Glossary
421 terms revenue leaders use, defined in plain language. Each one comes with why it matters to the number and the question it should prompt.
Commercial services
34 terms
Agreement renewal rateThe share of service agreements up for renewal in a period that renew.Attachment rateThe share of customers who buy an additional service on top of their core agreement.Auto-renewalA contract term that renews the agreement automatically unless either side cancels by a set date.BacklogContracted work not yet performed or billed.Bid listThe list of projects a company is pricing, with due dates, owners and status.Bid-hit rateThe share of submitted bids that are won, counted by number of bids or by dollar value.Book-to-bill ratioOrders won divided by revenue billed in the same period. Above 1 means backlog is growing.Branch P<he profit and loss statement for one branch or location.Budget seasonThe months when buyers set next year's service and capital budgets. Work left out of the budget often waits for the next cycle.Change orderA signed change to a contract's scope, price or schedule after the contract is in place, often while work is under way.Code-driven workWork required by building, fire or safety codes, such as mandated inspections and tests, which creates steady demand.Contract termHow long an agreement runs before it must be renewed, such as one or three years.Deficiency quoteA quote to fix problems found during an inspection, common in fire and life safety.Demand serviceUnplanned service in response to an equipment failure or emergency.Escalator clauseA contract term that raises the price each year by a set percentage or by an index such as inflation.EstimatorThe person who prices jobs and builds bids.Facility managerThe person responsible for a building's operations and its service vendors; often the buyer in commercial services.Fixed-price contractA contract to deliver defined work for one agreed price, with the contractor carrying the cost risk.General contractor (GC)The company that manages a construction project for the owner and hires the subcontractors.Inspection-to-repair conversionThe share of deficiencies found on inspections that become sold repair jobs.Job costingTracking the actual labor, material and other costs of each job against its price.Master service agreement (MSA)A contract that sets the terms for all future work between two companies, with individual jobs ordered under it.National accountA customer with many locations served under one agreement, often with central purchasing.PrequalificationApproval a contractor must earn before it can bid, based on safety, insurance, financial and experience records.Preventive maintenance (PM)Scheduled service that keeps equipment working and heads off breakdowns.Pull-through rateThe share of service visits or inspections that produce additional sold work, such as repairs, upgrades or new agreements.Recurring monthly revenue (RMR)Revenue billed every month under ongoing contracts, such as alarm monitoring, inspection or maintenance agreements.RetainageA share of each progress payment held back until the project is finished, often 5% to 10%.Service agreementA contract for scheduled inspection or maintenance on set terms and price, usually renewed each year.Share of walletThe portion of a customer's total spend in your category that comes to you.Site walkAn on-site visit to see conditions and scope a job before pricing it.SubcontractorA company hired by the general contractor, or by another subcontractor, to do part of the work.Time and materials (T&M)Billing for labor hours at agreed rates plus the materials used, instead of one fixed price.Work orderThe document that authorizes and describes a specific service job.
Private equity and portcos
36 terms
100-day planThe priorities and actions set for the first 100 days after an acquisition or a new leader's arrival.Add-on acquisitionA smaller company bought and combined with an existing platform company to add services, customers or geography.Adjusted EBITDAEBITDA with one-time, non-recurring or non-cash items removed, used to show a company's normal earning power when valuing it.Buy-and-buildA strategy for growing a platform company by acquiring and integrating a series of add-on companies.Carve-outThe purchase of a division or business unit out of a larger company, which must then be set up to run on its own.Commercial due diligence (CDD)Research before a deal into a company's market, customers, competitors and business plan, to test whether its growth case holds up.Confidential information memorandum (CIM)The document a seller's banker sends to prospective buyers, after they sign a nondisclosure agreement, describing the business for sale.Continuation fundA new fund a private equity firm creates to keep owning one or more companies past the original fund's life, with new investors buying in.Data roomThe secure online repository where a seller shares documents with buyers and their advisers during due diligence.Debt covenantA condition in a loan agreement, such as a maximum ratio of debt to EBITDA, that the borrower must meet to avoid default.Dry powderCapital that private equity funds have raised from investors but not yet invested.Earn-outPart of a purchase price paid later, only if the acquired business hits agreed targets such as revenue or EBITDA.EV/EBITDA multipleEnterprise value divided by EBITDA: the usual yardstick for what a company is worth in private equity deals.ExitThe sale of a portfolio company to a strategic buyer, another private equity fund or the public markets, returning cash to the fund.General partner (GP)The firm that manages a private equity fund, makes its investment decisions and oversees the companies it owns.Hold periodHow long a private equity firm owns a company before selling it, commonly about four to seven years.Integration management office (IMO)The team that runs the integration of acquired companies, coordinating plans, owners, timelines and issues across functions.IRRInternal rate of return: the annualized return on an investment, which rewards getting money back sooner.Limited partner (LP)An investor in a private equity fund, such as a pension fund, insurer or endowment, with no role in management and liability capped at its investment.Lower middle marketSmaller private companies below the core middle market, often defined as $5M to $50M in annual revenue, though definitions vary by firm.Management incentive plan (MIP)Equity or cash awards that give a portfolio company's leaders a share of the gain when the owner sells the business.Management presentationThe meeting where a company's leaders present the business to shortlisted buyers and answer their questions during a sale.MOICMultiple on invested capital: the total value an investment returns or is still worth, divided by the amount invested.Monthly operating reportThe monthly package of financial results and key measures a portfolio company sends its sponsor.Multiple expansionSelling a company at a higher valuation multiple, such as EV/EBITDA, than the owner paid for it.Net debt-to-EBITDA ratioDebt minus cash, divided by EBITDA: a measure of how heavily a company has borrowed relative to its earnings.Operating partnerA private equity professional, often a former executive or functional expert, who helps portfolio companies improve operations and results.Platform companyThe first company a private equity firm buys in a sector, chosen as the base for adding other companies through acquisitions.Portfolio companyA company owned fully or in part by a private equity or venture capital fund.Private equity (PE)Investment firms that buy controlling or large stakes in private companies with investor money and debt, improve them, and sell them, usually within several years.Quality of earnings (QoE)An independent review, usually by accountants, that tests whether a company's reported earnings are accurate, repeatable and backed by cash.RecapitalizationChanging a company's mix of debt and equity, often to pay cash to owners, bring in a new investor or reduce debt.Rollover equityOwnership that sellers or managers reinvest in the business when a private equity firm buys it, in place of taking all proceeds in cash.Sell-side processThe organized sale of a company, usually run by an investment bank, from first outreach to buyers through signing.SponsorThe private equity firm that owns or controls a company, usually after buying it with a mix of fund equity and debt.Value creation plan (VCP)The owner's plan for how a portfolio company will grow its value during the hold: the levers, the targets and the timing.
Pipeline and forecasting
32 terms
Average deal sizeTotal value of won deals divided by the number of deals won.Best caseA deal that could close this period if things go well, counted as upside above the commit number.ChampionA person inside the buying company who wants your solution and works to make the purchase happen.Close planA dated list of the steps buyer and seller must complete to sign, agreed with the buyer.CommitA deal the seller and manager expect to close this period and agree to be held to.Deal agingHow long a deal has sat in its current stage or in the pipeline overall.Deal deskA team or process that approves non-standard pricing and terms before a deal is quoted.Decision criteriaThe standards the buyer will use to choose between options.Decision processThe steps, people and approvals the buyer goes through to reach a decision.Economic buyerThe person with final authority to approve the spend.Exit criteriaThe evidence a deal must show before it moves to the next stage, such as a confirmed budget owner.Forecast accuracyHow close the forecast came to the actual result, usually shown as a percentage.Forecast categoriesLabels for how confident the team is in each deal, commonly commit, best case and pipeline.Happy earsA seller hearing buying intent the buyer did not express, which inflates the forecast.Hockey-stick quarterA quarter where most deals close in the final weeks, straining discounting, forecasting and the team.Multi-threadingBuilding relationships with several people in the buying company so a deal does not hang on one contact.Next stepThe specific, dated action the buyer has agreed to take to move the deal forward.No-decision lossA deal that ends because the buyer chose to keep the status quo and buy from no one.Paper processThe steps after a verbal yes: legal review, procurement, security review and signatures.PipelineAll open sales opportunities, with their stage, value and expected close date.Pipeline coverageOpen pipeline for a period divided by the quota still to be closed, showing whether enough is in play to hit the number.Pipeline generationThe creation of new qualified opportunities in a period, from every source.QualificationDeciding whether an opportunity is real and worth pursuing, based on need, authority, timing and fit.Sales cycle lengthThe average time from opportunity creation to close for won deals.Sales forecastA prediction of what will close in a period, built from deal-by-deal judgment and pipeline math.Sales stageA step a deal moves through on the way to a decision, such as discovery, proposal or negotiation.Sales velocityHow fast pipeline turns into revenue: opportunities times win rate times deal size, divided by cycle length.SandbaggingHolding deals out of the forecast, or under-forecasting the number, so that results beat it later.SlippageDeals whose expected close date moves into a later period, one of the most common reasons a forecast misses.Stalled dealAn opportunity with no meaningful buyer action for longer than is normal at its stage.Weighted pipelinePipeline value multiplied by a probability for each deal or stage: a rough expected value of what is open.Win rateDeals won divided by deals won plus deals lost in a period, with a stated rule on whether no-decision outcomes count as losses.
Sales leadership
29 terms
AcceleratorA higher commission rate paid on results above quota.Account planA written plan for growing a major account: its goals, stakeholders, opportunities and next actions.Attainment distributionHow quota attainment spreads across a team, showing whether results come from a broad base of sellers or a few stars.ClawbackA comp plan clause that recovers commission already paid when a deal cancels or a customer does not pay.Front-line managerThe manager who leads salespeople directly, and whose coaching and inspection habits shape the number more than anyone else's.Full-cycle sellerA seller who finds their own prospects and carries each deal from the first conversation to the signed contract, with no handoff in between.Ideal customer profile (ICP)A description of the companies that get the most value from your offer and that you win and keep most often.Key account managementServing a company's most valuable customers with dedicated people, plans and executive attention.Leading indicatorA measure that moves before the result does, such as the rate at which first meetings become qualified opportunities.On-target earnings (OTE)Base salary plus the variable pay a seller earns at 100% of quota.One-on-oneA recurring private meeting between a manager and a direct report about deals, development and obstacles.Performance improvement plan (PIP)A written plan with specific goals and a deadline for an employee who is falling short.Pipeline inspectionA manager testing whether the evidence in a deal supports its stage, amount and close date.Quarterly business review (QBR)A scheduled review of results and plans, held with a customer or within a team, usually every quarter.QuotaThe sales result a person or team is expected to deliver in a period, usually measured in bookings or revenue.Quota attainmentThe share of quota a seller or team delivered in a period, expressed as a percentage.Ramp timeHow long a new seller takes to reach full productivity.Sales capacityThe revenue a team can produce given its number of fully ramped sellers and their average productivity.Sales coachingHelping a seller improve a specific skill or deal through observation, questions and practice, separate from reviewing their numbers.Sales compensation planThe rules for how sellers earn variable pay, including base, commission or bonus, accelerators and limits.Sales enablementEquipping sellers with the training, content and tools they need to sell well at each stage of the sale.Sales hiring scorecardA structured list of the skills and behaviors a role needs, used to rate every candidate against the same standard.Sales operating cadenceThe fixed schedule of reviews a sales team runs, such as pipeline reviews, forecast meetings and one-on-ones, and what each one is for.Sales playbookThe written guide to how a team sells: who to target, what to say and what good looks like at each stage.SegmentationGrouping customers by size, industry, need or buying behavior so each group gets the right sales approach.Span of controlThe number of direct reports one manager leads; too many thins out coaching, and too few raises cost per seller.SPIFFA short-term cash incentive for a specific sales result, such as renewing agreements early.Territory designDividing accounts or geography among sellers so each has a fair opportunity and the whole market is covered.Win-loss analysisStudying why deals were won or lost, ideally by asking buyers, to improve product, pricing and selling.
AI for revenue teams
60 terms
Agent handoffPassing a task, with its context, from one AI agent to another or from an agent to a person.Agent harnessThe software around an AI model that gives it instructions and tools, carries out its actions, manages its memory and sets limits, including when to stop.Agent memoryWhat an AI agent keeps from earlier work, such as past conversations, preferences and decisions, so it does not start from zero each time.Agent observabilityRecording what an AI agent did, why and with what data, so people can check its work, find errors and correct them.Agent orchestrationCoordinating several AI agents so each does its part in the right order and their work comes together into one result.Agent permissionsThe rules that set which systems, data and actions an AI agent may use, and which actions need a person's approval first.Agent skillsPackaged instructions and resources, such as reference files and scripts, that an AI agent can load when a task calls for them.Agent sprawlToo many AI agents built or bought across a company without shared oversight, standards or ownership.Agent-to-agent (A2A)AI agents from different systems or vendors communicating directly with each other to share information and complete a task.Agentic AIAI systems that pursue goals across many steps with some independence, as opposed to answering one prompt at a time.Agentic workflowA multi-step business process carried out by AI agents and software, with set rules for when people review or approve the work.AI agentSoftware that takes a goal, decides the steps and uses tools to complete them, checking in with a person when required.AI governanceThe policies, roles and controls that decide how an organization uses AI and who is accountable for the results.AI SDRSoftware that researches prospects and drafts or sends outreach, work once done by junior sellers in a sales development role.AI-nativeA company or product built from the start around AI, so that removing the AI would leave it largely unable to do its job.Answer engine optimization (AEO)Making content easy for AI assistants and AI search features to find, trust and cite in the answers they give.Autonomy levelHow much an AI agent may do on its own before a person must review or approve its work.Computer useAn AI agent operating software the way a person does, by reading the screen, clicking and typing.Context engineeringChoosing and arranging the information an AI model sees for a task so it has what it needs and nothing that distracts it.Context windowThe amount of information, measured in tokens, that an AI model can consider at once, including the instructions, documents and its own reply.Conversation intelligenceSoftware that records, transcribes and analyzes sales conversations to surface deal risks, coaching moments and trends across a team.CopilotAI built into a tool that suggests, drafts or answers questions while a person stays in control of what happens next.Deep researchAn AI feature that plans a research task, searches many sources over several minutes and writes a report with citations.EmbeddingsLists of numbers that represent the meaning of text, letting software find related content even when the words differ.EvalsStructured tests that measure how well an AI system performs a task against criteria set in advance.Fine-tuningFurther training an existing AI model on specific examples so it performs a particular task, style or format more reliably.GroundingTying an AI's answer to specific sources or data, so each claim can be traced and checked.GuardrailsRules and checks that limit what an AI system can say, access or do, and catch problems before they reach customers or records.HallucinationAI output that sounds plausible and confident but is false or unsupported by any source.Human in the loopA design where a person reviews, approves or can override AI work before it takes effect.Human on the loopA design where AI acts on its own while a person monitors and can step in, instead of approving each action.Inference costThe compute cost of running an AI model each time it produces an answer, usually priced by the number of tokens it reads and writes.Intent dataData suggesting a company is researching a topic or product, usually inferred from web activity on your own site or elsewhere.Knowledge baseThe documents and data an AI system is allowed to search and draw on when it answers a question or does a task.Large language model (LLM)An AI model trained on very large amounts of text that can read, write, summarize and reason in everyday language.LLM as a judgeUsing one AI model to grade another model's output against standards set in advance.Model Context Protocol (MCP)An open standard for connecting AI applications to outside tools and data sources, such as a CRM, calendar or file system.Model driftA decline or change in an AI model's performance over time, as the data it sees or the world it models moves away from what it learned.Multi-agent systemSeveral AI agents, each with a defined job, working together on a larger task than one agent could handle well alone.Open-weight modelAn AI model whose trained weights are published, so companies can download, run and adapt it on their own infrastructure.PromptThe instructions, context and examples given to an AI model to produce a specific output.Prompt injectionHidden or malicious instructions in a document, email or web page that try to make an AI system do something its owner did not intend.Reasoning modelAn AI model that works through a problem in steps before answering, trading speed and cost for better accuracy on harder questions.Reinforcement learningTraining an AI system through trial and error, rewarding the outcomes you want so it learns which actions earn them.Retrieval-augmented generation (RAG)A method where an AI first looks up relevant documents or data, then writes its answer from what it found.Revenue intelligenceSoftware that pulls activity, conversation and deal data together to show pipeline health and forecast risk.Reward functionThe rule that scores an AI system's actions during training, defining what counts as success.Reward hackingWhen an AI system finds a way to score well on its reward without doing what its designers intended.Semantic searchSearch that matches the meaning and intent of a question instead of only its exact words.Shadow AIEmployees using AI tools the company has not approved or cannot see, often with company or customer data.Signal-based sellingPrioritizing accounts and timing outreach based on signals of change, such as funding, hiring, a new executive or a new site.Sub-agentAn AI agent that a lead agent assigns part of a task to, with its own instructions and context.Synthetic dataArtificial data generated to look and behave like real data, used for demos, testing and training without exposing real records.System of actionSoftware that reads data from systems of record and recommends or takes the next action, turning information into decisions and tasks.System of recordThe authoritative source for a type of business data, such as customers, deals or invoices, that other systems and reports defer to.TokenA small chunk of text, often part of a word, that an AI model reads or writes and that providers use to measure usage and price.Tool useAn AI model calling other software, such as a CRM or calendar, to fetch data or take an action, also called function calling.Usage-based pricingPaying for how much a service is used, such as tokens, tasks or records, instead of a fixed fee for each user.Vibe codingBuilding software by describing what you want to an AI model and accepting the code it writes, often without reading or fully understanding it.Voice agentAn AI agent that holds spoken conversations, such as answering inbound inquiries or confirming appointments.
Sales methodologies
23 terms
Account-based sellingTreating a defined set of target accounts as markets of one, with coordinated sales and marketing effort on each.BANTA qualification method that checks whether a prospect has the Budget, Authority, Need and Timing to buy.BATNABest alternative to a negotiated agreement: what you will do if no deal is reached.Bowtie modelA revenue model that treats the customer journey after the sale as equal in weight to the journey before it.Command of the MessageA messaging method that ties the buyer's required capabilities to business outcomes and to how the seller is different.Conceptual SellingUnderstanding the buyer's own concept of what they want to achieve before proposing anything.Consultative sellingActing as an advisor who improves the customer's business results, with the sale as the outcome.Customer Centric SellingSelling built around the buyer's goals and how they buy, through conversations that let buyers reach their own conclusions.Gap SellingSelling by defining the gap between the buyer's current state and the future state they want.Insight sellingLeading with a fresh point of view on the buyer's business to create demand the buyer had not yet defined.MEDDIC and MEDDPICCA qualification method that tests a deal on Metrics, Economic buyer, Decision criteria, Decision process, Identify pain and Champion. MEDDPICC adds Paper process and Competition.Sandler Selling SystemA method built on up-front agreements with the buyer, finding pain early and qualifying out deals that do not fit.SNAP SellingSelling to busy buyers by keeping it simple, being invaluable, staying aligned and raising priorities.Social sellingUsing professional networks such as LinkedIn to find, research and engage buyers.Solution SellingSelling by diagnosing the buyer's pain and helping them picture a solution before discussing the product.SPIN SellingA questioning approach built on four question types: Situation, Problem, Implication and Need-payoff.Strategic SellingA method for complex sales that maps every buying influence on a deal and each one's role in the decision.The Challenger SaleA selling approach in which the seller teaches buyers something new about their business, tailors it to them and takes control of the sale.The JOLT EffectAn approach to overcoming buyer indecision, the fear of making the wrong choice that stalls a buyer who already intends to buy.Trust equationA model in which trustworthiness equals credibility plus reliability plus intimacy, divided by self-orientation.Trusted advisorAn advisor the client relies on for counsel beyond the immediate transaction.Value sellingBuilding the sale around measurable business value to the buyer, and pricing to that value.ZOPAZone of possible agreement: the range of outcomes both sides would accept over walking away.
Leading people
27 terms
360-degree feedbackFeedback on a person gathered from their manager, peers, direct reports and sometimes customers, usually alongside a self-assessment.AccountabilityOwning a result and answering for it, including when it goes wrong.CalibrationManagers comparing and adjusting ratings across teams so the same standard applies to everyone.Change managementLeading people through a change in how the organization works so the new way of working sticks.Decision rightsWho holds the authority to make which decisions in an organization, and who gives input before they are made.DelegationHanding someone a task along with the authority to complete it, while you keep accountability for the result.Difficult conversationA conversation about something important that people find hard to raise, often because the stakes are high and feelings are involved.Eisenhower matrixSorting tasks by urgency and importance to decide what to do now, schedule, delegate or drop.Emotional intelligenceThe ability to recognize and manage your own emotions and to read and respond well to other people's.Employee engagementHow committed and energized people are about their work and their employer.Employee onboardingBringing a new hire up to speed on the role, the people and how work gets done.FeedbackInformation about someone's performance, shared to help them improve or to repeat what worked.High-potential employeeAn employee the organization judges able to grow into much larger roles than the one they hold today.Key performance indicator (KPI)A measure chosen to track progress toward a goal that matters, reviewed on a set schedule.Leadership transitionThe period when a leader moves into a new role, when early choices shape credibility and results.Managing upWorking effectively with your own manager, board or sponsor so that you both succeed.Meeting managementRunning a team's meetings so each one has a clear purpose and ends in decisions and owned actions.MentoringA longer-term relationship in which an experienced person advises a less experienced one on career growth.Performance reviewA periodic, formal assessment of an employee's results and behavior against the expectations set for the role.Psychological safetyA belief shared by a team that it is safe to take interpersonal risks, such as raising a concern or admitting a mistake.RACI matrixA chart that names who is responsible, accountable, consulted and informed for each task or decision.Regrettable attritionLosing employees you wanted to keep, such as strong performers who resign.Situational leadershipAdjusting how much direction and support you give based on a person's skill and commitment for the task at hand.Skip-level meetingA meeting between a leader and the people who report to that leader's direct reports, without the middle manager present.Succession planningIdentifying and developing people who can step into key roles when those roles open.The first 90 daysThe idea that a leader's first three months in a new role set its course, from Michael Watkins's 2003 book of the same name.UnderperformanceResults or behavior that stay below what the role requires over a sustained period.
Customer success and expansion
15 terms
AdoptionHow fully a customer's people use what they bought.Churn riskSigns that a customer may not renew, such as falling use, a lost sponsor or unresolved service problems.Cross-sellSelling an existing customer a different product or service.Customer health scoreA rating that combines signals such as usage, service issues and sentiment to show which customers are at risk and which are healthy.Customer onboardingThe first stage after a sale, when a new customer is set up and starts getting value.Customer referenceA customer who agrees to speak with prospects or be named publicly about their experience.Customer successThe team and practice that makes sure customers get the value they bought, so they renew and buy more.Executive business review (EBR)A meeting with a customer's senior leaders to review results and agree on priorities for the next period.Expansion revenueNew revenue from existing customers through more users, more sites, more services or a higher tier of service.Land and expandWinning a small first deal, then growing the account over time.Net Promoter Score (NPS)A loyalty measure based on how likely customers say they are to recommend you, on a scale from 0 to 10.RenewalA customer extending an agreement for another term.Renewal forecastA prediction of which agreements will renew in a period and at what value.Time to valueHow long a new customer takes to get the first real result from what they bought.UpsellSelling an existing customer a larger or higher-priced version of what they already buy.
Business and financial acumen
37 terms
Accounts receivableMoney customers owe for goods or services already delivered and invoiced but not yet paid.Annual recurring revenue (ARR)The yearly value of recurring subscription contracts in force at a point in time, a measure used mainly by software companies.Balance sheetA snapshot of what a company owns, what it owes and the owners' equity on a given date.BillingsThe amounts a company invoices customers in a period, whether or not the work behind them has been delivered or the cash collected.BookingsThe value of contracts customers sign in a period, whether or not the work has been done or billed.Break-even pointThe volume or revenue at which total revenue equals total costs, so the business makes neither a profit nor a loss.BudgetThe financial plan for a period, set in advance and used to measure performance against revenue, cost and profit targets.CAC payback periodThe number of months of gross profit from a new customer needed to recover what it cost to win them.Capital expenditure (capex)Spending on long-lived assets such as equipment, vehicles, buildings or software, recorded as an asset and expensed over time through depreciation or amortization.Cash flow from operationsThe cash a business generates from its normal operations in a period, before capital spending and financing.ChurnCustomers or recurring revenue lost in a period, usually shown as a percentage of the customers or revenue at the start of that period.Contribution marginRevenue minus variable costs: what each sale contributes toward fixed costs and profit.Customer acquisition cost (CAC)Sales and marketing spend in a period divided by the number of new customers won in the same period.Customer lifetime value (LTV)The gross profit a customer is expected to generate over the whole relationship.Days sales outstanding (DSO)The average number of days it takes a company to collect payment after a sale is invoiced.EBITDAEarnings before interest, taxes, depreciation and amortization: a common stand-in for the cash profit a business generates from operations.Fixed and variable costsFixed costs stay flat as volume changes within a period, while variable costs rise and fall with it.Free cash flowCash flow from operations minus capital expenditures: the cash left after running the business and investing in its assets.Gross marginRevenue minus the direct cost of delivering it, shown as a percentage of revenue.Gross revenue retention (GRR)Recurring revenue kept from existing customers after cancellations and downgrades, before counting any expansion, as a percentage of starting revenue.List priceThe published or standard price of a product or service before any discount.Net incomeProfit left after all expenses, interest and taxes, reported at the bottom of the income statement.Net revenue retention (NRR)Recurring revenue now from customers you had a year ago, including expansion and losses, divided by their recurring revenue a year earlier.Operating expense (opex)Day-to-day spending to run the business, such as salaries, rent, travel and software, expensed in the period it occurs.Operating leverageHow much faster operating profit grows or falls than revenue, driven by the share of costs that are fixed.Operating marginOperating income divided by revenue: the share of each revenue dollar left after operating costs, before interest and taxes.Percentage of completionA way to recognize revenue on a long project in proportion to the work completed, often measured by costs incurred against total estimated costs.Price realizationThe share of list price a company collects after discounts, rebates and other concessions.Profit and loss statement (P&L)The financial report that shows revenue, costs and the resulting profit or loss over a period such as a month, quarter or year.Return on investment (ROI)The gain from an investment divided by its cost, usually shown as a percentage.RevenueMoney a company earns from selling goods or services in a period, counted when the work is delivered under accounting rules.Revenue recognitionThe accounting rules that decide when revenue counts as earned, generally as the company delivers the promised goods or services to the customer.Run rateCurrent performance extended over a full year, such as last month's revenue times 12.Unit economicsThe revenue and cost tied to one unit of business, such as one customer, one contract or one job, used to judge whether growth is profitable.Value-based pricingSetting price by the value the customer gets, instead of by your cost or a competitor's price.Variance analysisExplaining the gap between budgeted or forecast results and actual results, and what caused it.Working capitalCurrent assets minus current liabilities, the short-term funding a business runs on, which growth consumes when cash gets tied up in receivables or inventory.
Strategy
47 terms
Adjacency expansionGrowing by moving from the core business into a closely related market, customer group or capability.Balanced scorecardA measurement system that tracks performance from four perspectives: financial, customer, internal process, and learning and growth.Big-bang disruptionA new offer that arrives both better and cheaper than what incumbents sell, so buyers across the market switch at almost the same time.Blue ocean strategyGrowing by opening market space that rivals do not yet serve, so sales come from new demand with little head-to-head competition.Business modelHow a company creates, delivers and captures value.Competitive advantageWhat lets a company earn better returns than its rivals over time, through lower cost or an offer buyers value more.Consumption chainThe full set of steps a customer goes through with a product, from finding it to disposing of it, each a chance to stand out.Core competenciesThe collective skills and technologies that let a company serve many markets and that rivals find hard to copy.Corporate strategyHow a company with several businesses decides where to invest and how the parts add value together.Cost leadershipCompeting by becoming the lowest-cost provider in an industry, so the company can earn higher profits at market prices or win share on price.DifferentiationOffering something buyers value and will pay more for, which rivals cannot easily match.Discovery-driven planningPlanning a new venture by stating its assumptions openly and testing them as you go, so the plan changes as you learn.Disruptive innovationThe pattern in which a newcomer starts with a cheaper, simpler product for customers that market leaders neglect, then improves it until it takes the leaders' core customers.Economic moatA durable advantage that protects a company's profits from competitors.Enterprise Value MapDeloitte's one-page framework that connects the actions a company can take to the drivers of shareholder value.Five forcesA model of how industry profitability is shaped by rivalry, buyer power, supplier power, new entrants and substitutes.Hardball strategyCompeting aggressively to win decisively, within legal and ethical limits.Jobs to be doneThe idea that customers hire a product to make progress in a specific situation, so the job explains demand better than demographics do.Judo strategyA way for a smaller company to compete by turning a larger opponent's size and strengths against it.Lean startupBuilding a new business through fast experiments with real customers, learning what works before scaling.Mission statementA short statement of what a company does, for whom and why.Network effectsWhen a product becomes more valuable to each user as more people use it.Objectives and key results (OKRs)A goal system that pairs a qualitative objective with a few measurable results that show whether it was met.Operational effectivenessDoing the same kinds of work as competitors with better results, a gain rivals can copy, so on its own it is hard to hold as an advantage.Operational transparencyShowing customers the work being done for them, which can raise trust and the value they perceive.Platform strategyCreating value by connecting groups of users, such as buyers and sellers, where each side attracts the other.Playing to winA strategy approach built on five linked choices covering the winning aspiration, where to play, how to win, the capabilities needed and the management systems behind them.Pricing powerThe ability to raise prices without losing customers.RAPID decision rolesA way to assign decision roles: who recommends, who must agree, who performs, who gives input and who decides.Real optionsTreating strategic investments as options: smaller bets that keep the right, without the obligation, to invest more later.Resource-based viewThe view that lasting advantage comes from a firm's own resources when they are valuable, rare, hard to imitate and hard to substitute.Shared valueA strategy in which a company earns its profit by solving a social problem, so the business gain and the social gain come from the same work.Stakeholder strategyRunning a company with explicit attention to customers, employees, suppliers, communities and shareholders.Strategic planningSetting long-term priorities and deciding how to allocate resources to them.Strategic risk managementManaging the risks a company takes on deliberately to pursue its strategy, separate from preventable risks.StrategyA set of choices about where to compete and how to win that sets a company apart, including what it will choose not to do.Strategy executionThe work of turning a chosen strategy into results in the day-to-day running of a business.Strategy mapA one-page picture of how a company's objectives connect, cause to effect, to create value.Strategy statementA short statement of a company's objective, scope and advantage that guides everyday choices.Strategy-to-performance gapThe shortfall between the results a strategy promises and the results a company delivers.Sustainable Value MapDeloitte's framework that extends the Enterprise Value Map from shareholders to employees, customers and the public, and the environment.SWOT analysisA review of a company's strengths, weaknesses, opportunities and threats.Total addressable market (TAM)The total revenue available if a company won every potential customer in its market.Transient competitive advantageThe view that competitive advantages now last a short time, so companies must keep building new ones while exiting old ones.Value chainThe set of activities a company performs to design, make, sell, deliver and support what it offers.Value stickA model of value running from customers' willingness to pay down to suppliers' willingness to sell, where strategy widens the gap and decides who captures it.VisionA description of what a company aims to become over the long term.
RevOps and CRM data
15 terms
AccountA CRM record for a customer or prospect company, holding its contacts, opportunities, agreements and activity in one place.Activity captureAutomatically logging emails, meetings and calls to the CRM so sellers do not have to record them by hand.Configure, price, quote (CPQ)Software that helps sellers build accurate quotes from products, prices, discounts and approval rules.CRM hygieneHow complete, current and accurate the data in the CRM is, which decides whether reports and forecasts built on it can be trusted.Customer relationship management (CRM)The system that records customers, contacts, deals and activity, so the whole revenue team works from one shared record.Data enrichmentAdding missing details, such as company size, industry or job title, to CRM records from internal or outside sources.IntegrationA connection that lets two software systems share data or trigger actions in each other, usually through an API.LeadA person or company that may buy but has not yet been qualified as a real sales opportunity.OpportunityA CRM record for a potential sale, with its value, stage, expected close date and the account it belongs to.Quote-to-cashThe full process from building a quote through contract, order, invoice and collecting payment.Revenue operations (RevOps)The team that runs the systems, data and processes behind marketing, sales and customer success, so all three work from one set of numbers.Sales analyticsAnalysis of sales data to show what is working, what is at risk and where leaders should act.Sales tech stackThe set of software tools a sales team uses, from the CRM to prospecting, quoting, forecasting and AI tools, and how they connect.Single source of truthOne agreed place where each type of data lives, so every report, forecast and board deck starts from the same numbers.Stage historyThe record of when each deal entered and left each pipeline stage, which shows how deals move in practice.
Marketing and demand
15 terms
Channel salesSelling through partners such as resellers, distributors or referral firms.Content marketingPublishing useful material that attracts buyers and builds trust before they talk to sales.Conversion rateThe share of people or deals that move from one step to the next, such as visitor to lead or quote to signed work.Cost per leadMarketing spend divided by the number of leads it produced.Demand generationMarketing work that creates interest and qualified opportunities for sales.Hand-raiserA buyer who asks for contact on their own, such as starting a trial, requesting a quote, booking a call or completing a diagnostic.Ideal buyer personaA description of the person who buys or influences the purchase: their role, goals and concerns.Lead scoringRanking leads by fit and behavior so sellers work the best ones first.Marketing attributionAssigning credit for pipeline and revenue to the marketing touches that produced them.Marketing qualified lead (MQL)A lead marketing judges ready for sales attention, based on fit and engagement.Pipeline sourcedPipeline created directly by a channel, such as marketing or partners, as opposed to pipeline it only touched.Product-led growth (PLG)A strategy where the product itself drives acquisition, often through free trials or free tiers.Sales qualified lead (SQL)A lead sales has accepted and confirmed as a real potential opportunity.Sales-led growthA strategy where sellers drive acquisition through direct conversations.Speed to leadHow quickly a seller responds after a buyer reaches out.
Venture-backed companies
28 terms
Board seatA position on the company's board of directors, often granted to a round's lead investor.Bridge roundShort-term funding, usually from existing investors, to carry a company to its next milestone or round.Burn multipleNet cash burned divided by net new ARR: what it costs in cash to add each dollar of recurring revenue.Burn rateHow much more cash a company spends each month than it brings in.Cap tableThe record of who owns what share of the company, including stock, options and instruments that will convert into shares.Convertible noteA loan to a startup that converts into equity at a later round, often at a discount or a capped price.Default aliveA startup on track to reach profitability with the money it already has, if expenses hold steady and revenue keeps growing at its recent rate.DilutionThe drop in existing owners' percentage when new shares are issued.Down roundA funding round at a lower valuation than the one before.Founder-led salesThe stage when the founder sells personally, before handing selling to a team.Investor updateA regular report from founders to investors on results, cash, plans and asks.Lead investorThe investor who sets the terms of a round and usually puts in the most money.Liquidation preferenceInvestors' right to get their money back, or a multiple of it, before common shareholders when the company is sold.Magic numberA software sales-efficiency measure: new annualized recurring revenue in a quarter divided by the prior quarter's sales and marketing spend.Option poolShares set aside to grant to employees as stock options.Pre-money and post-money valuationPre-money valuation is what a company is worth just before new money comes in. Post-money valuation adds the new investment.Pro rata rightsAn investor's right, without obligation, to invest in later rounds to keep its ownership percentage.Product-market fitThe point where a product meets a strong market need and customers start pulling it from you.Rule of 40A software benchmark: revenue growth rate plus profit margin should total at least 40%.RunwayHow many months a company can operate before its cash runs out at the current burn rate.SAFESimple agreement for future equity: an investment that converts into shares at a later priced round.Seed roundAn early funding round used to prove the product and win the first customers, often the company's first outside money.Series AUsually the first priced round from venture investors, raised to build a repeatable way to win customers.Series B and laterRounds raised to scale what already works: more sellers, more markets, more product.T2D3A growth path for software companies: starting from about $2 million in ARR, triple revenue twice, then double it three times.Venture capital (VC)Investment firms that fund young, high-growth companies in exchange for equity, expecting a few large wins to pay for many losses.Venture debtLoans to venture-backed companies, often alongside an equity round, that dilute owners less than raising the same amount as equity.VestingEarning ownership of granted shares or options over time, often four years with a one-year cliff.
Public companies
23 terms
Activist investorA shareholder who buys a significant stake in a public company to push for changes in strategy, leadership, operations or capital allocation.Beat and raiseA quarter in which results come in above the analysts' consensus and management raises its guidance for the rest of the fiscal year.Consensus estimateThe average of the forecasts published by analysts who cover a company, usually for revenue and earnings per share in a coming quarter or year.Earnings callThe conference call, usually held each quarter, where a public company's management presents results and outlook and answers analysts' questions.Earnings per share (EPS)A company's net income available to common shareholders divided by the average number of common shares outstanding during the period.Enterprise value (EV)Market capitalization plus debt, minus cash: an estimate of what the whole business is worth to all of its owners and lenders.Fiscal yearThe 12-month period a company uses for its accounts and reporting, which can end in any month and may differ from the calendar year.Form 10-K and Form 10-QThe annual report US public companies file with the SEC, with audited financial statements and management's discussion. The 10-Q is the unaudited quarterly version.Form 8-KThe current report a US public company files with the SEC to announce major events between its annual and quarterly reports, such as an acquisition or a leadership change.GAAPGenerally accepted accounting principles: the US rules for preparing financial statements, set by the Financial Accounting Standards Board (FASB).GuidanceThe ranges management gives investors for future revenue, earnings or other metrics, usually for the next quarter or the full fiscal year.Investor dayAn event where management lays out long-term strategy, financial targets and capital priorities for investors and analysts, usually webcast publicly.Investor relations (IR)The function that manages communication between a public company and its shareholders, analysts and the wider financial community.Market capitalizationThe market value of a company's equity: the current share price multiplied by the total number of shares outstanding.Material nonpublic information (MNPI)Information about a company that a reasonable investor would likely consider important and that has not yet been made available to the public.Non-GAAP measureA financial figure that adjusts a GAAP result, such as adjusted EBITDA or earnings excluding stock-based compensation, which public companies must reconcile to GAAP.Price-to-earnings ratio (P/E)A company's share price divided by its earnings per share, showing how many dollars investors pay for each dollar of annual earnings.Proxy statementThe SEC filing that tells shareholders what they will vote on at a meeting, including director elections and executive pay.Publicly traded companyA company whose shares trade on a stock exchange and that must report its results publicly, through annual, quarterly and current reports filed with the SEC.Quiet periodThe weeks before a company reports earnings when it limits what it says to investors and analysts about the current quarter.Remaining performance obligations (RPO)Contracted revenue a company has not yet recognized, which public companies disclose under ASC 606 with an explanation of when it will become revenue.Sarbanes-Oxley (SOX)The 2002 US law that requires public companies to maintain and report on internal controls over financial reporting, with CEO and CFO certification of results.Segment reportingResults broken out by business line or region in a public company's financial statements, following the way management reviews the business internally.
Ask these questions of your own number.
Management OS tells the revenue leader where to act to hit the number: which deals are real, who needs coaching and how, and where your own involvement moves it.