If you’re interested in opening your own business, there are many things that you must consider beforehand. From the steps you have to take to achieve success, to how much you can afford to invest in your idea, to whether or not you know the most relevant business terms every entrepreneur should. While you may have a certain amount of business knowledge, there are some terms that people in the business world use that you’ll only hear when you’re already one of them. Because we want to help you prepare, we’ve gathered 4 common business terms that you should keep in mind. Let’s take a look at what they mean!
4 Business Terms to Know
We’ve all heard the word entrepreneur, but how many of us have heard the term intrapreneur? An intrapreneur is a person who works to turn an idea into a product. Basically, intrapreneurs are similar to entrepreneurs, except they don’t take as many risks as the latter. They work in a company that funds them, they’re free to come up with different ideas, they can ask for the help of the rest of the people working in the company, and so on. For instance, franchises that are supported by a parent company can also be considered intrapreneurs.
2. Burn Rate
Another important business term that you should be aware of is the burn rate of a company. The burn rate refers to the negative cash flow in the company over a period of time. Usually, that period is of one month. That’s because it’s always a good idea to check your business’ finances as often as possible. If you’re an investor in a company that has a negative cash flow, this means that said company isn’t quite able to sustain itself, which is naturally bad news for you. We should also note that this term is used more in companies that have yet to develop and that still have room to grow.
3. Peak Stuff
This is a rather interesting business term that refers to the fact that people used to be heavy consumers of physical belongings such as clothes, furniture, household items, and so on, which led to an oversaturation of the market. If 50 years ago, people were willing to spend a lot of money on “things”, the West is now experiencing peak stuff. This means that people tend to spend their money on experiences rather than on things.
4. The Infinite Shelf
Finally, the last business term we wanted to mention is particularly relevant in today’s technology-based society. The infinite shelf refers to the advantage that people who choose to sell their products online have over people who still rely on brick-and-mortar stores. The former have virtual shelves, which are in fact infinite shelves. As such, they can satisfy the needs of a lot of diverse customers. Moreover, online retailers also have the advantage of being able to sell things that would not sell in an actual physical store.
These are just a couple of business terms that you should be familiar with, but they’re definitely some that will make your life easier in the business world. We hope you found them useful!
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