Operations Terms | Small Business Encyclopedia

Capital Equipment

Equipment that you use to manufacture a product, provide a service or use to sell, store and deliver merchandise. This equipment has an extended life so that it is properly regarded as a fixed asset.

Fulfillment

The process of receiving, packaging and shipping orders for goods

Importing

The process of bringing goods from one country for the purpose of reselling them in another country

An expense item set up to express the diminishing life expectancy and value of any equipment (including vehicles). Depreciation is set up over a fixed period of time based on current tax regulation. Items fully depreciated are no longer carried as assets on the company books.

Distribution Models

The manner in which goods move from the manufacturer to the outlet where the consumer purchases them; in some marketplaces, it's a very complex channel, including distributors, wholesaler, jobbers and brokers.

Business Cycle

Periods during which a business, an industry or the entire economy expands and contracts

Economic Development Agency

An agency whose goal is to help develop and support economic growth within a specified city, region or state by providing necessary resources and assistance

Inventory

An itemized list or catalog of the stock of a business

Packaging

The wrapping material around a consumer item that serves to contain, identify, describe, protect, display, promote and otherwise make the product marketable and keep it clean

Permits

A legal document giving official permission to do something

Private Label Sales

Licensing your product to another company to sell under its own name, rather than under yours

Exporting

The selling of goods and services produced in one country in another country

Product Development

The overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product

Relocation

The movement of a business from one region or location to another

Return on Investment (ROI)

A profitability measure that evaluates the performance of a business by dividing net profit by net worth

Outsourcing

The practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual

Overhead

The indirect costs or fixed expenses of operating a business (that is, the costs not directly related to the manufacture of a product or delivery of a service) that range from rent to administrative costs to marketing costs

Shipping

The business of sending or transporting goods

Vehicle Fleet

Vehicles owned by a company and used for business purposes

Signage and Sign Permits

Any publicly displayed information that's presented in the form of words, symbols and/or pictures and is designed to advertise your business. Sign permits provide legal permission to post such information.

Supplier Relationships

Affiliations with the companies that supply your business with goods and services

Small Business Encyclopedia