Glossary
Accountability
The process of keeping a count of a person’s performance and ensuring it is in alignment with clearly communicated expectations and results of the position description.
Accounting
Keeping score of your business
Accounts Payable
Money you owe to others aka, creditors.
Accounts Receivable
Money owed to you by others aka debtors
Acquisition cost
Amount spent to acquire a new client through marketing
Alliance
A business who serves the same clientele as you but is not a competitor, that you can form a mutually beneficial referral relationship with. A win win situation.
Amortisation
The decrease in value of an asset over its life time as defined by the government. See depreciation.
Asset
Something the business owns including cash and stuff (see balance sheet)
Average dollar sale
Average amount of all sales for a given time frame. Total sales divided by number of invoices for the time frame required.
Balance sheet
One of the 3 financial statements that lists of what the business owns (assets), owes (liabilities) and is owed (equity). It’s called a balance sheet because this equation, equity = assets – liabilities must always true ie it balances. It is a snapshot that summarises these 3 elements within the business at that point in time.
Belief
Something someone holds to be true
Breakeven
Revenue needed to cover costs and give zero profit
Business
A vehicle to get the lifestyle the owner desires. Also where employees can also gain a sense of fulfilment for what they do in providing goods and or services to the market who are also fulfilled through receiving this exchange of products and or services for money.
Cash
The oxygen of a business aka money, moula, green stuff, folding, dosh.
Cash Flow
The money coming in and out of a business. Can be thought of like a bathtub. The tap is like the cash/sales coming in and the plug is like cash/expenses going out with the bath level your bank balance. Must make sure the bath doesn’t run dry to stay in business.
Cash flow projection/forecast
An educated guess at how cash will flow into and out of the business through the different areas and what the bank balance will be as a result at certain times in the future.
Cash gap
The amount of time and or cash between when a business pays for goods and or services they provide to their customers and the when they are paid by their customers.
Checklist
A list of repeatable action steps required to be carried out to keep delivery of what the business provides consistent.
Conversion rate
Number of sales made as a percentage of number of sales enquiries
Cost of sales
Cost you incur by getting a sale, ie what you pay for what you sell.
CRM
Customer relationship management software, a way to communicate with clients and prospects and keep track of their details to optimise value delivery.
Culture
What employees do when nobody is watching
Customer service
The systemised repeatable process to turn prospects into raving fans where customers feel they have received the value they were after (satisfied), more than they were after (delighted), less than they were after (ripped off).
Depreciation
The portion of the total value you subtract from the value of an asset on the balance sheet and add it to the fixed expenses on a profit and loss statement as a way of reducing profit and paying less tax. The value of the asset on the balance sheet is then gradually reduced to zero over what the government considers a reasonable lifetime.
Discount
A dirty word for lazy salesmanship.
EBITDA
Earnings before interest, depreciation and amortisation, or your figures before you accountant does their black magic to (legally) reduce your tax.
Employee
A person who carries out the tasks on a position description.
Equity
The difference between what a business owns and owes or
Equity = Assets -Liabilities (see balance sheet)
Financial Statements
The story of your business in numbers, there are three.
Gross profit
The amount invoiced by a business for goods and or services (see revenue) minus what the business paid for goods and or service (see cost of sales).
GST (VAT)
Goods and services (value added) tax, collected by you when you get a sale on behalf of the government. This is not your money.
Hire
Employ quality candidates to work for you.
Integrity
Your most important asset in business. Do what you say you will do always, or say nothing. What you choose to do when nobody is watching.
Invoice
Document issued to a purchaser for money to paid for goods and or services
KPI
Key Performance Indicator, targets or outcomes that employees must deliver
Leverage
A way of getting more output with less input. (Think about writing a book once, sell it forever or microphones at a concert) There are only 4 ways to leverage in business.
Liability
Something the business owes ie. debts (see balance sheet)
Lifetime value
Average value of a client to the business over a given time frame. Total sales divided by total number of purchasers for the time frame required.
Manager
An employee whose job it is to make sure other employees are able to and are doing what they are paid for.
Margin
A fancy word for what you keep. What sell it for minus what it costs.
Mark up
The amount added to what you paid for goods or services that is then on sold
Marketing
Communication and education on goods or services you provide to those (see suspect) who are interested in purchasing.
Meeting
2 or more people gathering to discuss one or more issues that require resolving. There is an agenda, a definite start and finish time with each meeting completion having tasks allotted to relevant person with completion date to resolve issues. It is also used as an accountability method. It is not a place for people to waffle on and have their say, unless it clearly contributes to guidelines set out above.
Networking
The process of meeting and connecting with people for purpose increasing the number of people you can collaborate and serve to grow your business.
Niche
No price competition for what you provide to your market.
Operating Expenses (Opex)
Cost to run a business whether you get a sale or not.
Organisation Chart
A hierarchical chart that explains who reports to who in the business.
Outcome
The desired or required measurable result of an action taken.
Payable days
Average number of days it takes you to pay your bills
Plan
An executable set of tasks as part of one or many strategies to achieve a desired outcome. Must also include clear and measurable start and end points.
Position description
What employees are required to do in exchange to be paid
Profit
A theoretical measure of how effectively you run your business through using business assets (including people) to create revenue that you turn into profit and ultimately cash.
Profit and loss (Income) statement
Summary of sales and expenses invoiced for a period of time and the resultant difference of either, a profit (positive result) or loss (negative result).
Profit Breakeven
Revenue needed to cover costs and give target profit
Raving Fan
A client who sells your products and services for you by telling others how good you are to do business with and the amazing value they have received.
Referral
The trust another places in you by recommending a connection of theirs to you to deliver the value they have gained from what your business provides.
Receipt
Document issued to a purchaser once goods or services have been paid for.
Receivable days
Average number of days it takes you to get paid.
Recruit
Attracting quality candidates who want to work for you.
Report
A summary of the most important pieces of data and information at the end of a period in time, relating to the operation of the business or parts of it. See Accountability.
Retained Earnings
What is left over after paying cost of sales, operating expenses, taxes and dividends to shareholders. It is found at the bottom of the balance sheet.
Revenue
The money that is invoiced by the business in return for what you provide to your market aka income or sales
Sales
Agreed amount of money to exchange for goods or services
Script
A repeatable series of words spoken by a team member as part of the system in delivering what the business does to its market.
Statement of Cash flows
One of the 3 financial statements that lists cash flowing into and out of the business through operations, investing and financing. This is the place to look when you see a profit and your P&L but say “where is my cash though?”
Strategy
A higher level overview composed of a series of tactics
Suspect
A potential buyer who meets your target market definitition.
Synergy
When the sum of the parts together as a whole is greater than the sum of the parts as individuals. Synergised Energy. 1+1= >2,3,4….. An important goal all business must seek to operate optimally. (Think a well conducted orchestra versus a school concert)
System
Save Your Self Time Energy & Money. A series of repeatable steps combined to consistently provided the desired outcome and delivery of value.
Tactic
Steps of a strategy that are executable
Tax
The governments money you collect for the right to live where you do and enjoy the services the government provides.
Target
Desired and measured goal, outcome or end result of actions carried out within business.
Team
The employees of a business who are paid to execute the plan for the business. Not to be confused with staff, a demeaning term for employees.
Testimonial
A written or recorded statement of validation of what your business provides and the value you add for your customers.
Time
A humans most valuable asset to carry out meaningful activities and get the most enjoyment from life.
Time
Your most valuable asset in business and life
Training
Education and practice on skills to improve and evolve ongoing performance and results of team members.
Upsell
increase in average dollar sale of a transaction
USP
Unique Selling Proposition, what we offer that makes us unique in our such that we have no competition for our target market.
Value
A feeling anticipated and realised (or not) through an exchange.
Vision
the common goal that all employees and owners working towards in a meaningful win win exchange
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