Ten3 Glossary of Business Terms 

The Ten3 Glossary serves also as an Alphabetical Directory of the Ten3 Business e-Coach

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Patent

A right given to an inventor for a limited period of time; this right allows the inventor to treat an idea as his/her property and to prevent anyone else from using it without his/her permission.

Peter Principle

In a hierarchy every employee tends to rise to his level of incompetence.

Preference Shares

Give their holders certain rights in priority to the ordinary shareholders, especially as regards entitlement to dividends and entitlement to repayment of capital is the company is wound up. They are normally rewarded at a fixed rate of dividend but may have rights to participate in profits by way of further dividend. Except in special circumstances, they do not normally carry voting rights. Sometimes, preference shares carry conversion and/or redemption rights enabling the holders either to convert their investment into ordinary shares or to realize it at some future date.

Private Placement (also known as Private financing or Private offering)

A method of raising capital by offering for sale an investment or business to a small group of investors (generally avoiding registration with securities registration agencies). 

Pro Forma

The use of hypothetical figures (based on future expectations) in financial statements to represent future expenditures, debts and other potential financial expenses. 

Product Development

The stage of the innovation process where research is translated into a product or process through evaluation, adaptation and demonstration.

Product Family Advertising

Advertising designed to convince the prospect that they have a wide range of functionality to choose from today and after they buy will not be locked into a single product or service environment in the future.

Product Franchising

An arrangement for a franchisee to use the name and to produce the product line of the franchiser or parent corporation.

Productivity

A measurement of the number of goods produced during a specific amount of time.

Profit Margin

Total revenues less total expenses.

Proprietary Technology

Technology that is unique and legally owned by an enterprise. The technology may be integral of the product or service being offered or it may be used in the production of the product or service.

Proprietorship

The most common legal form of business ownership; the majority of all small business are proprietorships. The liability of the owner is unlimited in this form of ownership. 

Prototype

A model that demonstrates the validity of the concept of an invention (laboratory prototype); a model that meets the needs of the manufacturing process and the user (production prototype).

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Prudent Investor Rule or Standard

A legal doctrine that requires fiduciaries to make investments using the prudence, diligence and intelligence that would be used by a prudent person in making similar investments. Because fiduciaries make investments on behalf of third-party beneficiaries, the standard results in very conservative investments. Until recently, most regulations required the fiduciary to apply this standard to each investment. Newer, more progressive regulations permit fiduciaries to apply this standard to the portfolio taken as a whole, thereby allowing a fiduciary to balance a portfolio with higher-yield, higher-risk investments.

Public Company

A company whose shares are sold to the public at large.

Public Equity Markets

Organized markets for trading in equity shares such as common stocks, preferred stock and warrants. Includes markets for both regularly traded and non-regularly traded securities.

Public Offering

General solicitation for participation in an investment opportunity.

Quality Control

The process by which a product is checked and tested to ensure consistent standards of high quality

Rate of Return

The yield obtained on a security or other investment based on its purchase price or its current market price. The total rate of return is current income or minus capital appreciation or depreciation.

Relationship Responsibility

The moral responsibility of every manager to communicate reasons and plans.

Research

The initial stage of the innovation process, which includes idea generation and invention.

Research and Development Financing

A tax-advantaged partnership set up to finance product development for start-ups as well as more mature companies.

Revolving Credit

An agreement with a lending institution for an amount of money, which cannot exceed a set maximum, over a specified period of time. Each time the borrower repays a portion of the loan, the amount of the repayment may be borrowed yet again.

 

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