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Business Glossary

This business glossary is intended to help entrepreneurs, business owners, and those responsible for company operations better understand business terminology and concepts with unbiased descriptions and helpful resources.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


A

Affirmative Action

Policies that favor members of groups that have been historically discriminated against in American society. Employers are not required to have an affirmative action policy (AAP) unless they are part of certain branches of the federal and state government, or are a company contracted by the government.

Federal statute that significantly overhauls the US healthcare system. Provisions of the act have been taking effect between 2010 and 2020, impacting employers, individuals, insurers, and the government.

Amortization

When an amount decreases, or is accounted for, over a defined period of time. Can refer to a fixed repayment agreement for debt, or the spreading out of capital expenses for intangible assets over a specific period of time for accounting and tax purposes.

Annuity

A financial product where an individual pays a financial institution a lump sum or succession of payments, which the financial institution invests, and then pays out the individual over time, starting at an agreed upon date. Often used as an investment vehicle.

Assimilation

The process of bringing a new hire up to speed on an organization’s culture, people, processes, and objectives so that they can function effectively in their roles. Often addressed as part of an orientation process. Can be referred to as onboarding.

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B

Bureau of Labor Statistics

The US federal government agency that produces data on labor and the state of the national economy. Data includes the Consumer Price Index, the unemployment rate, and the Producer Price Index.

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C

Capital

Financial resources-in the form of money or other assets—that are available for use.

Cash Advance

Arrangement in which a cash advance provider gives a business a lump sum payment in exchange for a share of future sales.

Copyright

A form of legal protection provided to creators of original works in several categories. Copyright protection exists the moment a work is tangibly created. Copyrighted works can be denoted with a © symbol, but the denotation is not required.

Culture

An organization’s collective values and patterns of behavior.

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D

Department of Labor

Department of the federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, and reemployment services. There are also many state-level labor departments.


E

Enterprise

A business or company. Can also refer to a significant undertaking.

Equity

Ownership interest in a company, usually in the form of common stock or preferred stock.

Software that helps manage business processes. Often a suite of integrated applications that collect, store, manage, and interpret data from different departments and enables information-sharing between these departments.

Ethics

Business policies and practices regarding potentially controversial issues, such as corporate governance, discrimination, corporate social responsibility, and fiduciary responsibilities.

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F

Foreign Exchange

The exchange or conversion of one currency to another. Relates to a wide range of transactions as well as the foreign exchange market, which facilitates the trading of currencies.

Fortune 500

The 500 largest US corporations according to total revenue. This list is compiled annually by Fortune magazine.

An Affordable Care Act reporting form, which employers with at least 50 full-time employees must file with the IRS and distribute to employees. The form enables the IRS to determine if such employers offered ACA-compliant health care coverage.

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G

GDP (Gross Domestic Product)

A measurement of a country’s economic activity, based on the monetary value of all the goods produced and services provided within a specific time period.

The interaction and integration of businesses of different countries. This process has been catalyzed by international trade and information technology.

Goodwill

An intangible company asset, usually related to its brand and/or reputation. If a company is acquired, goodwill can account for the delta between its book value (tangible assets) and its purchase price.

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H

An umbrella term that refers to all aspects of managing a workforce, including human resources, talent management, benefits administration, time and labor, payroll services, retirement services, business insurance, Affordable Care Act compliance, and more.


I

Inflation

A sustained increase in the prices for goods and services, measured as an annual percentage.

IPO (Initial Public Offering)

Instance in which shares of a company are sold to institutional investors and then sold of the public on a stock exchange for the first time. Through this process, a private company becomes public.


L

Logistics

The management of things between their point of origin and their point of consumption in order to meet the needs of individuals and companies. Applies to physical items as well as time and information.

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M

Marketing

Activities in which companies communicate the value of their product, service, or brand with the goal of building relationships and ultimately selling their product or service.


N

A global electronic stock exchange for buying and selling securities. Also provides the benchmark index for US technology stocks.

Net Worth

A measure of worth determined by total assets minus total liabilities. Also known as book value or shareholders’ equity.

NYSE (New York Stock Exchange)

A US stock exchange based in New York City. Based on the total market capitalization of its listed securities, the NYSE is the largest equities-based exchange in the world.

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O

Opportunity Cost

A benefit or value that must be sacrificed in order to pursue a course of action. Essentially, when making the choice between two or more options, the opportunity cost is the perceived benefit(s) of the course of action(s) not taken.

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P

Services and/or software that processes payroll for a company. This service includes computing employees’ gross pay, withholdings, and net pay, creating paychecks and managing direct deposit, preparing payroll reports, and preparing payroll tax returns.


R


S

A form of corporation that includes the benefits of incorporation while being taxed as a partnership—passing income directly to shareholders and avoiding double taxation. In order to file as such, companies must meet certain IRS requirements.

Six Sigma

A methodology designed to improve business processes. Originally developed by Motorola and focused on quality control in manufacturing, Six Sigma is now applied as a more general business management approach and offered as a training module by several vendors.

Social media marketing is the process of engaging with potential buyers via social media channels with the goal of increasing brand awareness and/or boosting sales.

Social insurance and benefits provided by the US federal government, which includes retirement income, disability income, Medicare, and Medicaid.

Form of business in which the company itself is not a legal entity, and a single owner is entitled to all profits and responsible for all liabilities.

Stock

The equity stake of a corporation’s owners, divided into shares. May also refer to merchandise available for sale or distribution.

The market in which shares of publicly held companies are issued and traded. Also known as the equity market.

SWOT Analysis

A methodology designed to evaluate a venture or course of action by focusing on perceived strengths, weaknesses, opportunities, and threats.

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T

The process of recruiting and planning for skilled employees. Often influenced not only by immediate labor needs, but also the long-term goals of the company and labor trends within it.

Trademark

A legally registered design, word, or phrase that identifies a product or service as the property of an individual or business. Registered trademarks are denoted with the ® symbol.


U


V

Variance

A measurement of the spread between numbers in a data set. The variance measures how far each number in the set is from the mean, or average.

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W



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