Fri, January 18, 2019

Basic Business Terms for Teens

Book_guy_levitateaThis is meant as a starting point for those wanting to know more about businesses.  The list is by no means exhaustive.  We wanted to get the bare essential words and keep it simple.  Make sure to check out our other sections on Finance Terms and Marketing Terms

(Note: Terms are not in alphabetical order since some concepts build on each other.)

 – Entrepreneur is a person who starts a business.  It comes from a French word meaning to ‘undertake.’ The focus is on the mindset: an entrepreneur has the mindset of making money and looking for opportunities.  Usually, it is someone who looks for a unique opportunity and fills that need.  An entrepreneur can work from home, have an office or even start a non-profit (makes money, but focuses on helping and growing business).  BONUS: Learn to spell it. Entrepreneur has four e’s.  It starts with an ‘e,’ has three letters followed by e; two letters followed by ‘e’ and one letter followed by ‘e’.  It ends with the fact that you are(ur). E-ntrE-prE-nE-u-r

– Product/Service is what a business offers.  A product is a thing that people can buy.  A service is something you do for other people to gain money.

– Profit is when you make money.  When your income (how much you get paid) is more than your expense (how much you spent), you make a profit.  (No, it is not a person who tells the future, that would be ‘prophet.’)

– Business Plan is basically an outline of your business.  It tells what you do and how you make money doing it.  (See this page for more detailed description.)

– SWOT is a way to show others what your company has to offer and let’s you see what challenges you may encounter.  It is a good starting point when looking at a specific type of business. SWOT stands for:

     – Strengths – things that help you achieve your business goals.  Examples: special skills, training and knowledge, or the fact you have no overhead because you still live with Mom and Dad.

     – Weakness – things that harm your business goals.  Examples: lack of experience, time limitations due to school, or the fact you live at home with Mom and Dad who can still ground you.

     – Opportunities – things outside your business that helps reach goals.  Example: there may be a skate park opening near your house and you want to start selling skateboards in your neighborhood.

     – Threats – things outside your business that harms your goals. Example: You want to start selling skateboards, but you find out that they are putting in a skate shop when they open the new skate park.  It is an opportunity you have to overcome.

 

– Economy is the general flow of money into business.  Example: A good economy means people are buying things because they have money.  They have money because they have jobs.  They have jobs because businesses are making money.

– ROI – Return On Investment.  ROI is usually a percentage so you can see about how much you can expect to make from a business venture or stock transaction. If your ROI is only 2%, you may not want to put a lot of effort into it. If the ROI 60%, it may be worth some effort.

– Break Even is the point where you have made enough income to cover all the money you spent .  Once you break even you begin to make a profit.  For example, if you put a webpage up to make money and spent one hundred dollars, when you make one hundred dollars you have broke even.  Any money you make past that is income.

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He is 21, so that is close enough to a teen to be on this page!
 

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