At Bplans, it's our goal to make it easy for you to start and run your business. The Bplans glossary of common business terms will help you learn about key small business and entrepreneurship topics.
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Variable costs are costs that fluctuate in direct proportion to the volume of units produced. The best and most obvious example are physical costs of goods sold, direct costs, such as materials, products purchased for resale, production costs and overhead, etc. The concept of variable cost is an important component of risk in a company,... Read more »
Channel conflicts refers to a situation where one or more channel members believe another channel member is engaged in behavior that is preventing it from achieving its goals. Channel conflict most often relates to pricing issues. Read more »
The balance sheet is a snapshot of your company’s assets, liabilities, and owner’s equity, and is one of 3 essential financial statements. Read more »
Break-even point is output of the standard break-even analysis. The unit sales volumes or actual sales amounts that a company needs to equal its running expense rate and not lose or make money in a given month. The formula for break-even point in units is: The formula for break-even point in sales amount is: =... Read more »
Plant and equipment is the same as long-term, fixed, or capital assets. These are generally assets that are depreciated over terms of more than five years, and are likely to last that long, too. Read more »
Product line pricing refers to setting of prices for all items in a product line involving the lowest-priced product price, the highest price product, and price differentials for all other products in the line. Read more »
Long-term interest rate is the interest rate charged on long-term debt. Read more »
Cost of sales refers to the costs associated with producing the sales. In a standard manufacturing or distribution company, this is about the same as the cost of the goods sold. In a services company, this is more likely to be personnel costs for people delivering the service, or subcontracting costs. This term is commonly... Read more »
Obligations incurred are business costs or expenses that need to be paid, but wait for a time as accounts payable (in other words, bills to be paid as part of the normal course of business) instead of being paid immediately. For more on the subject, see our article on the LivePlan blog: What Is Accounts... Read more »
SCORE is a no-cost consulting and resources service offered through the Small Business Administration. Read more »
Collection days is supposed to represent the average number of days business waits, on average, between delivering an invoice and receiving payment. The formula for calculating collection days is: =(Accounts_receivable_balance*360)/(Sales_on_credit*12) Read more »
Co-branding is the pairing of two manufacturer’s brand names on a single product or service. For more on branding, see our Branding Guide. Read more »
Your company’s brand includes your business name, logo, sign, symbol, design, or a combination of all used to differentiate your goods or services from competitors. See our complete guide to small business branding for more on how to build your brand. Read more »
The corridor principle is the principle where an entrepreneurial venture may find that it has significantly changed its focus from the initial concept of the venture as it has continually responded and adapted to its market and the desire to optimize profitability potential. For more on defining your market and target customers, check out How... Read more »
A company whose shares are not publicly traded on a stock market. Such companies usually have less restrictive reporting requirements than publicly traded companies. A company which is not owned by the government (state owned). In contrast, see the entry for a publicly traded company. Our complete guide to choosing your business structure is good... Read more »
Integrated marketing communications is the practice of blending different elements of the communication mix in mutually reinforcing ways. Check out our article on the outline for a marketing plan to help you think through your marketing efforts. Read more »
Also called income or profits, earnings are the famous “bottom line”: sales less costs of sales and expenses. For more, check out our article on the LivePlan blog on net profit, as well as our free Profit and Loss Template. Read more »
A market refers to prospective buyers, individuals or organizations, willing and able to purchase the organization’s potential offering. To learn more, check out How to Do Market Research and How to Define Your Target Market. Read more »
In online marketing, user registrations is a conversion value measuring the number of website visitors who voluntarily include themselves in your database in order to access the content you provide on your website. See the entry on website metrics for more. Read more »
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