Small Business Glossary: D

daily deal online coupons; group-buying sites: Offers sold online for deeply discounted purchases at local retailers. Many Web sites offering these coupons present only one retailer’s offer per city per day and sell a particular coupon for only one day, with the disclaimer that the offer is invalid unless a minimum number of coupons is purchased, which encourages customers to share the offer with friends to ensure activation of the discount. Groupon and Living Social are examples of these coupons’ retailers.

dashboard: 1. A graphic presentation of key performance indicators in a single chart or table used to monitor, analyze, and manage the status of business finances or operations. 2. A software tool used for viewing and monitoring performance information from one or more applications, network devices, or machines.

database marketing: Using data generated by an organization’s marketing and sales efforts to compile detailed information about customers and prospective customers, and then using that information to create and send targeted marketing messages focused on the specific needs of unique customer groups.

days in receivables: A measure of the efficiency of a business to collect money due from credit sales, calculated by dividing current accounts receivable by total daily credit sales, with a result of 30 or less considered acceptable and a result of 45 or higher considered a reason for concern. (Total daily sales are calculated by dividing total annual credit sales by 365.)

dealer: A business opportunity in which you represents lines of products, which are purchased from a parent company and sold directly to consumers.

debt instrument: A legally enforceable, written promise to repay a debt that can be sold, traded, or bartered among investors and, if backed by a government agency, can be listed in financial documents as an asset. Often referred to as a bill, bond, note, promissory note, certificate of deposit, guaranteed investment contract, commercial paper, or banker’s acceptance.

deduct: To take away or subtract from a given quantity.

deduction: The amount removed or subtracted from a given quantity.

default: 1. Failure by a borrower to meet a legally defined financial or other obligation. 2. Failure of a party in a contract agreement to comply with agreed-upon terms. 3. In legal proceedings, failure to do something required by law; for example, failure to appear in court at a specified time and place.

default clause: The portion of a loan agreement that defines the legal and practical remedies a lender will employ if a borrower defaults on a loan by failing to make promised and scheduled payments, including actions such as demanding immediate repayment of the full loan or seizing assets pledged as collateral against the loan. In binding contracts, default remedies are typically outlined in a contract default clause.

deferred compensation: An agreement between an employer and an employee that the employer will pay a portion of the employee’s compensation at a time after the income was actually earned, generally to postpone the employee’s tax liability to a future date, with deferred payments commonly used to fund retirement benefits.

deferred payments: An agreement to allow postponement of payments due, offered as customer incentives or conveniences, offered as a feature in loans (such as graduated-payment mortgages), or authorized by courts as part of debt-workout plans designed to help insolvent individuals and businesses avoid bankruptcy.

defined benefit plan: An employer-sponsored plan under which an employer promises specific benefits to employees in support of their retirement. These plans are titled defined benefit plans because they’re determined by detailed formulas known in advance, usually based on employee title, salary history, length of service, age, and other factors that contribute to the computation of monthly or annual retirement benefits.

defined contribution plan: An employer-sponsored program under which an employee, the employer, or both contribute to a retirement plan at what may or may not be a set rate, with contributions invested on the employee’s behalf in an account that will fluctuate in value. Defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans (ESOP), and profit sharing plans.

deliverables: The product, either tangible (in the case of goods) or intangible (in the case of services), to be delivered by a seller to a buyer, usually defined as part of a cost estimate, scope-of-service description, memo of understanding, sale agreement, or contract.

demographics: The factual characteristics of human populations including gender, age, household composition, education, income level, occupations, religions, and ethnicity, which, when applied to target market audiences and complemented by geographic and psychographic or behavioral descriptions, contribute to a customer profile used by marketers to focus efforts only on those most able and likely to purchase a business’s goods and services.

depreciate: To allocate a fixed asset's cost over three or more years, based on its estimated useful life to the business.

depreciation: The decrease in value of a tangible asset over the period of its useful life. Comes as a result of age and wear and tear, and is reflected on financial statements as a noncash operational expense called a write-off. When referring to declining value of loans or intangible assets, called amortization.

digital certificate: An electronic form of identification for an individual or business conducting transactions on the Web, issued by a certificate authority and containing the name, serial number, expiration date, and public key copy used to encrypt the certificate holder’s messages and digital signature so that the message recipients can ensure the validity of the transmission.

digital signature: An encryption code attached to files to identify the transmitter and verify the authenticity of electronic documents, considered a legally acceptable signature in the U.S. by the Electronic Signatures in Global and National Commerce Act, known as the E-sign Act, which ensures the validity and legal effect of contracts entered into electronically.

digital wallet; electronic wallet; ewallet: Software that holds credit card data and passwords either on the user’s computer or on the server of a wallet service to allow for payment of purchases made online.

direct competitors: Suppliers that offer similar products or services and that appeal to the same customers in the same market areas, as opposed to indirect competitors that address the needs of the same customers but with significantly different offerings.

direct mail: Marketing materials in the form of letters, postcards, brochures, fliers, or packages sent directly to the homes or offices of targeted prospects.

direct marketing: Marketing communications that are designed to generate a direct exchange between a seller and a buyer without involvement by retailers, agents, or other intermediaries. Direct mail, direct-response advertising, database marketing, and telemarketing are means of direct marketing communication.

direct sales: Sales of goods or services that take place directly between a buyer and seller outside a retail establishment, usually employing personal presentations, direct mail, or Web sites to reach and communicate directly with buyers without the need for intermediaries.

direct selling: A business format in which you sell consumer products or services in a person-to-person manner, away from a specific retail location.

directory: A Web search tool similar to a search engine but categorized not by web-searching software programs, called spiders, but by people who read Web sites and index searchable information in response to online user queries.

direct-response advertising: Ads that prompt customers to take an immediate action either by making a purchase directly from the advertiser or to start the purchase process by requesting additional information. Used by businesses that market products directly rather than through intermediaries.

disability: A physical or mental impairment that substantially limits one or more major life activities.

disclosure: Information provided in a financial report, in addition to the information in the financial statements.

display advertising: Promotional messages appearing in print media or online that combine space, art, a headline, copy, visual elements, and the advertiser’s logo in a design created to quickly and simultaneously capture viewer attention, pique interest, and communicate to viewers benefits, a sales proposition, and a call to action.

distribution: The means by which a business gets a product to the end user. A major factor in marketing success, since the means of distribution affects pricing, availability to consumers, and, in the case of perishable items, product quality.

distribution channel: The route a product takes to reach the point of purchase, generally falling into two route categories: direct channels involving no agents or middlemen, and indirect channels involving wholesalers and retailers.

distribution strategy: The approach a business devises to move products and services from the point of origin to the point of sale, whether directly through retail or direct sales or indirectly through intermediaries such as wholesalers, agents, or other retailers.

distributor: An agent or entity that sells or resells noncompeting products on behalf of businesses that employ indirect marketing strategies to move products to consumers.

diversification: A business strategy that involves adding product or business lines outside the established core business of the company, often by creating new business units or acquiring other businesses in order to gain new customers and achieve revenue growth.

domain name: The string of characters and letters that form the unique name of a Web site, often spelling a personal, business, organization, or product name followed by a dot (.) and a top-level domain, which is the term for the final letters in a domain name, such as com, net, or org. The domain name is part of the URL (uniform resource locator) that defines the address of a Web site.

dot-com bubble: The period from 1995-2000 during which information technology companies, almost all with online addresses ending in dot-com, were founded, funded, and valued based on revolutionary innovations instead of traditional price-earning ratios, pushing the NASDAQ stock exchange to new highs until March 13, 2000, when a lack of financial performance combined with other factors triggered a massive stock sell-off, known as the dot-com bust.

double opt-in: A method used by e-mailers to assure that a recipient has granted permission to receive promotional messages twice: first by registering or filing a request, and then by confirming that permission was granted, usually by responding to an automatically generated confirmation request.

double-entry bookkeeping: The system used in accrual accounting in which every transaction is reflected as both a debit and a credit. For example, when a piece of equipment is acquired, the amount is credited to fixed assets and debited from cash; when a bill is paid, the amount is credited against accounts payable and debited from cash, with the transactions always resulting in a sum of zero.

downsizing: A cutback in the size and cost of a company’s operations that usually involves temporary or permanent employee layoffs as part of an effort to overcome financial challenges stemming from economic conditions, a lack of profitability, heightened competition, and other detrimental changes facing a business.

drive time: A term used by radio broadcasters for the primetime periods of 6 to 10 a.m. and 2 to 6 p.m., during which advertising rates are most expensive and listening audiences largest because most drivers are in their cars commuting to or from work.

drug-free workplace: An employment environment, as described by the U.S. Drug-Free Workplace Act of 1988, in which employees are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.

due diligence: The investigation, verification, and evaluation undertaken by investors to confirm facts about an asset before a purchase is finalized.

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