If you have finally mustered all the strength and the confidence to launch a startup in tech or any other field, then you are on your way to the top percentile of business owners. Being successful in business is tough and statistics show that more than fifty percent of startups close down within two years after their inception. In most cases, the problem isn’t the lack of a unique idea but more of poor management.
As the founder of a business, you will find that you will have to make many tough decisions and since you may not be a business major graduate, it could be hard for you to catch up with investors or partners in meetings when they throw big words or abbreviations that may seem alien.
Fortunately, it isn’t a mistake that you don’t know all those terms, but it will be a bigger mistake if you ignore the terms after the meeting. For your business to succeed, you should open yourself up to new things by engaging in continuous learning. This article is for you with big business ideas and a startup baking but without much information on the basic business terms in the entrepreneurial world. The most important terms and acronyms include:
- ROI (Return on Investment)
This is the measure of the effectiveness of the investment you have made in your company. This is a mathematical unit that tells of the value of the investment. The return on investment is calculated by subtracting your gains from the investment from the cost of the amount input in the investment. The difference is divided by the cost of the investment and the solution to that gives the ROI.
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- CPA (Cost Per Acquisition)
Other experts call this fiscal measure the pay per acquisition (PPA). Regardless of the name, this is an online pricing model for advertisements. This is; the amount paid by an advertiser for specified acquisition. It is an important metric that matters when tracking sales made from advertising. To know how much you pay to get a customer who pays for your product, you need the CPA. It is therefore crucial in determining the true returns on investments and the revenue generated.
- COGS (Cost of Goods Sold)
COGS refers to the exact and the direct costs that are attributed to the production of the company’s products. COGS include the cost of materials used, and the direct labor costs. Distribution and sales costs aren’t included in COGS. It is included in the income statement and deducted from revenue when calculating your company’s gross margin.
- The KPI (Key Performance Indicator)
This is the index used to calculate or to measure the success of your business. Different companies use different metrics in determining their business’s performance. While some businesses use customer loyalty to measure KPI, others use the business’s net revenue.
KPIs demonstrate how your business is effective in achieving the objectives that you set out to achieve when starting the business. The metrics used to measure success vary with the industry the business. For accurate results, you should have software to track performance on a dashboard. Remote DBA experts use similar KPI reporting tools to measure the performance of software applications and cloud hosting systems
- DBA (Doing Business As)
This is basically the name of your company rather than the name you have registered your company in officially. It is the informal name that your customers know your company as and thus should be simple and desirable.
In the tech world, DBA has a totally different meaning. When discussing strategy with your tech team, you will hear the acronym DBA used often. DBA stands for Database Administrators. To cut down costs and to operate effectively, your business will probably have some or all its operations on the cloud. A DBA from the cloud hosting company will be needed to ensure that everything runs effectively and there are minimal downtimes.In-house and remote DBA experts ensure that errors are rectified in time and that you can access business data easily from any location.
- CSR (Corporate Social Responsibility)
CSR refers to practices and initiatives undertaken by your company to benefit the society. CSR practices include environmental efforts, ethical labor practices, philanthropy, or volunteering in areas of concern without expecting anything in return. CSR is important in creating sustainability through creation of value for society and the company.
- CRM (Customer Relationship Management)
These are the strategies, practices, or technology used by your company to analyze and manage data and customer interactions throughout your customer’s purchase lifecycle. The tools and strategies utilized help to bolster positive relationships with clients resulting in higher sales and business growth. Some of the most common CRM systems include websites, emails, social media platforms, direct mails, live chats, marketing campaigns and materials, and telephone calls.
- UI (User Interface)
The user interface refers to the design and the aesthetics of your products. The look and feel of your company website, goods, marketing tools, and the general presentation of your business to your clients and how these systems engage with the users refers to the user interface. The interactions of a customer when using your mobile or web applications is the UI.
- UX (User Experience)
This refers to how easy it is for a customer to use your products or navigate your website. The technical elements of a website or a mobile application should have customers in mind during development and design to ensurethat a customer goes through the purchase or search process with ease. UX is also called the user experience design and it takes into account the analytics and technicalities of the company.
- POS (Point of Sale)
As you run things, you will need to know when and where a transaction transpired. The Point of Sale software will moderate the transactions making analysis of sales data and history easy. Future adjustments can be made easily with these POS details.
In conclusion, these finance, tech, marketing, and general operations terms are essential for you to know how to run and analyze the performance of your business. Take your time to know these and many other terms and strategies to run a successful startup.
Sujain Thomas is a freelance writer for startup tech firms. She is a professional DBA and works with a team of professional remote DBA experts by outsourcing their services. Check out her blog for more business insights.