In every field, there’s a pool of words associated with it. For MSMEs, it’s the same. Entrepreneurs in this age however must know that new terms are coming to the limelight. For example, the term SME was a vague term up until 2006 but today it is a globally accepted word, with a defined meaning.
We have nuances in meanings and concepts which is why we thought it well to let you know of 21 important MSME terms you should know as an entrepreneur.
The criteria for defining and categorizing some of these terms however differ from country to country, but the main aim is to understand and comprehend the definition of each term.
But first the definition of MSME
21 MSME Terms Every Entrepreneur Should Know
- Agripreneur – an entrepreneur who owns or manages a business venture focusing on the agricultural sector or agriculture-related. Other terms take the same concept e.g Fashionpreneur
- Agri-SMEs – Small and medium-sized enterprises in the Agricultural sector.
- Annual Turnover – the total sum of sales made by a business in a year, referring more specifically to the total amount of money received on products or services. Annual turnover is also referred to as income or gross revenue.
- Benchmarking – a process that involves measuring the performance of your business against a competitor.
- Bootstrapping – Starting and running a business with little or no external capital or funding.
- Brand – Refers to the words and symbols such as a name, logo and slogan that represent a business’ identity.
- Break-even Point – The level of sales at which a business neither makes a profit nor incurs a loss.
- Cash Flow – The amount of cash coming in and going out of a business.
- Crowdfunding – the act of raising funds for your business from a large number of people. Could be family and friends. [Read also: Top 6 Incubation Programs for Nigerian Startups and Entrepreneurs]
- Customer Acquisition Cost – The amount of money that your business needs to spend to acquire one new customer.
- Customer Pain Points – The particular gap or solution needed to fulfill customers’ satisfaction.
- Customer relationship management (CRM) – A technology for managing all your company’s relationships and interactions with customers and potential customers.
- Customer Retention: The process of retaining existing customers, including customer service, loyalty programs, and engagement strategies.
- Equity Financing – Means of raising capital by selling shares of your business. Your business receives the money it needs and the investor will own a share in your company.
- Equity Free Funding – A loan or other form of financing that does not give investors an ownership stake in your business. Also known as Zero Equity Funding or Non-equity funding.
- Elevator Pitch – A concise, compelling and convincing presentation that states the idea for your product or service, which is precisely delivered in a short time typically between 20 – 60 seconds. It includes what your business does, who your customers are, and what makes your business competitive.
- Green SME – Small businesses with activities that do not cause any negative impact on the environment, economy, or community. Also known as Green Businesses. [Read also: Top 6 Incubation Programs for Nigerian Startups and Entrepreneurs]
- Term Sheet – a formal document that shows the basic terms and conditions of an investment between a business and an investor.
- Unique Selling Point (USP) – A benefit that a business offers to its customers that its competitors do not.
- Women-led Businesses – An enterprise with a woman/women at the helm of affairs, in long-term control and management of the business, play active roles in both strategic and day-to-day decision-making. Also referred to as WSMEs.
- Woman-Owned Business Enterprise (WBE) – is defined as one that is at least 51% owned, operated and controlled on a daily basis by one or more females.
As a budding entrepreneur, understanding the meanings of the concepts highlighted above will surely develop your knowledge and give you an edge in your journey to entrepreneurial success. As you proceed on your mission, you would learn more terms as it pertains to your niche.
Perhaps you are thinking of owning a startup as well, read the 5 key stages of startup success.