So, you’ve decided to embrace your entrepreneurial spirit and start your own business – that’s fantastic. However, you’re going to encounter some obstacles along the way.
One of the first things you need to do is learn the language of business, which includes many confusing acronyms. Below are examples that need to be understood and implemented.
IP – Intellectual Property
Intellectual property (IP) is all the elements of your business that are novel or original, basically the pieces that separate you from your competition. Your IP needs to be registered with The Companies and Intellectual Property Commission (CIPC) which explains that ‘IP can exist in various forms; a new invention, brand, design or artistic creation.’ Certain IP can be registered so that another company cannot legally replicate them.
Two prominent types of IP protection
TM – Trademark
Logos, words, letters, numbers, colours, a phrase, and even sounds can carry a registered trademark. A great example is Nike’s famous phrase Just Do It™. The trademark identifies the goods (which, in Nike’s case, would be sports shoes and apparel) as completely distinctive from those of other traders. Only Nike has the right to use, license or sell under the trademark. If another company uses Nike’s phrase, they can be prosecuted for trademark infringement.
© – Copyright
A copyright protects specific categories of work which include but are not limited to music, art, literature and computer programmes such as Microsoft Word©. CIPC explains that copyright is ‘an exclusive right granted by law for a limited period’. Most of these categories are automatically protected. The only exception is cinematograph films which do need to be registered. Unlike a trademark, for work to be entitled to copyright, it needs to be original and in a material form.
USP – Unique selling proposition
What makes your business unique? Why should consumers buy your product and/or service? Once answered, these two questions will unveil your unique selling proposition (USP).
An article published on Entrepreneur South Africa explains that ‘one way to start is to analyse how other companies use their USPs to their advantage. This requires careful analysis of other companies’ ads and marketing messages.’ A USP is more than the characteristics of a product and/or service; it’s what is being sold. For example, the American retail giant, Wal-Mart says that it sells bargains.
Bargains are the USP peg on which Wal-Mart bases its marketing strategy. Other USP pegs include product characteristics, price structure, placement strategy (location and distribution) or promotional strategy. If you are struggling to define your USP, a full-service digital marketing agency can assist you through marketing strategy and consultation sessions.
POC – Proof of concept
Imagine that you’re pitching your product to potential investors; they ask you about your POC, and you hand them a prototype, their faith in your business acumen will fade. POC and prototype are often used interchangeably, but they are two different things and serve separate purposes.
A proof of concept is an experiment or exercise used to test an idea, design or theory. Its primary purpose is to demonstrate and verify its functionality and what can be accomplished in its development. A prototype, on the other hand, is the resulting interactive model that shows design, functionality and layout.
ROI – Return on investment
ROI is one of the most common business terms. It’s a performance metric that is utilised to gauge whether or not a business is profitable. This is a central measurement that needs to be carefully tracked and analysed because it will determine whether your business is meeting its financial objectives, whether there’s scope for scaling or if it may be at the right stage to attract investors.
At fio.life, our independent financial advisers can help you assess your ROI and provide steps for expansion or improvement. The bottom line is that a profitable business should have a net positive ROI.
With the understanding of these acronyms, you’ll be in a better position to shape your start-up business’s identity.