As a young ambitious person, it is quite easy to find yourself in a place where some business terms are used and you find yourself trying to google the meaning.
Here, we put together a list of 12 terms we believe can easily come in handy and also make you appear smart while using them with others.
1.) Action Plan: Whether you are a student, an employee or an entrepreneur, you definitely have goals or objectives that need to be brought to life. That sequence of steps that must be taken or the ordered activities that must be effectively performed is Action Plan. See here how
The community tool box identifies the following as the core of Action plans.
- The What: What actions or changes will occur. Basically, what are we going to do?
- The Who: After identifying what, we then talk about who is going to carry out changes.
- The When: Here, you clearly state by when or how long it will take to effect the change.
- The resources: What is needed to effect the change?(i.e., money, staff)
- Communication: How will information be shared among the team so everyone is carried along?
2.) Cash Flow: This particular phrase is really popular to the extent there are games for it. In it’s simplest form, it is defined as the movement of cash in and out of a business or project. This means it is possible to track where your money is coming from, what it’s being expended on etc. The board game is an opportunity for you to practice your investment skills alone or with friends in a fun way.
You can get the game here
3.) Core Competencies: A body of skills, expertise, processes, or relationships unique to an individual or organization and difficult to replicate by its competitors that enable it to provide an uncommon value to its employers, customers, employees etc.(rephrased via investorwords)
See this workforce article on a list of 31 Core competencies you can develop or enhance.
4.) Opportunity Cost: This is a key concept in economics. There is even a song on it. Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action.
Simply put, what did you lose when you chose one thing over the others. Read more here
5.) Return on Investments: This measures the gain or loss from an investment in relation to the amount invested. Calculated in percentage. See formula below
x 100= ( / Cost of )
6.) Value Proposition: This generally refers to the benefits you provide to whoever(it could be your customers as a business owner or even your employer), and how you uniquely do it. In simple daily discussions, you can hear people ask, what do you bring to the table. That is your value proposition.
7.) Intellectual Property (IP): This is the legal rights to creations of your mind. Such creations include artistic works such as music and literature, as well as discoveries, inventions, words, phrases, symbols, and designs. You may apply for a patent, copyright, trademark, etc. for it.
8.) Non-Disclosure Agreement(NDA): You have probably seen this one before as an employee or a business owner. Also, known as Confidential Agreement(CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA). It is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes but wish to restrict access to or by third parties.
9.) Insolvency: A person or company is insolvent when they are unable to pay back their debts on time. See here for comprehensive discussion on it.
10.) Burden of Proof: This is a law term originally from latin onus probandi. It is described as when you are tasked with the responsibility to prove that your claim or belief is valid.
11.) Business plan: Hopefully you get to start a business or partner in one someday. At which point you would need to have a clearly defined Business plan. A business plan is a written document that describes your business. It highlights the objectives, strategies, sales, marketing and financial forecasts of your business. A business plan helps you to: clarify your business idea.
12.) Conflict of Interest (COI): Business Dictionary defines it as a situation that has the potential to undermine the impartiality of a person because of the possibility of a clash between the person’s self-interest and professional interest or public interest.
Kindly share with us the business terms not captured in the list that you think would be useful to other young people.
Also, tell us if this post is helpful in any way.