Glossary

Accelerator

A short-term programme of investment and support for early-stage enterprises.

Angel Investor
 
An individual investor who makes an investment in an early-stage enterprise.
 
Annual Accounts
 
The formal statement of an organisation's financial accounts for a particular 12 month period - in most cases April through to March, but different organisations may have a different financial year such as January to December. Annual Accounts are normally publicly available, and depending on the size and type of the organisation will require setting out in a particular format, and usually need to be verified or audited by a qualified accountant.
Asset
 
Something that your organisation owns – often a building or equipment.
Brokerage
 
Making the connection between an investor and an organisation seeking investment.
Buddiolwyr
 
Y bobl sy'n elwa'n uniongyrchol o weithgaredd mudiad. Gellir cyfeirio ato hefyd mewn ffyrdd eraill, fel defnyddwyr. Mae angen i fudiad fod yn glir iawn pwy mae'n elwa - ac yn ceisio elwa.
 
Budgets
 
Calculations made at the start of a period, usually the start of a financial year, for both likely income to be received and likely expenditure to be incurred.  Budgets should be agreed at the highest level (Board) and then monitored and reported on throughout the period in question, to confirm that things are on track, or if not, to understand why not.
 
Business Case
 
A set of calculations, usually produced in a report format together with explanatory text for other people to review, setting out why a particular plan is the right one to follow.  It will normally provide a set of assumptions about income and costs, show that a plan is profitable, and provide evidence that the figures have been calculated correctly and carefully.
 
Business Development / Business Leadership
 
Experience of running or helping to run a business, making and communicating key decisions, developing and marketing new products or services and achieving profitability.
 
Business model
 
What your organisation does, what it produces or delivers, and who pays for that product or service.
 
Business plan
 
Document explaining your organisation’s goals and how you will achieve them.
Capacity / Staff Capacity
 
There are two principal elements of capacity - abilities and time availability.  In order to have sufficient staff capacity to deliver a project, or develop a new one, an organisation needs to have people with both elements together.
Cashflow
 
Organisations can be profitable but still run out of cash.  Cashflow is a measure (and/or forecast) of what is happening to an organisation's bank balance over time.  It is affected not only by profitability, but how quickly customers pay the organisation (whether this is grants or contract payments or cash for goods) and when the organisation has to settle its own bills.
 
CEO
 
Chief Executive Officer, the most senior paid member of staff in an organisation.  Sometimes also shortened to Chief Executive.  Many organisations will not use this title, preferring other titles such as Manager or Director.
Competitor Analysis
 
An exercise to understand WHO an organisation's potential competitors are, what their PLANS are, and what their relative STRENGTHS AND WEAKNESSES are.  The main purpose of Competitor Analysis is to understand what an organisation needs to do to be competitive - it may need to address issues of quality, price, brand or a combination of all three.
Cost of entry
 
Developing any new business idea to the point where you can start selling and earning money involves some sort of investment of time and money.  Cost of entry refers to the amount of time and money required for a new business to establish itself from scratch.  Complex businesses or those needing expensive equipment or just lots of planning, will generally be High Cost of Entry and can represent a big barrier.  Low Cost of Entry businesses are easier to establish, but are often hard to make much money out of, as competition is usually higher (it is normally Low Cost of Entry for everyone!), meaning that it is hard to get enough customers and/or sustain good profit margins.
Customer Segmentation
 
Any business needs to understand who its customers are and what they want.  Good businesses understand that their customers are not all the same, want different things and may need different approaches to marketing and sales.  Customer segmentation refers to the process of understanding and mapping different types of customers.
Debt
 
An amount of money borrowed by one organisation from another.
Demand
 
It is important to understand the difference between the Need for a product/service and the Demand for it. Just because people have a need for a product does not mean they will decide to buy it, or use it, in the case of a service. Lots of third sector organisations can demonstrate that there is a need for what they do - much less can demonstrate real demand. Fewer still can demonstrate that they have the type of demand from potential customers that will part with money. The ultimate user or beneficiary of a business will not necessarily be the one to pay - as in some public services for example - so Demand here refers to the existence of individuals or organisations willing to pay for the product or service being offered.
 
Development Costs
 
Development costs refers to the investment (money and time) required to establish a business to the point that it is able to trade effectively.
Donations
 
A gift that your enterprise can spend fulfilling its social aims however it chooses to do so.
Empowered
 
Invited to contribute to decision-making, and provided with full and clear information, and any training and support required, to be able to fully contribute.
Equity
 
A stake in an enterprise owned by shareholders.
Financial Controls
 
The systems, procedures and oversight which an organisation has in place to ensure that money is received, recorded and spent in appropriate and agreed ways.  Good controls ensure that no one can spend money or make key decisions about money without proper authority. 
Financial Reporting
 
A broad term to cover various ways in which organisations report how their financial performance is going - to the Board, to funders/investors, or to other key people.  This will usually follow a particular format and will mostly be numbers, perhaps with graphs and charts.
Financial Return
 
Profit achieved.  Often used in relation to investment, and referring to how much money an investor will get back and when, if they put money into a project or organisation.
 
Financial systems
 
The practical systems which an organisation uses to manage its money.  These may vary from simple spreadsheet systems right through to complex and expensive accountancy software for bigger organisations.  The system should be right for the size of organisation and this may need to change over time as an organisation grows.  If a particular system is not managing money well or not able to provide the information (reports) which people inside or outside the organisation need it to, it is time to change the system.
 
Governance
 
A broad term which means the systems that an organisation uses to be accountable, to oversee the work of the organisation and to make key decisions.  The most important body in terms of governance will always be the Board, but there may be other ways in which an organisation achieves this oversight (e.g. sub-commitees, steering groups, community consultation).
Grant
 
A payment to your organisations that may have some conditions attached but does not have to be repaid.
Human Resources
 
The staffing and volunteers of an organisation are usually its most important resource.  In business terms the phrase Human Resources usually refers to the part of the organisation (professionals, systems and procedures) that looks after the people who work for it and makes sure they are contributing effectively
Impact
 
Impact refers to the long term and significant changes that happen as a result of a set of activities.  Outputs and Outcomes can often refer to changes for individuals, whereas Impact generally refers to wider community or societal benefits in the long term.
Investment readiness
 
An organisation having the systems, processes and business model to be able to attract investment.
Key Indicators
 
Usually in numerical form (numbers, percentages, finances) these should be a small number of things that Management and Board will review over time to understand how well the organisation is performing in terms of its work and maybe its finances.  They should be the most important things for the organisation in terms of its mission and current plans - the things that will really tell whether the organisation is succeeding or not. 
Limited by guarantee
 
An organisation that does not have shareholders.
Loan
 
Some money provided by an individual or organisation to another individual organisation on the basis that they will get it back, usually over a set period of time in return for a fee (see interest).
Management Accounts
 
Statements of financial performance which are produced internally for monitoring and decision making by the Board and Management.  These might be in a number of different formats, and in some cases might follow a similar format to Annual Accounts, but in other cases - or additionally - may contain charts and graphs to present information in a more helpful way.
Mantolen
 
Cyfrifiad o werth ariannol cyffredinol mudiad ar ddiwrnod penodol, gan ystyried yr holl asedau, arian parod, balansau cyfrifon banc, arian sy'n ddyledus i'r mudiad a dyledion cyfredol ac yn y dyfodol sy'n ddyledus gan y mudiad. Yn y cyfrifon blynyddol rhoddir safle'r fantolen ar gyfer diwrnod olaf y flwyddyn ariannol.
Market
 
The whole system of buying and selling that exists in your area for the products/services you offer.  The market includes different types of customers, different types of suppliers, and lots of partnerships and relationships in between them.  It is very important to understand how your own market works as well as you possibly can.  Who buys what, from where, and in what amounts?
Market Research
 
Specific work carried out to understand your market.  This can be quite wide, to understand the whole market, or quite narrow in terms of a new product or service you are planning.  It can help to understand where you fit in the overall scheme - are you premium or value?  What is the overall size of your bit of the market?  It can also find out whether customers will actually want to buy what you have to offer, and what they would be prepared to pay.
Marketing
 
The process of getting your message across to your customers/audience.  This process needs to start with understanding who your target customers/audiences are, whether they are a single group or actually a broad group with different needs.  Then the process will establish what messages you want to put across to different types of customers/audiences, and what methods you will look to use to achieve this.
Marketing Plan
 
A Marketing Plan sets out exactly how an organisation will go about marketing itself and its products/services over a defined period of time.  It will break down different approaches for different audiences, and specify methods, resources, budgets and timescales to be used to achieve this.
Measure Impact
 
Impact is very hard to measure, as it is about long term change to whole groups of people or society.  It is difficult to even understand what has really changed, and even more difficult to know what has caused that change and how much is due to the work of one particular organisation.  There is no one way to measure impact that is happening or has happened, but most methods will in some way involve comparing before and after data and talking to a range of different people to better understand what people think the long term value of an activity has been
Mission
 
The mission of an organisation is what it sees as its own specific role in helping to bring about the reality it wants to see.  Two organisations can have very different missions (roles) but still have the same shared vision (what we're working towards).
Objectives
 
Particular aspirations or targets that an organisation wants to deliver.  These may be short term milestones to be met, or equally may be permanent targets to be delivered against year on year.  An organisation will normally have a number of Objectives at any one time, and ideally they will all be things that put together will be helping to ensure that the organisation is achieving its Mission.
Outcomes
 
These are the results that might ultimately arise from a particular activity.  They might not be achieved immediately after an activity has finished and may come later, but they will usually be the things that the activity is trying to achieve for a person or community.  So, the creation of a Neighbourhood Watch group may be the Output, but the Outcomes may be a reduction in local crime and people feeling safer in their homes.  The longer term Impact may be benefits to health and well-being and the local economy and a reduction in police spending in the area.
Outputs
 
These are individual activities or achievements that can be counted up and reported.  Often funders will expect these to be reported.  They are the building blocks that together could start to achieve change.  So for one example, the Output might be the achievement of a qualification by an indiviual, the Outcomes might be higher self-esteem and the gaining of employment by that individual, and the Impact might be long term benefits to health, the local economy and reduced public spending.
 
Patient Investor
 
An investor who is prepared to wait a relatively long time to get their money back.
Payment by results
 
A contract, usually with the public sector, where an enterprise is paid based on whether the service they deliver meets a series of targets.
Product(s) or Service(s)
 
All organisations deliver either products or services (or both).  If you can't think of what your products or your services are, you need to do more work to define what you do.  For example a furniture recycling project will offer some or all of: affordable furniture (product), collections (service), recycling and waste diversion (service), and maybe training/volunteering opportunities (service). 
Profit
 
The difference between the cost of providing a product or service and the price it is sold for. (Non-financial) Rewards: gifts an organisation gives to crowdfunders to encourage them to invest in the enterprise.
Profitable / Profitability
 
An activity which can generate more income than it costs to deliver.  In calculating whether an activity is profitable it is very important to include ALL the costs involved, including any share of wider organisational running costs and repayment of any investment that is required to start it up in the first place.   The higher the proportion of income to costs, the higher the profitability will be.
Profits
 
May be called Surpluses by charitable organisations.  All organisations need to be profitable.
Quorate
 
Refers to the minimum number of people that need to attend and vote at a meeting for decisions to be valid.  This might be an actual number, or a percentage of the total number of people allowed to attend and vote, or a mixture of these two things (e.g. a minimum of 10% of members, or 5 members, whichever is the larger).
Quorum
 
Refers to the minimum number of people that need to attend and vote at a meeting for decisions to be valid.  This might be an actual number, or a percentage of the total number of people allowed to attend and vote, or a mixture of these two things (e.g. a minimum of 10% of members, or 5 members, whichever is the larger).
Restricted/Unrestricted Funds
 
A way of separating and reporting on money and assets held by Charities.  Restricted funds are those given by a funder for a particular purpose and no other.  Unrestricted funds are those that the organisation is free to use as it chooses.
Risk
 
The potential of losing an investment weighed against the potential of making a profit on the investment and/or achieving positive social change through that investment.
Scale up
 
An enterprise growing its operations to sell its products and services to more customers and/or over a wider geographical area.
Social Bank
 
A bank set up with a social and environmental purpose, and concerned with the environmental and social consequences of its investments.
Social Enterprise
 
A business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.
 
Social Impact
 
The effect of an organisation’s activities on society – usually a specific social problem, group of people or local area; also referred to as social value.
Social Investment Finance Intermediaries (SIFIs):
 
Organisations that connect enterprise with a social purpose with investment, either by raising and investment funds or by helping enterprises to find investment.
Social Investor
 
An organisation (or sometimes an individual) that provides financial investment to organisations that are pursuing social aims.  The social investor will always want to see the social results arising from the money they have invested, and will also normally expect some sort of financial return.
Social organisations
 
Organisations that are independent (ie not public-sector) and are pursuing social aims.  These include charities, social enterprises, co-operatives, community organisations and other similar types of organisations.
Social performance
 
A description of the achievements of an organisation in delivering its Mission.  An account of an organisation's social performance might cover a mix of the Outputs, Outcomes and Impact it is achieving.
Stakeholders
 
All the people and organisations that are important to your own organisation - either because they benefit from your organisation, or because they can have a big impact on your organisation, or because there is some other important link between you both.
 
Strategic Development
 
The process which an organisation goes through in order to make important decisions about its long term direction.  Strategy Development should incorporate related decisions on business development, financial planning, resources and social impact.
Strategy / Strategic Plans
 
A statement of the short, medium and long term plans of the organisation, showing how it will develop over time in order to try to deliver its mission.
to challenge / to be challenged
 
This refers to a process of critical questioning to ensure that statements of fact and proposed courses of action are properly scrutinised and justified. Challenge does not imply a lack of trust and should not be an aggressive move - rather it is a natural and essential part of how an organisation needs to arrive at its key decisions. An organisation without challenge is a weak organisation.
 
User / Local Community representation
 
Many organisations try to ensure that they are not just run FOR the people they are trying to serve or support, but run BY those people, or at least take their views into account.  It is part of the mission of many social organisations to put people more in control of things that affect them, and that can start with the social organisation itself.  User representation, or local community representation if the organisation exists to benefit a particular neighbourhood, can be achieved through the Board and/or other decision-making structures.
USP (Unique Selling Point)
 
This refers to the key element of what your product/service is, or how it is delivered, which is only provided by your organisation and not by any other competitor.  It is why a customer will choose to buy from you rather than someone else.  Your USP might be to do with price, value, quality, customer care, or a whole range of other things.
Vision
 
An organisation's Vision is a statement describing what things should ideally be like - for their area, for the group of people they serve, or even for the world!  It is the reality they'd ultimately like to see come about as a result of their work and the work of others. 
Working Capital
 
Money available for an organisation to help run itself.   All organisations need money to cash-flow their operations.  Sometimes income can come in late - after a service has been delivered for example.  So working capital isn't just money to be spent and never seen again (like a grant), it is money that is needed in the short term until payment and profits come in to replenish it.
Year End Accounts
 
Another term for Annual Accounts.