5 acronyms you need to master in business
In the hectic and ruthless world of business, time is of the essence. There are simply not enough minutes in the day to laboriously write things out like “as soon as possible” or “for your information.” If you want to get ahead in business and save time when writing emails, FYI, you should master these acronyms ASAP.
Return on investment. The overall aim of any business is to turn a profit. Business owners must calculate what kind of ROI they will receive to decide whether certain ventures are worthwhile. A straightforward way of understanding this is to imagine you are in a poker tournament. To work out your ROI in a poker tournament, you need to divide your overall profits by the amount you spent on buy-ins. In business, the buy-ins would be things like staff wages and wholesale purchases.
Manufacturer’s suggested retail price. MSRP is the same as RRP (recommended retail price) and is the price that the manufacturer thinks the retailer should sell the product at. The idea behind this is to try to get a standardized price among all the retailers that stock the same product, this can be seen with cars, as there is little variance in price from dealer to dealer.
Search engine optimization. If you want your company to come out higher up in Google search rankings when someone searches for your product, you need to involve some SEO strategy (see above) in your business model. There are companies that specialise in things like keyword analysis and producing content for link building schemes to push your name up the list. Most modern businesses are involved in SEO schemes to aid in the constant struggle to come out above their rivals.
Key performance indicators. This is a metric used to analyze and evaluate factors that are critical to a company’s success. Businesses set targets and then use this metric to calculate how effectively they are achieving their key objectives. There is specific computer software that companies can use to measure KPI, but initially you must acknowledge what type of KPI you need to assess. For example, a sales company will wish to examine how revenue is growing, what the average purchase value is, and how individual products are performing.
Earning before interests, taxes, depreciation, and amortization. This refers to how a company evaluates its performance before these extenuating factors are counted. Uncontrollable things like tax and depreciation are out of the company’s hands, and it is sometimes preferable to analyze how the company is doing before other things are considered. EBITDA is a good way to compare your business’s success alongside other rival companies in your sector. It shows what a company actually receives in revenue and what they can spend on expenses.
As we are reaching the EOD (end of discussion) here, for further reference there are plenty of sites that can offer yet more important acronyms to remember in business. Memorize them, master them, and you will be speaking like a modern, tech-era business owner in no time.
Subscribe to our business newsletter
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.