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A visual dictionary of business essentials. New concepts posted weekly
Showing 24 concepts
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Anchoring
The first number you hear quietly sets the price for everything that follows. Your brain calls it a starting point. Your wallet calls it expensive.
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Brand Equity
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Break Even Point
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Cash Flow vs. Profit
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Confirmation Bias
Your brain is a defense attorney for what you already believe. It collects every piece of evidence that supports your case and discreetly forgets the rest.
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Customer Acquisition Cost (CAC)
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Customer Lifetime Value (CLC)
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Endowment Effect
The moment you own something, you start to value it more than the person who wants to buy it from you. The thing has not changed. You have.
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Expenses
Expenses are everything a business spends to keep operating. They sound simple. They are not. The category you put a cost in determines what kind of business you appear to be running.
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Loss Aversion
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Market Research
Market research is the discipline of finding out what is actually true before you spend money on what you think is true. Most companies do the opposite. They build first and learn second, and the learning is expensive.
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Market Segmentation
Everyone is not your customer. The market is a crowd of very different people, and the first job of marketing is to figure out which slice of that crowd is actually yours.
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Marketing Mix: The 4Ps
The marketing mix is four decisions in sequence — product, then price, then place, then promotion. Each one builds on the one before it. Each one has to serve the same two masters: what the customer should perceive about the brand, and what makes the business a profit.
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Minimally Viable Product (MVP)
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Opportunity Cost
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Positioning
Positioning is not what you say about your product. It is the small, specific place your product occupies in your customer's mind. Get it right and selling becomes easier. Get it wrong and you spend forever shouting.
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Pricing Strategy
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Profit
Profit is what is left after every expense has taken its share. It is the only number that tells you whether the business is actually a business. And it comes in three flavors, each of which tells a different story.
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Return on Investment (ROI)
ROI is the simplest formula in business and the most often misused. It asks one question: for every dollar I put in, how many came back? The math is easy. Picking what to count is where most people get it wrong.
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Revenue
Revenue is the top of the income statement and the most commonly confused number in business. It is not what you have. It is not what you keep. It is just what the customers gave you before anyone else got their hands on it.
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SWOT Analysis
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Status Quo Bias
Doing nothing feels like the safe choice. It almost never is. The default is making a decision for you, whether you noticed it or not.
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Sunk Costs
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Targeting
You have segmented the market. Now you have to choose. Targeting is the decision about which group you are actually going to fight for, and which groups you are willing to let go.
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