Many industries use specific terminology and jargon, and the business industry is no exception. There are many terms that people in business should know since they’re used all the time. Here are some of the basic business terms that every owner should learn.
Business To Business or Business To Consumer (B2B/B2C)
There are two different types of businesses, and they are known as B2B or B2C. B2B is an abbreviation for “business to business”, while B2C stands for “business to consumer.” B2B businesses sell their products to other businesses, while B2C businesses sell their products straight to the consumer. Here is a short example of the differences between B2B and B2C businesses: imagine Business A sells soda and Business B sells flour. Business A sells soda directly to people who drink it, while business B sells flour to another company that makes cakes. In this scenario, Business A is a B2C, and Business B is a B2B.
Return on Investment (ROI)
Another important business term is return on investment (ROI.) The ROI is a number that accountants often use to describe how much you lost or gained from a business compared to the money you spent on it. Accountants calculate the ROI by simply dividing the net profit by the cost of investment.
The break-even point of a business is when the total revenues equal the expenses. Business owners use the break-even point to determine if a business is making a profit. They also use this number to determine how much revenue a business needs before it can make a profit.
Bill of Landing (BOL)
The bill of landing is an important shipping term. It’s one of the eight important freight shipping terms you should know, and it’s often abbreviated as BOL. A BOL is a legal document provided by a shipping carrier that describes the cargo. It provides information such as the types of goods, quantities, and destinations. Additionally, it can also serve as a receipt for those involved in the shipping process.
Proof of Delivery
Another shipping term often used in the business world is proof of delivery, which is abbreviated as POD. A POD is a signed document that people use as proof that cargo reached its destination safely. To be considered a valid document, a POD must be signed and dated by the recipient. Before you sign a POD, always check that all of your cargo is intact.
Another one of the basic business terms that every owner should learn is owner’s equity. Owner’s equity is the owner’s rights to the assets of a business. You can calculate owner’s equity by subtracting the liabilities from assets. When the owners of a business make a withdrawal from the company or the company suffers a loss, this number will decrease. However, when the business profits or the owners contribute money, the owner’s equity number will increase.