Glossary

The following is a simple glossary of key terms used throughout KNEXT or often business terms.

If you encounter a term not defined, you can stub the term by adding it to the list.

0–9

Test - This is a test to see how content would be created for this page. I've included a hyperlink to the WCD Microsite located here to test how it works.

A

• ABC Method - method of inventory control that divides items into A, B, and C groups based on their importance to the business; most attention is then devoted to the A, or essential, items
• Absolute Net Lease - A lease in which the tenant agrees to a pay a basic rent and be responsible and separately pay for all maintenance, operating, and other expenses of the building or office
• ACA (Affordable Care Act, also know as Obamacare) - a 2010 law that expanded Medicaid eligibility, established health insurance exchanges, and prohibited health insurers from denying coverage due to pre-existing conditions
• Accounts Payable - A company liability that represents amounts due for goods or services purchased on credit.
• Accounts Receivable - Money due to a business from clients and customers; outstanding invoices
• Accrual Method - Method of accounting in which income and expenses are recorded as they occur regardless of whether or not cash has actually changed hands
• Accrued Expenses - Expenses that have been accounted for on the income statement but that have not yet been paid
• Affiliate - A company that sells another company's products or services on its site for a commission
• Alternative Dispute Resolution (ADR) - A way of resolving disputes without resorting to litigation
• Amenities - Any material goods, services, or intangible items that increase the comfort, attractiveness, desirability, and value of an office suite or building
• Americans with Disabilities Act (ADA) - law passed in the 1990 that prohibits employers with 15 or more employees from refusing to hire people with disabilities if making "reasonable accommodations" would be enable the person to perform the job
• Angel Investor - A private individual who invests money in a business
• Assemblage - the combining of two or more contiguous properties into one large property; an assemblage will often make the one large property more valuable than the separate parts
• Assessment - The determination or setting of a tax or other charge based on a building estimated value
• Asset - Tangible or intangible object of value to its owner
• Asset Acquisition - A method of buying a business in which the buyer purchases only those assets of the business he or she wants
• Asset Remarketers, Asset Remarketing Companies - Firms that work with equipment leasing companies to resell repossessed office through a network of dealers and wholesalers as well as directly to business owners
• Attornment - A lease provision that the tenant agrees, in advance, to accept and pay rent or other required payments to a new landlord or legal owner

B

• Business-to-Business Sales (B2B Sales) - Marketing your products and services to other businesses as opposed to individual consumers
• Balance Sheet - A "snapshot" of the assets, liabilities, and owner's equity of a business for a given period
• Balloon Payment - A large payment (the balloon) at the end of a lease
• Base Salary - Fixed compensation for services paid to a person on a regular basis
• Batch Counter - Feature on a letter-folding machine that prevents the machine from folding too many sheets together
• Binding Arbitration - Form of ADR in which the arbitrator's decision is legally binding
• Binding Letter of Intent - A letter of intent would be upheld in a court of law as the actual leasing space by the tenant from the landlord and by the landlord to the tenant regardless of whether an actual lease document was agreed to or signed
• Bluetooth - A short-range wireless protocol for transferring voice and data among cell phones and computing devices; most smartphones can use it, and some printers, laptops, and tablets also can connect via Bluetooth
• Bonding - A guarantee of performance required either by law or consumer demand for many businesses, typically general contractors, temporary personnel agencies, janitorial companies, and businesses with government contracts
• Bonus - A sum of money in addition to salary that's part of total compensation
• Brand Audit - Examining your brand from every angle to see how well it's working
• Brand Equity - The dollar value your brand generates over decades in the demand it drives and the customer loyalty it creates; brand equity for a very large, well-known company like Nike translates into billions of dollars
• Branding - Your company's reason for being; the synchronization of all aspects of your company that leads to consistency and creates value around your product or service
• Brandmark - The illustration that distinguishes your company; in other words, your logo
• Brand Position - How your customers view your brand in relation to the competition
• Brand Promise - How you tell customers about the most important benefit of your product or service, who in turn should be able to connect this benefit right back to your product
• Brand Strategy - A written plan for applying your brand strategically
• Broker - An insurance agent who represents many different insurance companies
• Browser - Software used for navigating the web
• Building Standard Work Letter - A list and/or detailed specifications of the construction items (both quantity and quality) that will be provided by the developed to be used in building out a tenant's office space
• Business Broker - A person who helps buy and sell businesses, similar to a real estate broker
• Business Incubator - For a small fee, business incubators provide office space, services such as answering phones, and access to equipment like copiers and fax machines; incubators also provide startup help, such as marketing and accounting assistance
• Business Interruption Insurance - Pays for the cost of repairing or rebuilding a business, as well as income lost, while the business is out of commission
• Business Opportunity - Legal definitions vary; in its simplest terms, a business opportunity is a packaged business investment that allows the buyer to begin a business
• Business Plan - A set of materials which outlines the goals of a business and the how it will go about achieving those goals. This would usually include operations, market, financing and other areas.

C

• CAP Lines - sponsored by the SBA, a collection of revolving and nonrevolving lines of credit for business investment that allows the buyer to begin a business
• Cash-flow statement - the financial statement that reflects all inflows and outflows of cash resulting from operation, investing, and financing activities during a specific time period
• Cash method - method of accounting in which books are kept based on the actual flow of cash in and out of the business
• Casual contact networks - general business groups that allow many people from various overlapping professions
• Certified Development Companies (CDCs) - nonprofit intermediaries that work with the SBA and banks to make 504 Loans available to entrepreneurs
• Chadder - type of letter-opening machine that cuts one-eighth of an inch from the end of the envelope
• Chargeback - when a customer purchases an item using a credit card and then returns it, this is called a chargeback
• Chart of accounts - the list of accounts that are tracked within the general ledger
• Chattel-mortgage contract - type of credit contract used for equipment purchase in which the equipment becomes the property of the purchaser on delivery, but the seller holds a mortgage claim against it until the contract amount is fully paid
• Closed-end lease - type of equipment lease in which no money is owed when the lease period ends; the lessee simply turns in the equipment and walks away
• Cohort marketing - marketing to people based on the groups or "cohorts" they were part of during their formative years
• Collateral - anything of value that can be pledged against a loan, including stocks and bonds, equipment, home equity, inventory, and receivables; if you cannot repay the loan, the lender will look to your collateral as a backup source of payment
• Commissioned financial planner - financial planner who receives commissions on products he or she sells
• Common stock - stock representing equity ownership in a company; it entitles the holder to elect corporate directors and collect dividends
• Community service clubs - unlike more business-oriented groups, service groups aren't set up primarily for referral networking; their activities are focused on service to the community
• Competitive analysis - section of a business plan that assesses the competition's strengths and weaknesses
• Conditional sales contract - type of credit contract used for equipment purchase in which the purchaser does not receive title to the equipment until it is paid for
• Consolidated Omnibus Budget Reconciliation Act (COBRA) - law requiring employers to extend health insurance coverage to employees and dependents beyond the point at which such coverage traditionally ceases (such as the termination or death of the covered employee)
• Consumer - an individual who purchases services or products from a business
• Contiguous office space - office suites adjacent to each other or having a common demising wall
• Cookie - a piece of data given to your browser by a web server when you visit a web page; the browser stores the cookie in a file and sends a message back to the server each time you revisit that web page
• Corporation - a legal entity that's separate and distinct from its owners
• Cost accounting - the process of allocating all direct and indirect expenses associated with the production and/or sale of a product
• Cost of goods sold - the cost that business incurs to produce a product for sale to its customers
• Count cycle - the period at which you count your inventory; a four-week count cycle means you count inventory every four weeks
• Co-working space - an office environment in which members pay dues for access to work space, equipment, and on-site networking opportunities
• CPA (certified public accountant) - an accountant who has passed a nationally standardized exam in accounting
• CPM (cost per thousand) - figure that tells you how much it costs to reach 1,000 potential customers with a given form of advertising
• Credit - the right-side entries in a double-entry accounting system
• Cross-training - training employee to fill more than one position
• Crowdfunding - the use of small amounts of capital from a large number of individuals to finance a new business venture
• Cure provision - part of the default section of a promissory note, the cure provision allows you a certain amount of time (usually ten days) to remedy a default after you've been notified
• Current maturities of long-term debt - the portion of long-term debt that is due in one year or less

D

• Debit - the left-side entries in a double-entry accounting system
• Debit card - a card that can be used to debit money directly from the customer's checking account
• Debt financing - capital in the form of a loan, which must be paid back
• Deductions - business and other expenses that reduce your income
• Delivery cycle - the time it takes for inventory to be delivered; a ten week delivery cycle means inventory takes ten weeks to arrive
• Depreciation - allocation of the cost resulting from the purchase of a fixed asset over the entire period of its use
• Design and development plan - section of a business plan that describes the product's design and charts its development within the context of production, marketing, and the company itself
• Direct mail - any form of advertising material that's mailed directly to potential customers, including catalogs, brochures, letters, fliers, postcards, and newsletters
• Direct writer - an insurance agent who represents one insurance company
• Disability insurance - pays a fixed percentage of average earnings if the insured is unable to continue working due to disability
• Discount rate - the actual percentage the merchant is charged per credit card transaction by the credit card company or bank; the discount rate is based on sales volume, risk, and other factors
• Disguised dividend - total compensation in the form of salary, bonus, and prerequisite that is judged to be excessive by the IRS
• Distribution - means of getting product to the end user; describes entire process of moving product from factory to end user
• Dividend - distribution of a portion of a company's earnings, determined by the board of directors, to a class of its shareholders
• Dollar-control system - tracking system where sales receipts are compared with delivery receipts to determine the cost and gross profit margin on inventory items
• Domain name - the words or phrases a user types into their browser to go to a website, such as www.[YourWebsiteName].com
• Double-entry accounting - a system of accounting in which the total of all left-side entries is equal to and offset by the total of all right-side entries
• Downline - the group of sales representatives that a given sales rep has recruited to join a multilevel marketing system; the rep receives a percentage of their sales
• Due diligence - the process of investigating legal, financial, and other aspects of any business deal (such as buying a business) before the deal is completed

E

• Easement - the right of an individual or entity to use the land of another individual or entity, usually for a specific purpose
• Ecommerce - the process of conducting business on the internet and accepting credit cards or other forms of digital payments (using PayPal, for example)
• Email auto responder - an automatic email response generated by the web server in response to a customer's email inquiry
• Employee leasing company - company that administers personnel functions for clients and "leases" the client's employees back to them; also known as a professional employer organization (PEO)
• Employee stock ownership plan (ESOP) - a plan that gives employees shares of stock in a company
• Employment practices liability insurance - an optional part of workers' compensation coverage, this protects the corporation from being sued for acts of individual employees (such as in a sexual harassment case)
• Empowerment zones/renewal communities - designated economically disadvantaged zones that offer state and/or federal tax breaks and other incentives to businesses that locate there
• Engagement letter - letter of agreement between a lawyer or an accountant and his/her client that spells out the terms
• Equity financing - capital received in exchange for part ownership of the company
• Errors and omissions liability coverage - protects professionals, such as consultants or accountants, from damages resulting from an error or omission in their work
• Escalator(s) - term used to describe how a tenant's payment for rent or service shall increase
• Executive search firm - company that recruits executive, technical, or professional job candidates for client companies; also called recruitment firm or headhunter
• Executive summary - the opening section of a business plan; describes the business, product, or service in brief
• Expense - money spent for goods or services

F

• Factors - companies that buy businesses' accounts receivable
• Family and Medical Leave Act (FMLA) - law requiring certain employers to give employees 12 weeks of unpaid leave for the birth or adoption of a baby or the serious illness of the employee or a close family member
• Fee-for-service planner - financial planner who charges a fee for making recommendations on what you should do to achieve your financial goals
• Financial budget - a projection of future financial performances
• First in, first out (FIFO) -method of inventory accounting that assumes items purchased first are sold first
• Fixed assets - assets that are not bought and sold in the normal course of business but that are purchased for long-term use in the production or sales process
• Focus group - type of primary market research where a group of potential customers (typically five to 12 of them) come together in an informal environment, under the guidance of a moderator, to discuss a product or service
• Franchise disclosure document (FDD) - a disclosure document franchisors are legally required to provide to prospective franchisees
• Franchisee - a person who buys a system of doing business from a franchisor
• Franchisor - a person or company that sells a system of doing business to franchisees and provides them with ongoing training and support
• Fulfillment - shipping and handling of sales orders

G

• General ledger - the main records of the assets, liabilities, owner's equity, income, and expenses of an organization
• General liability coverage - insures the business against accidents and injuries that happen on its premises as well as exposure to risk related to its products
• Generational marketing - marketing to consumers based on social, economic, demographic, and psychological factors
• Gross profit margin - the percentage of gross profit realized on goods sold after subtracting cost goods sold from sales
• Guarantee and surety agreement - for businesses with insufficient operating history or assets on which to base a loan, banks will require the loan to be guaranteed with your personal assets, such as the equity in your home, in a guarantee and surety agreement

H

• Health Maintenance Organization (HMO) - a prepaid health-care arrangement, where employees must use doctors employed by or under contract to the HMO and hospitals approved by the HMO
• Health savings account (HSA) - savings account that allows workers with high deductible health insurance to make pretax contributions to cover health-care costs
• Hold harmless and indemnify - a clause in a contract that protects one party to a business purchase from being held responsible for results of the other party's actions prior to the purchase
• Holdover rent - an extremely high rent intended as a penalty to a tenant who continues to use or remain in possession of a leased premises beyond the lease term
• House list - the mailing list a business develops in-house, comprised of names and addresses collected from current or potential customers

I

• Income - money received for goods or services produced or as a return on investment
• Income statement - a financial statement that charts revenues and expenses over a period of time
• Installment loan - a loan that is paid back with equal monthly payments covering both principal and interest
• Intangible asset - an asset of a business such as patents, franchise rights, and goodwill that does not physically exist but that has value to the business
• Intellectual property - a nontangible property, such as a trade secret, patent, or trade name, to which one has legal rights
• Interim loan - a short-term loan intended to maintain a company's operations while it makes arrangements for longer-term financing
• Internal control - a system that is designed to minimize the risk of financial loss due to incompetence or dishonesty of an employee or an outside bookkeeper
• ISP - an acronym for internet service provider; see online service

J

• Job description - an outline of how a job fits into the company, listing broad goals, and basic responsibilities
• Job specification - more detailed than a job description, this describes the job but also lists specific education, experience, skills, knowledge, or physical requirements for performing the job
• Jogger - mechanism on a letter-opening machine that helps settle contents of envelopes so they don't get cut

K

• Key person insurance - life insurance policy taken out on "key people" in the company, where the beneficiary is the company; proceeds are used to buy out the deceased's shares or ownership interest in the company

L

• Last in, first out - method of inventory accounting that assumes most recently purchased items are sold first; allows business owner to value inventory at the less expensive cost of the older inventory
• Laundering - the practice of depositing one merchant's sales slips through another merchant's account; it is illegal in many states and prohibited by Visa and MasterCard
• Leasehold improvements - the construction, fixtures, attachments, and any and all physical changes and additions made to lease premises by the tenant (with or without the landlord's permission), or on the tenant's behalf by the landlord or a representative (e.g., subcontractor) of the tenant
• Leasing agent - an individual who specializes in leasing commercial real estate, including office, retail, and industrial space; a leasing agent must work for a principal broker and be licensed
• Letter of credit - a letter from a major customer showing that the customer has contracted to buy from you; can be used in establishing relationships with suppliers
• Letter of intent - an agreement signed by both tenant and landlord prior to the lease, setting forth primary terms, conditions, and considerations that are to form the basis of the lease
• Liability - an obligation to another party
• Liability of landlord provision - a lease clause severely limiting the landlord's liability for use of the building and office space by tenants, guests, employee, visitors, etc.
• Life-stage marketing - marketing to consumers based on what they are doing at a given period in life, such as having children, buying a home, or retiring
• Line-of-credit loan - a short-term loan that extends the cash available in your business' checking account to the upper limit of the loan contract
• Liquidation preference - stockholders with liquidation preference are first in line to recover their investment if the company goes under
• List broker - company that locates and arranges the rental of direct mail and email lists of potential customers to other businesses
• List-rental company - company that rents mailing lists of consumer or business names and addresses
• Loan agreement - written contract specifying terms of a loan
• Long-term debt - the portion of external debt (usually from banks) that is due after one year

S

• Stub - a start to some page or definition, but incomplete and needs work to be of use to others other than to know the question, resource, or term exists.

Notes

• Small Business Association Glossary