Definitions for Business

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1 Definition of Definition:

A statement of the exact meaning of a word(s), especially in a dictionary. An exact statement or description of the nature, scope, or meaning of something.

2 Definition: Best Practice:

A structured process to make sure things happen the right way, on each and every occasion.

3 Definition Empirical:

Based on, concerned with, or verifiable by observation or experience rather than theory or pure logic. (English Oxford Dictionary)

4 What is learning by definition?

The acquisition of knowledge or skills through study, experience, or being taught, in order to explain a process, statement, action or a function by a specific form of words which explains the exact meaning in plain English. Definitions must ideally include a graphical description to support the text. Definitions must be based on our experience rather than the theory of others.

5 Definition of a Business:

Anyone carrying on an activity that earns them a profit is doing business or running a business, and perhaps this is why there is a misconception that business and company is the same thing.  (Wikipedia).

6 Definition of a Finance Director:

A person who oversees a company's monetary resources and all processes relating to creating, measuring and sustaining realistic company-wide targets.

7 Definition Prime Objective of any business:

To generate acceptable and sustained profits in order to satisfy, stakeholders, directors, and shareholders.

8 Definition Change:

To make or become different.

9 Definition Improvement:

A change for the better.

10 Reasons for resistance to change:

One’s mind can often struggle to understand the things that one’s eyes have not yet seen. (Alastair Stone). 

11 Definition Key Performance Indicators (#KPIs):

Specific empirical results of performance within the process which achieves the applicable target.

11a KPIs Explanation: KPIs should only measure:

  • the effectiveness of a structured process to achieve a specific task and/or
  • performance of people (or machines/technology) who complete specific tasks within a structured process which in turn produce the required result. Results are the sensitive areas within the business.

11b KPI Examples: The number of sales generated from responses from potential customers. The number of finished products created from the various raw materials and processes. The number of new employees recruited from responses to a recruitment campaign. The amount of profit per unit of goods or services sold. The cost per lead, appointment, sale from the marketing spend on specific marketing activity. The profit generated from the time spent plus the cost of purchasing or manufacturing or creating the goods or services being sold.

11c KPIs - Improvement Potential: Improvements can only be made changing for the better processes and/or people’s behaviour who operate within a process. (or the functionality of machinery/technology).

11d KPIs - Points to Note: Certain events, which cannot be changed for the better, may need to be measured.

Examples

  • How currency exchange rates affect profit or the affordability by potential customers.
  • How bank base rates affect profit or the affordability by potential customers. In such instances, these can only be defined as Key Performance Measures NOT Key Performance Indicators.

11e KPIs - a Sensitive Area: A part of the business (or a structured process) where a small change in performance leads to a large change in the outcome, often referred to as a marginal gain. When considering all of the above relating to KPIs, there can be no such thing as 2nd or 3rd level KPIs because all sensitive areas should produce a specific mission-critical result.

11f KPIs - ROI Marketing: to measure the degree to which spending on marketing contributes to profits.

11g KPIs - Structured Sales Process: A clearly defined step by step process which a salesperson must take, in order to achieve the highest possible sales closing ratios. It must also include tangible and measurable results to identify where attrition took place, because it is not only is it a matter of what your salespeople sell, that is important, to identify and measure what they don’t sell and why. A structured sales process is often referred to as a Sales Funnel.

11h KPIs – Reverse Engineering Sales Conversion Ratios: A mathematical calculation to establish the number of potential clients a salesperson MUST interact with, to guarantee to hit a target. The formula must take into account a comparison of an individual salespersons closing ratio/sales targets. If a salesperson speaks with 10 potential customers and only sells to two, and their sales target is 40, this means that this salesperson must speak with 200 potential customers to guarantee hitting target. Knowing how many potential customers a salesperson MUST interact with is mission critical information not only for a sales person but also management.

12 Definition Maximum Profit:

The most the customer is prepared to pay.

13 Definition Misrepresentation:

A statement of misinformed opinion, or an unqualified prophecy of the future. Explanation: Often the result of individuals telling others something, without first establishing specific facts or information – individuals making it up as they speak.

14 Definition Business & Financial Modelling:

Provides decision makers with a tool to help make better informed commercial and financial decisions from a bespoke presentation of business data that is a facsimile of the business and how it works in order to identify the sensitive areas that must be measured. (Richard Stone). 

15 Definition Situational Awareness:

Situation awareness involves being aware of what is happening in the vicinity to understand how information, events, and one's own actions will impact on goals and objectives, both immediately and in the near future. (Wikipedia).

15a Example: Situation awareness is especially important in work domains where the information flow can be quite high and poor decisions may lead to serious consequences (such as piloting an aeroplane, functioning as a soldier, or treating critically ill or injured patients) or especially when running a company or business Situation Awareness has been recognised as a critical, yet often elusive, foundation for successful decision-making across a broad range of complex and dynamic systems and processes.

15b Dangers of losing situational awareness within a business: Not maximising profit, poor sales performance, high marketing costs per sale, lack of manufacturing efficiency, misrepresentation, high levels of staff churn, low self esteem of employees, going out of business, being unable to secure funding for expansion, failing with developing International Trade, high costs for goods or services, leading to losing the competitive advantage.

15c Dangers of losing situational when designing and building a website: Low response levels from new potential customers, not being ranked in search engines, potential customers can’t find your website, not being able to use your website as a sales tool to leverage screen sharing technology, high bounce rates, website not being a trusted resource, low online sales, website is a waste of money as a marketing platform if potential customers can’t find you.

15d How to prevent losing situational awareness within a business: Engineer effective, company-wide structured processes & re-engineer recruitment processes to find and keep good people & deliver structured training programmes relative to the job descriptions of every employee & implement company-wide KPI reporting procedures & implement weekly management KPI meetings for every department. Definition: Insanity: Doing the same thing over and over again and expecting different results. (Albert Einstein).

16 Lateral Thinking Phrases:

  • If your process is wrong, your KPIs will be wrong and you will get the wrong information.
  • When constructing KPI reporting solutions, the devil is in the detail when planning data input, the KPIs should be generated automatically.
  • Model first, KPI second, apart from marketing sales and recruitment.
  • What answers are you not getting, that you want to have now?
  • Financial data is not a KPI.
  • KPIs measure process and people’s behaviour, nothing else.
  • If your KPIs do not measure process and people, then they are not KPIs they are KPMs (Key Performance Measures).
  • KPIs should only measure processes you can change and also take into account the effect the individual's behaviour has on the process.
  • If you measure solely on turnover, then you are missing several tricks.
  • When modelling simulate to validate.
  • If KPIs are linked to a model, then you can simulate performance before it happens (on the basis people perform to minimum standards).

17 Useful Headings for most Job Descriptions:

Insert the text underneath each heading.

  • The main purpose of the job. (ideally one bullet point).
  • Limits of authority.
  • GDPR instructions.
  • Minimum performance criteria.
  • Main objectives, Key Tasks and Responsibilities.
  • Review method.
  • Hours of work.
  • Pay plan.

18 Definition Human Resources Management

Good Human Resources Management (HRM) enables the competitive success of an organisation or business through effective application and management of robust policies and processes observed by workers in a rewarding workplace environment. (Emma Morris). 

19 Definition Turnaround

Is the strategy, planning and execution of a successful plan that transforms a financially struggling business or company into a robust, successful and profitable one. (Robert Williams).

 

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