Kickstarter or GoFundMe are examples of crowdfunding services.
It can be described as the act of organizing and transporting resources, such as goods, inventories, and equipment, from one location to store at the intended location. The goal of logistics is to meet customer requirements in a timely and cost-effective manner. In business you can have procurement logistics, production logistics, sales logistics, recycling logistics and recovery logistics.
7. Niche Market
A niche market is a subset of a larger market with its own needs or preferences, which may be different from the larger market. Based on consumers' positive reactions to the product, researchers can choose which audience to target. Having a niche market enables you to focus your efforts and get better results.
8. Direct Marketing
Direct marketing is a style of advertising that involves communicating with your target market directly to offer information about your business, product, or service. Direct mail, telemarketing and email marketing are all popular types of direct marketing. In direct marketing, you sell straight to consumers without going through retailers which could potentially get you higher profits.
9. Product Positioning
It is a marketing technique that highlights your product's advantages to a specific target market. It helps to determine new products' position in the minds of consumers. A product can be positioned in a favorable way through advertising, the media, the product packaging, and price.
10. Profit Margin
The measure of a product, service, or company's profitability is its profit margin. The bigger the percentage representing the profit margin, the more profitable the company is. It represents what percentage of sales has turned into profits
Prospecting is the first step in the sales process, which consists of identifying potential customers. The goal of prospecting is to create a database of potential clients. These are individuals or other businesses who have confirmed that they might be interested in your product or service.
12. Purchase Order
A purchase order, often known as a PO, is a legal document that the buyer issues to the seller pledging to pay for the sale of goods or services that will be provided in the future. The document is used to procure materials for direct consumption or for stock. Because of the issues that could arise in procuring goods such as supply shortages, or miscommunication, purchase orders help to make the process smoother.
13. Opportunity Cost
The value of what you must give up in order to pick something else is referred to as opportunity cost in economics. Understanding the potential missed opportunities when a business chooses one investment over another allows for better decision making. It is in a nutshell, the worth of the path not traveled.
14. Bank loan
A bank loan is an arrangement in which a bank gives you money that you repay with interest. It is the first stop for most businesses seeking funding. Traditional banks are often wary of lending to small businesses because of the associated risks and relatively small loan amounts. Learn more about why you should get into debt.
15. Bank statements
Bank statements provide a written record of your bank balances and the amounts that have been withdrawn and deposited. This report summarizes the beginning and ending balances of the account, deposits in the form of income, cash deposits and Interest earned on the account. In business, you must have a mastery of your numbers, thus you need to check these statements regularly.
16. Custom Duties
Customs duties are charges levied on goods when they cross international borders. Customs duties are charged by special authorities and bodies created by local governments and are meant to protect local industries, economies, and businesses. It’s a way of controlling foreign trade, particularly prohibited or restricted goods into and out of the country. If you’re into import/export, you have to account for this.
It involves bringing products or services that have been produced elsewhere for sale in another country. Imported goods are important to businesses as well as the consumer market. Starting an import business allows you to purchase these goods for resale at a low cost to get a high profit margin.
Governments provide subsidies to domestic businesses in order to reduce their business costs. This helps to bring down the price of domestic goods and services, encouraging consumers to buy domestic rather than imported goods. Subsidies could correct market failures thus boosting the economy of a country.
Taxes are compulsory payments made to a government organization by citizens and businesses. Tax revenues are used to fund government initiatives, such as Social Security and Medical care as well as public infrastructure. While most countries impose corporate taxes, others have little or no taxes such as Bermuda, Bahrain, the Cayman Islands etc. These are often used as tax havens.
20. Balance of Payment
The balance of payment summarizes an economy's international economic dealings. These transactions consist of transfer payments as well as the export and import of products, services, and financial assets. It’s used to regulate international trade.
Currency is a medium of exchange for goods and services. It is money, in the form of paper and coins, usually issued by a government and generally accepted at its face value as a method of payment. Most of the currencies today are fiat currencies, meaning they are not backed by any real assets but are used as decreed by the respective governments.
Moving items created inside a nation's borders and traded with another nation are referred to as exports. The receiving nation is the importer while the sending nation is the exporter. Commercialization of these products increases the economic growth of the nation that produces them by bringing in foreign exchange profits. It’s an essential component of international trade.
These are quantifiable goods or services that need to be provided at the various steps of a project as well as at the end of a project. At the start of any project, there must be a defined end goal of what is to be achieved. There must then be a clearly defined path to achieve that goal.
Benchmarking is a marketing strategy that entails conducting research and comparative analysis. Benchmarking analyzes and evaluates the management and organizational strategies used by other businesses. It’s used as a way of measuring a company’s performance against the industry standard.
The term SWOT refers to an analytical method that looks at your strengths, weaknesses, opportunities, and threats. This crucial metric can be used to evaluate the health of a business. SWOT Analysis can help businessmen challenge risky assumptions and uncover dangerous blind spots.
You can better service your company and determine how the health of your company is performing if you master and understand how to apply these terms. Additionally, you will be equipped to handle financial difficulties that may arise for your company. Thank you for reading and don't forget to "like," "share," and SUBSCRIBE to our blog
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