Small Business Glossary: L

landing page; lead-capture page: The page a Web user reaches when clicking an ad link, often created specially by online advertisers to feature a sales pitch related to the ad that triggered the visit.

launch: 1. (verb) To widely publicize a business, product, or brand for the first time. 2. (noun) The event or situation in which a business component is launched.

lead generation: The process of developing a list of prospective customers who are likely to be responsive to a company’s offer of goods or services, usually generated as the result of marketing programs involving personal contact, direct mail, e-mail, telemarketing, and use of search engines and database programs.

lead management: A business system designed to manage sales leads from initial contact through purchase and closing with the intention of heightening conversion of leads to customers, a process often supported by specialized contact-relationship management (CRM) software used to track prospective contacts and aid in evaluating the efficiency of a company’s sales and marketing efforts.

lender: An individual, institution, or organization that makes money available for others to borrow for defined purposes and with the understanding that the funds will be repaid, with interest, following the schedule and terms outlined in a loan agreement.

letter of agreement; letter of intent: A written summary of a verbal agreement to provide defined goods and services at agreed-upon prices, terms, and timeframes and, when signed by all parties, becomes a legally binding contract.

letterhead: High-quality, standard-size paper with all relevant business information (business name, address, telephone and fax numbers, and e-mail address or Web site) printed on it.

leveraged buyout (LBO): The purchase of a business or the acquisition of a controlling interest in a corporation through significant use of borrowed money for which the acquired company’s assets are offered as loan collateral.

liability: 1. Any money or other debt owed to others. 2. On financial statements, money owned by a business. If due within the year, called current liabilities.

libel: False, disparaging, and reputation-damaging statements written about a person. When such statements are verbal, the act is called slander.

license: 1. (noun) A legal document giving official permission to do something. 2. (verb) Providing a license to an individual or business.

licensee: A business opportunity in which you buy the right to sell, market, produce, or use established product brand names, technologies, or systems.

licensing: Giving permission to use intellectual property rights such as trademarks, patents, or processes under defined conditions.

lien: A legal document that secures a loan by providing the creditor with a conditional right to an asset of the debtor, called loan collateral. A lien bars the loan recipient from selling or transferring that asset without first paying off the creditor. Liens are limited to a defined time period and must be registered with the appropriate governmental jurisdiction in order to be valid and enforceable.

limited liability company (LLC): A type of business entity that combines features of corporations and partnerships. Income and losses are passed through to owners and therefore subject to tax only once, as in a partnership, but owners, who are called LLC members, have limited liability for the LLC’s debts and obligations, similar to the status of shareholders in a corporation.

limited partnership: A business structure used by many venture capital firms that involves one or more active general partners who manage and assume debts and obligations for the business, and one or more limited partners who are liable only to the limit of their investments.

line extension: The introduction of a new offering under an established brand name and in the brand’s established product category, but targeting different customer needs or market segments. For instance, the introduction of mouthwash by an established toothpaste brand.

line of credit: A pre-approved amount of credit that a borrower can draw upon as needed. Unlike a loan, which is given to the borrower in a lump sum, a line of credit involves money available to borrow as needed until the maximum approved amount is reached, after which the borrowed funds are repaid and made available to draw upon again for the duration of the pre-negotiated credit term.

link building: Obtaining inbound links to a Web site from quality, high-traffic sites as a means for increasing site visitors and improving a site’s rankings in search engine results, usually achieved through establishment of link exchanges, directory and search engine registrations, and link placements on relevant sites, forums, and blogs.

liquid assets: Assets that can be easily converted into cash, including cash accounts, investments, securities, accounts receivable, the cash value of inventory, and the value of items pre-purchased but not yet received, such as insurance premiums or service retainers.

liquidation: 1. Conversion of assets to cash, often undertaken voluntarily by investors in securities or by closing businesses. 2. In law, the mandated process of winding down or closing a company involved in bankruptcy proceedings by selling unsecured assets or inventory and using cash proceeds to pay the firm’s unsecured creditors.

liquidity: 1. When related to investments, the ability of an asset to be converted to cash quickly and at full value. 2. When related to accounting, the ability of current assets to cover current or short-term liabilities. 3. When related to business or personal financial condition, the ability of cash on hand, or assets that can be quickly converted to cash, to cover all immediate and near-term debt obligations.

liquidity ratio; cash ratio: A measure of how quickly a business can liquidate assets and pay current short-term obligations. Calculated by dividing the total value of cash and marketable securities by current liabilities.

list price: The manufacturers’ suggested retail price for a specific item.

listserv; list server: A program used to automatically send messages to addresses on an e-mail list, with the capability to automatically remove addresses when recipients ask to unsubscribe.

litigation: A process for dispute settlement that involves legal action through a lawsuit that is tried and settled in a court of law.

loan: Assets, usually money, provided to an individual or business with expectation that it will be repaid, usually with interest.

loan security: Collateral pledged by a borrower to secure a loan from a lender, with the agreement that rights to the pledged property will be assigned to the lender if the borrower fails to meet agreed-upon obligations, at which point the lender can seize and sell the collateral.

loan security agreement: A contract between a lender and borrower specifying which assets are pledged as security or collateral against the value of the loan. The lender may seize or foreclose on these assets if the borrower fails to repay the loan as promised.

logo: A unique graphic design featuring type, a symbol, or both used consistently by a marketer to achieve quick recognition of a business or brand in its marketplace; a key element of brand identity.

long-term liability: A debt that extends more than one year into the future, including any long-term loans.

loss: A decrease in the amount of money a person or business possesses, or a decrease in the financial value of something.

loss leader: A popular retail item priced at a very low, often below-cost price in an effort to draw customers into a store where they are likely to also purchase other higher-profit goods.

low-context culture: A group of people who relate to others in a task-centered way, following established and easily expressed rules.

low-price strategy: A strategic marketing approach by which a business seeks to stimulate consumer demand and gain market share by offering its products for sale at a lower price than otherwise available in the competitive market area; most often associated with products in high demand with few competitive advantages that can be produced and sold in high volumes.

loyalty marketing: A program that focuses on retaining and growing profitable relationships with established customers based on the assumption that keeping existing customers is less expensive than acquiring new customers, and that loyal customers will share their satisfaction with others, attracting new customers to a business.

loyalty program: A plan that inspires established customers to increase use of a company’s products and services by rewarding repeat purchases with discounts, added-value offers, or other incentives.

lump-sum bid: Presentation of an all-inclusive, single-figure price estimate for delivering requested goods or services with no detail of how expenses are itemized or allocated. Usually rewarded by a lump-sum contract that requires delivery without requiring a cost breakdown.

lump-sum contract: An agreement stipulating that the buyer will pay a specified amount without requiring a cost breakdown in return for delivery of an agreed-upon quantity of goods or a product that matches the contracted scope of service.

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