Jargon Buster for Small Businesses

Do you feel a bit lost in the middle of all the business jargon you need to get used to? Look no further, here are some definitions for you in our very own jargon buster – business edition.

After Sale Marketing: This mostly takes place over email, and refers to marketing for your existing customers, in an effort to build loyalty and get them to come back time and time again.

Android Pay: Simply, Android Pay is a digital wallet for Android smartphones. This enables users to securely pay for purchases via an app, whether in-store or online, making it a quick and easy way to deal with your transactions.

Apple Pay: Much like Android Pay, this is a digital wallet for iPhones, iPads, Apple Watch and Mac. To be able to use Apple Pay with these devices, you need to input ‘touch ID’, a system that identifies you based on your fingerprint. Without being able to provide proof that you are the one using your device, Apple Pay will not work.

Automatic Enrolment: A legal obligation placed on every employer in the UK. It is a scheme that requires an employer to enroll its employees on a company pension scheme, where the employer and employee contribute financially.

 

Book-keeping: Keeping track of what’s going on with your business is vital. Here you will keep details of sales, transactions etc. This not only keeps things organized, but it also requires by law to keep accurate financial records for tax purposes and so on.

Brand + Branding: Brand refers to the experience that customers get from engaging with your business. Branding, on the other hand, is what makes your business stand on its own as an original and unique business. Branding is the name, symbol, design etc.

Breakeven: The amount your business must make in sales to cover costs before you generate profit.

Brick and mortar: An actual shop or location for your business rather than an online-only enterprise, that is a physical building.

Budgeting: Budgeting is important because you need to have an idea of how your business will spend money. Budgeting will give you an element of control over this aspect of your business.

Business Bank Account: You may be tired of hearing the same advice from everyone, but it’s extremely important to open a business bank account, and not confuse it with your personal bank account. This is an account opened by you as a business owner and used solely for the financial operations of your business.

Business Plan: Even if you do not adhere to your plan perfectly, it is advisable to have a plan when starting a business. The plan will include a description of your business, target audience, goals, strategy and so on.

Business Partnership: A type of company. A business partnership is a business that is shared between multiple people or companies.

 

Card reader: This is a device designed for card reading. This happens in a variety of different ways, such as through a magnetic strip, chip, PIN or contactless technology.

Cash Flow: A record of how money is used in your business, i.e. the money that is paid in and taken out.

Chargeback: When the card user asks for a refund for something they have not personally ordered.

Cloud computing: An online cloud that is used to access, store and manage data. This is very effective in cases where a laptop can break for example. It means that as a business manager you do not lose all your data.

Companies House: Government agency incorporating and dissolving companies. It registers the information that companies are required by law to supply and make public. For more information, visit Companies House.

Competitors: You need to be aware of other businesses in your market that are also competing for sales. In order to be successful, you have to offer originality to the public, and this will give you the upper hand over your competitors.

Contactless: The contactless method is new and modern, where you are asked to hold your card in front of a suitable reader in order to make a quick payment. You do not need to input your PIN with this method.

Credit Control: A credit management system is used by businesses to ensure that they only give credit to customers who can pay, and that these customers pay on time. If you want to manage the cash flow of your business well, you should consider this system.

Crowdfunding: An alternative way of funding your project or enterprise. Crowdfunding aims to raise funds in small amounts from many different people. Crowdfunding is mostly used online.

 

Digital Wallet: This is a clever and modern way of storing digital versions of payment cards on a mobile device. Cards are stored securely in a payment app and allows the user to pay with their phone in the same way as they would with a contactless card, by holding it to a reader.

 

E-Commerce: E-Commerce is a term applied to online stores where customers can browse and buy goods or services from you as a business.

Employment contract: An employment contract explains the legal terms and conditions that have been set for employees. If there is no official contract in place, you must provide a written statement of employment on or before the first day of work.

Entrepreneur: Someone who takes personal financial risk in order to set up his own business.

 

Forecast: The ability to anticipate the future of looking back at your business’ past. A way of using previous annual sales figures to forecast sales this year.

Finance: The money available to enable a business manager to start, run and grow his business. Many sources of start-up funding are available in the form of grants.

Flexible working: Almost all employees who work continuously for 26 weeks have the right to request flexible working (i.e. a way of working, such as flexible start and finish times, which is more suited to an employee’s circumstances) .

Franchising: Selling licenses to franchisees who will then be able to sell your products and / or services using your brand, processes etc.

Friendly Fraud: Friendly fraud is when a customer makes a fraudulent charge by claiming that they have not received an item paid for, and they try to reclaim the cost even though they actually received the item.

 

Gross profit: Turnover (i.e. total sales) minus production cost and direct costs. To find the percentage of gross profit, divide the profit by the gross turnover and multiply by 100.

 

HMRC: Her Majesty’s Revenue & Customs Challenge, or HM Revenue & Customs. This is the UK Government department responsible for tax collection. For more information, visit the HMRC website.

 

Income tax: A tax levied directly by HM Revenue and Customs on personal income. Click here to find out more.

Incorporation: The legal process of incorporating your business, which is to form it officially.

Invoice: An invoice bill is a bill for goods or services you send to customers for payment. All invoices must include some additional details, namely a brief description of supply, price and VAT (if applicable). A new ‘E-invoices’ method, or e-invoices, is now available which allows this process to take place digitally.

 

KPI: Key performance indicators are notes that can be taken to help measure the success of your business in specific areas, so you can know where to improve. Therefore, keep a record of monthly sales, new customers, net profits and so on.

 

Leasing: This means paying for the use of something, rather than owning an asset. This can be a more cost-effective solution as you go about your work.

Limited company: This means a private company whose owners are legally responsible for its debts. If you set up a limited company, you become an employee and pay income tax and State Insurance contributions. For more information, visit this document set by the Government.

Limited liability partnership: A limited liability partnership means that each partner’s liabilities are limited to the amount they put into the business. This means that partners are not personally liable for business debts, but rather, their liability is limited to the money they have invested in the business. For all the details, visit the Government’s guidelines on a limited liability partnership.

 

Market: A market is simply the place where goods are bought and sold.

Marketing: Marketing is the process that starts with the products and services being developed, then promoted and distributed.

Marketing mix: This refers to the four main marketing areas that need consideration, namely product, price, promotion and location.

Marketing plan: The marketing plan details your marketing objectives and strategy. It is also an effective way of measuring your success and looking at areas you can improve.

Market research: Conducting market research is essential work that enables you to better understand your customers and competitors, in order to refine your product and service to be more attractive.

Margin: This means the difference between selling price and the cost of bringing the product and/or service to the market in the first place.

Mentor: Mentoring is something that is commonly seen in business. A mentor is usually an experienced business person who provides advice, guidance and support to help start your business and make it grow.

Micro business: This is a term to describe a business with fewer than ten employees and a turnover of less than £ 1.7 million.

 

National Living Wage (NLW): National Living Wage is available to those aged 23 or over, and refers to the minimum hourly wage to which nearly all workers are entitled to. Failure to pay this living wage is a criminal offense. Click here for more information.

National Minimum Wage (NMW): The minimum hourly wage to which virtually all employees are entitled to. Different rates will apply depending on the age of the employee. These rates change annually, and again, failure to pay the minimum wage is a criminal offense. Click here for more information.

Net profit: Net profit means the gross profit, excluding indirect costs and expenses. To find the percentage of net profit, you divide the net profit by turnover and multiply by 100.

Niche market: You’ve probably heard the word ‘niche’ many times since starting your own business, but don’t worry if you’re unsure of its meaning. A niche market refers to a smaller and more defined market segment. Niche market products are usually more specialized.

 

Omnichannel: This is also commonly known as multi-channel. This refers to the presence of a brand as more than just a physical building, but also as a brand that promotes itself online, on social media or through marketing emails. This offers a complete shopper experience and consequently boosts sales.

Online marketing: The online techniques that businesses can make use of in order to promote themselves and advertise their products, services or brand.

Operations management: Operations management involves the smooth, effective management, planning or execution of your business. This is a key process if you want to see your business thrive.

Overheads: This term refers to the ongoing day-to-day running costs of payments such as rent etc., but does not include the direct costs associated with creating a product or service.

 

Parental bereavement leave: All employed parents are entitled to one or two weeks’ leave if they lose a child under 18 or suffer a stillbirth from 24 weeks of pregnancy.

Premises: The premises in which a business operates. There are a wide range of commercial premises to choose from but many businesses work and operate at home.

Payment system: The tools you use to confirm payments in your business, so this can be a modern card reader or a cash till.

PCI Compliance: Payment Card Industry Data Security Standard. It is the global compliance of payment card security that ensures sensitive consumer data is kept secure. The storage, processing and transmission of this data is closely governed by PCI rules. You may face a fee if you are unable to meet PCI compliance standards.

Point-of-sale (POS): Quite literally, this refers to the point where transactions are made and completed, and therefore refers to where the buying and selling takes place.

Pop-up: A temporary shop. This is applicable for small and large businesses, and can operate for a day or for several months.

 

Receipt: A receipt is a document that confirms that an individual has purchased a particular item from a particular business. These can be digital, or can be sent via text or email.

 

Seasonal business: A business that only runs for part of the year, rather than for the full duration. A good example of this would be an ice cream shop that is only open during the summer.

Sector: A part of the economy where businesses share similar products or service, e.g. the food sector.

Segment: A group of customers who share similar characteristics, tastes, habits and needs.

Self-employed: Someone who works for him or herself, also recognized as a sole trader. They do not pay tax on their personal earnings, but rather on the profits of their business.

Shared Parental Leave: A new system that offers parents more flexibility to arrange time off after the birth or adoption of a child. New mothers can share their maternity leave with their partners following the birth of their babies. After taking two weeks off after the birth, a mother can flexibly divide the remaining 50 weeks between herself and her partner.

Small business: Although the definition of what constitutes a small business varies slightly, it is officially defined as a business with up to 50 employees, and/or a turnover of up to £6.5m a year.

Small and medium-sized enterprise (SME): This term is used to distinguish large businesses from other types of business. It is a medium-sized business with less than 250 employees and a turnover of up to £ 50m.

Social enterprise: Social enterprise exists to tackle problems within society and improve communities, people’s life chances or the environment. They work by making their money selling goods and services in the open market, and then reinvesting the profits back into the business or local community.

Sole trader: See ‘self-employed’.

Start-up: A newly established business. the term is often associated with innovative businesses seeking to grow rapidly through external funding.

Statutory Maternity Pay: Statutory maternity pay is paid for the 39 weeks the parent is absent from work. Currently, 90% of average weekly earnings are paid for the first six weeks. Then, £151.97 or 90% of your weekly earnings, whichever is lower, will be paid for the next 33 weeks. Most pregnant workers are entitled to maternity leave and pay.

Statutory Sick Pay: If you are not well enough to work, £96.35 in costs are paid each week that you are ill, but many employers pay more than this amount.

Strategy: A strategy is an action plan designed to achieve an overall or long-term goal. In your business plan, you should always explain your business strategy and objectives.

SWOT analysis: SWOT is an acronym that stands for Strength, Weaknesses, Opportunities and Threats. These are all key to any business plan.

Samsung Pay: A digital wallet for Samsung phones. Payment card can be used electronically by presenting it in front of a card reader. Obviously, the user will have to authorize payments before they are confirmed. This will be done by touch, iris scan or PIN code.

Stock management: Just like the name says, stock management means keeping a record of all the items you have in stock.

 

Target market: The target market is a specific group of consumers or customers where a business specifically targets their product or service.

Turnover: Turnover is the total value of sales made by a business in a given period (this is usually recorded on an annual basis).

Two-step Verification: A method of protecting consumers online by requesting two specific ways to confirm authorization. The most common way to go about this is to ask for a special password and code before accessing any confidential information.

 

Unique selling proposition (USP): The factor, or factors, that sets your business apart from your competitors, and thus motivates your customers to buy from you, and not from anyone else.

 

VAT (Value Added Tax) – Tle transaction tax charged on the sale of goods and services, with a standard rate of 20%. You, as a business, must register for VAT if your turnover is over £85,000. Click here for more information.

 

Working capital: The money your business needs to trade day to day and stay in business.

Workplace pension: A pension scheme paid monthly by employer and employee. It is mandatory for all employees to register in order to receive this monthly payment.

Rhannu | Share
Share on facebook
Share on twitter
Share on linkedin
Logo gofod.space

croeso | welcome

Gofod i berchnogion busnesau bach gael gwybodaeth, cefnogaeth ac ysbrydoliaeth

A space for small business owners to obtain information, support and inspiration

Cylchlythyr | Newsletter
Posts Eraill | Other Posts

Mae'r wefan yma yn defnyddio cookies er mwyn gwneud siwr eich bod yn cael y profiad gora' posib.
This website uses cookies to ensure you get the best experience on our website.