10 Words and Phrases you should know if you are an Entrepreneur
Being an entrepreneur is difficult. Apart from doing things right, there are several things that might be running through the brain of an entrepreneur. There will be meetings to conduct and conferences to attend, and in the midst of all this, if you don’t know what some words mean, it might probably be a deal breaker in some situations.
As an entrepreneur, you must keep up with certain business terminologies and the lingo that makes round every day. While yes, it is not wise to use these jargons in every speech, email, or in every sentence on your website, but wherever you use them, make sure you are using them correctly.
Now as the Oxford Dictionary keeps adding new words related to entrepreneurship, why not take a look at some of the useful terms that apply to businesses and will also be helpful to you to create an everlasting impression.
- Bootstrapping
“Bootstrap” or bootstrapping is a term which is popularly used when an entrepreneur starts his business with his own savings, or with the money that he has borrowed from his friends and family members to fund his company. This is usually the initial stage wherein the entrepreneur tests the business model, and validates the product before approaching an investor for funds when the startup would then be known as venture funded, rather than being bootstrapped.
- Leverage
This word has a different interpretation, so depending on the context you must apply the meaning. Let’s first see what it means in the financial world. Leverage is the amount of debt that is used to finance a firm’s assets as described by Investopedia. Or in other words, leverage is whenever you are using various financial instruments or borrowed capital to increase the potential return on investment. If that is too hard to understand, then in simple words it is just the amount of money you borrow to run your business. If you have more debt than equity then it will be considered as “highly leveraged”, that is your business will be seen as very risky by the potential investors.
The other meaning, which unfortunately gets used more often than it should be, is taking maximum advantage of. Basically, when you are in control of the things, and can effectively maximize the use of resources and the opportunities, you are leveraging the occasion.
- Traction
Although this word is commonly associated with tires, slippery driving conditions or friction, it has increasingly become a common jargon in entrepreneurship. The term refers to the progress the startup is making and the momentum the firm gains along with the growth. In short, it is as the dictionary defines it, the extent to which a product, an idea, or other things gain popularity. This popularity or the acceptance of the product or idea is usually measured in terms of the customer response and revenue.
- Game Changer
This phrase has its roots in the like words such as innovation and disruption, wherein a person, a company, a product or an idea causes a significant breakthrough in the industry. It is something that causes upheaval in an industry and leads to a movement which takes the related businesses in the same direction. But unfortunately, the term gets used so liberally these days that anything that is a bit different from the rest of the market gets termed as a game changer.
- Prototype
It is nothing but a sample, a demo, a model, or an early release of a product with the main purpose of proof testing the concept, and to get feedback before the actual product gets developed. It does not necessarily have to be a working model, but it can be anything from a sketch on a paper, a real size 2-D or 3D non-working model, to a clickable demo of a website. You can make as many iterations you need to build the next prototype before you come up with the final version of it, which actually will be used by the users. No matter what kind of business you are in, you will be making many prototypes before you launch your real product or service in the market.
- SWOT Analysis
This is not just the favorite word of entrepreneurs, but most management graduates use it lavishly when speaking. SWOT is nothing but an abbreviation of Strength, Weaknesses, Opportunities and Threats, which is a study or a structured planning method that is done by the organizations. The best thing about SWOT is that it can be done for a product, project, place, industry or even a person. It is usually represented in a grid format to identify the favorable and unfavorable internal (Strength and Weaknesses) and external (Opportunities and Threats) factors affecting the objective.
- Cross-Functional
Cross-functional is an approach that is related to a system in which people from different areas with diverse skill sets come together to work as a team towards a common goal. Such teams have hence gained the name of the cross-functional team which places less emphasis on an individual’s role and focuses more on communication between the members and they working together to accomplish organizational goals.
- Market Penetration
Market penetration refers to a measure of the adoption of a product or a service or a number of sales in comparison with the total sales volume of all the competing products. It can be expressed in a formula — (Sales Volume of a Product X 100) / Total Sales Volume of Competing Products
Market penetration can also be termed as the activity of increasing the market share of a particular product or service or promoting a new product using strategies such as advertising, slashing prices, bundling, or volume discounts. This is usually performed during the preliminary stages of setting up a company, as it helps to establish the current position for the business and the direction in which it must expand to gain market growth.
- Exit Strategy
In simple words, an exit strategy is a contingency plan of relinquishing one’s present situation once some objective is achieved or as a strategy to ease away failure. Every organization is advised to have an exit strategy wherein the ownership of the company is transitioned to investors or another company, because without an exit strategy, your organization may land up into the swamp. Exit strategy in worst cases may help you save face, and at best you will be in a better position of the bargain when times are right.
- Sales Funnel
Every business deals with making sales, and so this is one term you must definitely know. The sales funnel is an entire sales process which showcases the idea that every sale begins with prospective customers who are in large numbers, but the ones who actually make the purchase are really small. The sales funnel is also known as sales grinder, revenue funnel or the sales process as it involves all the levels of sales such as marketing, advertising and the actual sale where the customer makes the purchase.
Now that you are enlightened with the true meanings of some of the words that you might have used or heard other entrepreneurs using, try to learn other words as well before you blindly use them. These are useful buzzwords that come with the crazy world of entrepreneurship, but the real challenge is to use them wisely with sincerity.
