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Business Term Glossary

1. Accessory Goods - products required by commercial operations to conduct business, such as: office copiers, automobile wheel balancers, auxiliary power supplies, air compressors, etc. 2. Accounts Payable - short term debts incurred as the result of day-to-day operations. 3. Accounts Receivable - monies due your enterprise as the result of day-to-day operations. 4. Accrual Based Accounting - an accounting method that enters income and expenses into the boo s at the time of contract !ersus when payment is recei!ed or expenses incurred. ". Assets - all real or intellectual property owned by the enterprise that has a positi!e financial !alue. #. Balance Sheet - a statement of assets and liabilities. $. Barriers to Entry - conditions that create difficulty for competitors to enter the mar et. %or example, copyrights, trademar s, patents, dedicated distribution channels and high initial in!estment requirements. &. Break-Even Point - the point at which re!enues are equal to expenses. '. Business Services - ser!ices offered to commercial enterprises, such as: equipment maintenance, supplying of part time personnel, engineering, design and management consulting, etc. 1(. Capital - the financial in!estment required to initiate and)or operate an enterprise. 11. Cash Based Accounting - an accounting method that enters income and expenses into the boo s at the time when payment is recei!ed or expenses incurred. 12. Cash lo! - the transfer of monies into and out of an enterprise. 13. Collateral - assets that can be pledged to guarantee a loan. 14. Convenience Goods - goods often used by the consumer, but the consumer is unwilling to spend *shopping time* to acquire them. +his co!ers a broad spectrum of products including candy, cigarettes, drugs, newspapers, maga,ines and most grocery products. 1". Corporate "mage Advertising - a *corporate image* ad is designed to primarily promote the enterprise and secondarily promote the products or ser!ices of the enterprise. 1#. Cost o# Goods - the direct costs in!ol!ed in producing a product or ser!ice which usually includes labor and materials. 1$. Cost o# Sales - the cost of goods plus the expenses in!ol!ed in selling and deli!ering the product or ser!ice. 1&. Current Assets - -ssets that can be con!erted quic ly to cash. 1'. Current $iabilities - -ll debts incurred in the normal day-to-day business and due within one calendar year.

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2(. %ebt Service - the regular payments required to eep a loan current. 21. %epreciation - +he gradual erosion of the usability and !alue .possibly due to obsolescence/ of an enterprise0s fixed assets. 1n some cases depreciation can be declared as a tax deduction. 22. %irect Sales &ethod - selling direct to the end user with promotional efforts using ad!ertising, direct mail or telephone sales. 23. %istributor - an enterprise that purchases your products for resale to their customers who are usually retail outlets. +he distributor expects to recei!e a significant price discount for pro!iding the distribution ser!ice. 24. %istribution Channel - the path your product follows to be deli!ered to the end user. +his may be through distributors, retail outlets, self ser!ice outlets, !ending machines, telephone sales, direct mail sales, etc. 2". E'uity - a percentage ownership of an enterprise, usually in the form of stoc . 2#. ashion Goods - goods where style is important and price is secondary. +hese products could include clothing, 2ewelry, furniture, draperies, and dishes, but can sometimes be stretched into other areas such as umbrellas, wal ing canes, cigarette holders, etc. 2$. i(ed Assets - .sometimes called long term assets/ these are usually non-liquid assets that are integral to the enterprise0s day-to-day business operations such as plants, equipment, furniture and real estate. 2&. i(ed Costs - +he day-to-day cost of doing business that is pre-committed, such as salaries, insurance, lease expenses, utilities, etc. 2'. ull Service Retail Sales &ethod - selling from a sales outlet directly to the end user at retail prices with sales personnel who can explain the purpose and !alue of the product or ser!ice. 3(. Gross Pro#it - re!enues less cost of sales. 31. "mpersonal Service at Customer)s Site - this ser!ice usually in!ol!es wor ing with the customer0s property and seldom deals with factors that the customer deems confidential. 3xamples of this type of ser!ice would be: lawn ser!ice, typewriter repair, office cleaning, truc ing ser!ice, etc. 32. "mpersonal Service at Servicer)s Site - this ser!ice usually in!ol!es wor ing with the customer0s property and seldom deals with factors that the customer deems confidential. +he ser!ice is traditionally pro!ided at the ser!icer0s enterprise. 3xamples of this type of ser!ice would be: auto mechanic, +4 repair, etc. 33. "mpersonal Service* +olume - this type of ser!ice is usually designed such that the same ser!ice will satisfy the needs of all customers. 1t is often the case that the ser!icer and the customer ne!er meet. 3xamples of this type of ser!ice would be: classified ads, storage loc ers, money changers, etc. 34. "ncome Statement - .sometimes called 5rofit 6 7oss statement/ a statement of re!enues and expenses.

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3". "nstallation Goods - products requiring large and expensi!e capital in!estments that will ha!e a long life. +his could include homes, office buildings, manufacturing facilities, and other types of commercial facilities or equipment such as tractors, printing presses, cranes and robotic assembly line processors. 3#. "ntangible Assets - non-physical assets such as patents, trademar s, a customer base, brand recognition of your products, etc. +his is sometimes called goodwill. 3$. "nventory Turnover - a ratio for e!aluating sales effecti!eness. %or a gi!en accounting period di!ide total re!enue for the product by the a!erage retail !alue of the product in!entory. 3&. $icensing agreement - an agreement between two enterprises allowing one to sell the other0s products or ser!ices and to use their name, sales literature, trademar s, copyrights, etc. in a limited manner. 3'. $i'uidity - the percentage of an enterprise0s assets that can be quic ly con!erted into cash. 4(. $ong Term Assets - .sometimes called fixed assets/ these are usually non-liquid assets that are integral to the enterprise0s day to day business operations such as plants, equipment, furniture and real estate. 41. $ong Term $iabilities - all debts that are not current liabilities, that is, debts that are not due until at least one calendar year in the future. 42. &arket $i#e Cycle - the period of time that a substantial segment of the buying public is interested in purchasing a gi!en product or ser!ice form. 43. &arket Penetration Pricing Strategy - if near term income is not critical and rapid mar et penetration for e!entual mar et control is desired, then you set your prices !ery low. 44. &arket Share - the percentage of the total sales .from all sources/ of a ser!ice or product represented by the sales made by your enterprise. i.e. your sales di!ided by total sales 4". &aterial Goods - normally raw or processed materials such as coal or steel that will become part of the purchaser0s end product. 4#. ,et Pro#it - total re!enues less total expenses. 4$. ,et -orth - assets minus liabilities. 4&. .n-Site Sales &ethod - selling directly to the end user using a sales force that calls on the prospect at their home or place of business. 4'. Partnership - a legal relationship between two or more indi!iduals to conduct a specifically defined business. "(. Parts/Sub Assembly Goods - products that will normally become a part of the purchaser0s end product. 3xamples are screws, bolts, transistors, printed circuits, electric motors, forgings, castings, etc. "1. Personal Service at Customer)s Site - this ser!ice can be a one-to-one or one-to-many relationship between the ser!icer and customer, sometimes dealing with factors that the

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customer deems confidential. +he ser!ice is traditionally pro!ided at the customer0s enterprise. 3xamples of this type of ser!ice would be: tutoring, consulting, etc. "2. Personal Service at Servicer)s Site - this ser!ice is usually a one-on-one relationship between the customer and ser!icer, often dealing with factors the customer deems confidential. +he ser!ice is traditionally pro!ided at the ser!icer0s enterprise. 3xamples of this type of ser!ice would be: doctor, lawyer, accountant, educational institution, etc. "3. Personal Service* +olume - some ser!ices deal with !ery high !olumes but still require the *personal touch*. 3xamples are airline ser!ices or a parcel deli!ery ser!ice li e %ederal 3xpress. "4. Pro #orma - financial forms .in!oices, 567 statements, balance sheets, etc./ based on future expectations. "". Product Bene#its Advertising - a *product benefits* ad is designed to acquaint the prospect with the strengths of the product or ser!ice and the benefits resulting from those strengths. "#. Product Comparison Advertising - a *product comparison* ad compares the features of your product or ser!ice with those of one or more competiti!e products or ser!ices with the intent of showing yours to be more feature rich than the competition. "$. Product amily Advertising - a *product family* ad is designed to con!ince the prospect that they ha!e a wide range of functionality to choose from today and after they buy they will not be loc ed into a single product or ser!ice en!ironment in the future. "&. Production Capacity - the !olume of products or ser!ices that can be produced by an enterprise using current resources. "'. Pro#it &argin - total re!enues less total expenses #(. Proprietary Technology - technology that is unique and legally owned by an enterprise. +he technology may be integral to the product or ser!ice being offered or it may be used in the production of the product or ser!ice. #1. Pull Promotional Strategy - a process that requires direct interface with the end user of the product or ser!ice. 8se of channels of distribution is minimi,ed during the first stages of promotion and a ma2or commitment to ad!ertising is required. +he ob2ecti!e is to *pull* the prospects into the !arious channel outlets creating a demand the channels cannot ignore. #2. Push Promotional Strategy - a process of maximi,ing the use of all a!ailable channels of distribution to *push* the product or ser!ice into the mar etplace. +his usually requires generous discounts to achie!e the ob2ecti!e of gi!ing the channels incenti!e to promote the product or ser!ice, thus minimi,ing your need for ad!ertising. #3. Retained Earnings - profits retained by the enterprise rather than disbursing to the shareholders. 9etained earnings are used to impro!e the !alue of the enterprise through de!elopment and )or promotional programs. #4. R." - .9eturn on 1n!estment/ :et 5rofit di!ided by :et ;orth. - financial ratio indicating the degree of profitability.

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#". Service/Product &i( - this business, while in!ol!ing both ser!ice and product, is distinct in that the quality of the ser!ice is often more important than the product recei!ed. 3xamples of this type of ser!ice would be: fast food, catering, telephone, etc. ##. Sel#-Service Retail Sales &ethod - selling from a sales outlet directly to the end user, usually at prices lower than full retail price. +here are usually no sales personnel to explain the purpose and !alue of the product or ser!ice. #$. Service Goods - goods !iewed by the consumer as competiti!e products offering a standard *ser!ice* and are basically similar, so they will *shop* to get the best price. +his would include such products as lawnmowers, refrigerators, tele!ision sets, automobiles, etc. #&. Skimming Pricing Strategy - if you desire quic cash and ha!e minimal desires for significant mar et penetration and control, then you set your prices !ery high .this is sometimes called *s imming*/. #'. Sole Proprietorship - an enterprise that is owned by a single indi!idual. $(. Specialty Goods - goods that appeal to a large segment of the buying public and are considered *special* enough that the consumer will specifically as for the product. %or instance, if you in!ented a cigarette that tasted good and was also pro!en to be good for your health, people would probably as for the *healthy cigarette* .e!en if they didn0t now the name/. +he type of product is not the issue, but rather whether the product is *special* enough that the consumers will *see it out.* $1. Strategic Relationships - an agreement between two or more enterprises to conduct specified business processes in a 2oint manner. 8sually related to technology de!elopment and)or mar eting and distribution efforts. $2. Supplies Goods - production support products that will not become a part of the purchaser0s end product. 3xamples are drill bits, machine lubricants, wiping rags, etching chemicals, pencils, paper, paper clips, etc. $3. Trademark - the name of a product or ser!ice that has been legally registered as the property of an enterprise. $4. 0nsought Goods - products that are usually purchased due to ad!ersity rather than desire. %or example, coffins, crutches, and medicine are all unsought goods. -nother form of unsought goods are products such as life insurance and encyclopedias. +hey are products that the consumer seldom goes out loo ing for, therefore, a constant, aggressi!e selling process is required. $". +ertical "ntegration - the potential within an enterprise to incorporate all aspects of management, production, sales and distribution into their business operations. 1n theory, the greater the !ertical integration, the less !ulnerable an enterprise is to outside forces. $#. -holesale Sales &ethod - selling to distributors at significantly discounted prices who in turn sell to full ser!ice or self ser!ice retail outlets.

$$. -orking Capital - the cash a!ailable to an enterprise for day-to-day operations.

Terminologi &ana1emen Bisnis 2"nggris3 -orking Capital

Terminologi &ana1emen Bisnis 2"ndonesia3 <odal er2a

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