BIZORYN OPEN LIBRARY
Twenty practical definitions for pricing, operations and customer decisions. Examples are illustrative, not industry benchmarks.
20 terms
What one sale leaves after the variable costs included in your calculation.
Example: A 100-unit sale with 60 in variable costs leaves 40 before fixed costs and any omitted expenses.
Watch for: It is not the same as net profit.
Link to this definitionContribution divided by revenue, expressed as a percentage.
Example: 40 of contribution on 100 of revenue is a 40% contribution margin.
Watch for: Use the same cost categories in each comparison.
Link to this definitionThe sales quantity needed to cover fixed costs with positive contribution per sale.
Example: 1,000 of fixed cost divided by 40 contribution requires 25 sales.
Watch for: Round units up; a zero or negative contribution cannot cover fixed costs.
Link to this definitionA cost that stays broadly unchanged within the activity range and period being planned.
Example: Monthly base rent can stay the same across a small change in order volume.
Watch for: Fixed costs can jump when capacity expands.
Link to this definitionA cost that changes with units sold or work delivered.
Example: Packaging and transaction fees can increase with every order.
Watch for: Separate per-order fees from percentage fees before calculating.
Link to this definitionMoney actually moving into and out of a business over a period.
Example: A completed invoice may count as revenue before its payment reaches your bank.
Watch for: Revenue does not guarantee cash is available.
Link to this definitionHow long available cash might last at an assumed net cash burn rate.
Example: 12,000 available cash at 3,000 net burn per month suggests four months.
Watch for: Lumpy bills and changing receipts make a straight-line estimate fragile.
Link to this definitionCustomers lost during a period divided by customers at the start of that period.
Example: 10 lost from an opening group of 200 gives 5% customer churn.
Watch for: New customers do not belong in the opening denominator.
Link to this definitionThe share of an opening customer group that remains at the end of a defined period.
Example: 190 remaining from 200 gives 95% retention for that group.
Watch for: Define what counts as active and how reactivation is handled.
Link to this definitionA group measured together because its members share a defined starting event or characteristic.
Example: Compare customers who first purchased in the same month.
Watch for: Mixing different acquisition periods can hide changes.
Link to this definitionCompleted target actions divided by eligible opportunities in the same measurement window.
Example: 8 purchases from 100 qualified inquiries gives an 8% inquiry conversion rate.
Watch for: A visitor-to-sale rate and an inquiry-to-sale rate have different denominators.
Link to this definitionThe acquisition expenses you include divided by new customers acquired in the matching period.
Example: 1,200 in included acquisition costs for 12 new customers gives 100 per customer.
Watch for: State whether staff time, agency fees and tools are included.
Link to this definitionHow long an initial investment takes to recover at an assumed positive net benefit per period.
Example: 1,000 setup cost at 250 net benefit per month implies four months.
Watch for: This simple model ignores discounting and changing benefits.
Link to this definitionNet benefit over a defined horizon divided by the investment cost for that same horizon.
Example: 6,000 benefit against 4,000 total cost gives a 50% return.
Watch for: State the horizon; saved staff time is not automatically cash profit.
Link to this definitionA measurement taken before a change to give the later result a fair reference.
Example: Record current weekly handoff errors before introducing a checklist.
Watch for: Use comparable periods and explain unusual events.
Link to this definitionThe number of observations included in an analysis after stated exclusions.
Example: A review of 30 completed orders has 30 order observations.
Watch for: A large sample does not repair a biased selection method.
Link to this definitionThe middle value after observations are sorted; average the two middle values for an even count.
Example: For 2, 3 and 20 minutes, the median is 3 minutes.
Watch for: Report spread too; a middle value can hide a long tail.
Link to this definitionThe transfer of work, information and responsibility to the next person or system.
Example: A paid order moves to fulfillment with its SKU, quantity and delivery address.
Watch for: A sent message does not prove the next owner accepted the work.
Link to this definitionA property that lets the same intended operation be retried without repeating its business effect.
Example: A repeated payment event should create one fulfillment request.
Watch for: Use stable identifiers and stored processing state.
Link to this definitionThe explicitly chosen record that resolves competing versions of a fact.
Example: Choose which system determines sellable inventory before connecting channels.
Watch for: A second spreadsheet without a reconciliation rule creates ambiguity.
Link to this definitionBIZORYN. “Know what the number means..” Updated September 14, 2026.
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Source: https://bizoryn.com/library/reference · BIZORYN · Updated September 14, 2026