INTERNET MARKETING

INTERNET MARKETING

INTERNET MARKETING

 

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BUSINESS TERMS (L-M)

 

 



 

Understanding business terms is the key to learning about business. Terms L-M are listed below:

Letter of Credit, Letter of Agreement (LOA), Leverage, Liability, Line of Credit, Liquidity, Macro Economnics, Market Analysis, Market Forces, Market Niche, Market Share, Markup, Micro Economics, Multilevel Marketing

 

Letter of Credit
A commitment, usually by a bank on behalf of a client, to pay a beneficiary a stated amount of money under specified conditions.  It guarantees that the seller will get paid.  This is usually used in international trade.  The parties to a Letter of Credit are the supplier, the buyer's bank, the buyer and sometimes the seller's bank.  Source:  Import Export Help

 

Letter of Agreement (LOA)
A Letter of Agreement is a written agreement between two parties.  It can cover anything the parties agree to.  It stipulates who does what and when.  It is less extensive than a contract.  It usually a 1-3 page document that focus on a specific action.

 

Leverage
Leverage is using debt instead of equity to achieve a financial advantage.  For example,  a company can finance larger operations by raising money through borrowing (debt) rather than by giving up equity (ownership) in the business to an investor.

Leverage Buyout (LBO) are usually financed through a combination of equity and debt in which the cash flow or assets of the target company is used to secure and repay the debt.  Source:  Wikipedia


Liability
Fiscal Year is the 12 month period used for calculating financial statements and filing corporate income tax reports.  Unlike the calendar year that begin on 1 January and ends on 31 December, the Fiscal year for most corporations in the U.S. is from July to June.  Each company will determine their own fiscal year.  The federal government uses October to September as it's fiscal year.

There ar two types of Liabilities: Current Liabilities and Long Term Liabilities.

Long Term Liabilities are payment obligations that go beyond a year.  They include bonds, long term leases, pension obligations, etc.

Licensing
Licensing means giving permission to another.  In business licensing means giving another entity the permission or right to produce and sell your product under certain conditions agreed to by all parties concerned.  In return for licensing your product the manufacturer agrees to pay you a certain fee/commission.  For example, you may grant a manufacturer the right to manufacturer and sell your product for a specific period of time and in certain countries and in return the manufacturer will pay you $1.00 for every item sold. 

Line of Credit
A pre-approved loan between a financial institution and borrower that may be used repeatedly up to a certain limit and can subsequently be paid back prior to payments comign due. The pre-approved amount will be set out in the agreement between the lender and the borrower.

A Line of Credit is also referred to as a "Open-End Credit" or "Revolving Line of Credit".  Source:  Investopia


Liquidity
Liquidity is the ability to transform assets into cash.  The most liquid asset is cash.  Some assets can be converted to cash much quicker than others.  For example, securities can be converted to cash much faster than real estate can.  The type of assets will determine how liquid your business is. 


Macro Econonmics
Macro Economics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes national, regional, and global economies. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, international trade and international finance.  Source:  Wikipedia


Market Analysis
Market analysis is assessment of opportunities, strengths, weaknesses and threats of a company by studying its specific segment within an industry.


Market Forces
Market Forces are the factors affecting the price and availability of a commodity or product in a free market.  They include supply, demand, legal, financial, etc.


Market Niche
Market niche is identifying a segment of the market that is not being served and developing a product or service that meets their needs. 


Market Share
Market share is the percentage of the market that your business serves.  For example, if you sell hamburgers and there are 99 other busineses doing the same thing to a total customer base of 1 million, the percentage of your market share will be the amount of people out of the 1 million that buy hamburgers from your business. 


Markup
Markup is the difference between what it cost you to produce a product or service and what you sell them for.  This is usually expressed as a percentage.

Micro Economics
Microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets.  Source:  Wikipedia


Multi-level Marketing
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is also referred to as the participant's downline, and can provide multiple levels of compensation. Other terms for MLM include pyramid selling, network marketing, and referral marketing.  Source:  Wikipedia











 

 

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