6 Business Acronyms You Use All The Time But People Might Not Understand

How many abbreviations do you use during the average workday? If you’re like most Americans, the answer is probably too many to count. We’re drawn to all sorts of abbreviations — because they save time and keystrokes, or because they make us feel like we’re in the know.

There is a problem with this approach, especially if you are a CEO or other business leader. The people you talk to or email may not know what those abbreviations mean. You might be surprised at how many acronyms seem to confuse people. Years ago I left my landlady a note giving her some information I thought she should know. I started the note, “FYI…” and later she told me that she puzzled over those three letters for a long time before realizing they had to mean “for your information”.

She’s not alone. “FYI” is the fourth most searched for acronym, according to research from word game site WordFinder. Surprisingly, “CEO” is the second most searched.

While I think you can safely use the term “CEO” and expect anyone who listens — especially anyone who works for you — to understand what you mean, there may be other acronyms in your verb vocabulary that your co-workers or employees are frantically searching for on Google. . Or worse, they may just not understand what you mean to say.

Check out WordFinder’s full list of the most searched for acronyms (along with lots of other slang information). Here are some that are most likely to cause confusion.

1. KPI

KPI, for ‘key performance indicator’, is the most searched acronym according to WordFinder. KPI refers to the metrics that help you determine if you’re getting the results you want. For example, if you own a restaurant and introduce a new entree, you can measure how many people order it in the first month it’s on the menu. But a better KPI might be the number of repeat customers who order it a second or third time, indicating they like it and are likely to keep eating it.

2. ROI

ROI, or “return on investment” is another way of asking the question: is this initiative a success or not? For example, if you launch a major marketing campaign and sales increase by 15 percent, that may seem like a success. But if the campaign cost you $5 million and the increased sales brought in just $1 million more, that’s a poor ROI and likely a bad investment.

3. EBITDA

EBITDA stands for “earnings before interest, taxes, depreciation and amortization”. It’s an alternative way of measuring a company’s profitability compared to the more traditional — and less controversial — measure of net income.

Usually, it’s the interest (not taxes, depreciation, or amortization) that causes the problem. A company saddled with a mountain of debt, for example because it was acquired, may struggle to demonstrate profitability, even if the underlying business model is sound. Instead, using EBITDA as a measure can tell investors and others whether the company can be profitable if it ever gets out of debt.

To use another confusing acronym: EBITDA is not an acceptable measurement under GAAP – generally accepted accounting principles.

4. SaaS

SaaS (usually pronounced “sass”) stands for “software-as-a-service,” which is an unnecessarily complex way of saying that the software resides on someone else’s servers rather than your computer. For example, Gmail is a well-known example of a SaaS product. A possibly clearer way of saying the same thing is “cloud-based software.”

5. SEO

You may be familiar with the term SEO for “search engine optimization”, but not everyone is. It refers to the whole science of trying to get your website higher in the search results of Google and other search engines. This can be accomplished by changing the wording on your site, as well as the refresh rate, metadata, and many other factors. No wonder this has become an entire industry.

6. EOD

I admit I was confused myself the first time I came across EOD, which means ‘end of the day’. As in, “I need that report at the end of the day or you’ll be in big trouble!”

While we’re at it, here are a few other potentially confusing end-related acronyms: EOL, or “end of life,” which sounds very ominous, but simply refers to a product or service that will soon be taken off the market. And EOM, for ‘end of message’. EOM usually appears in the subject line of an email and this means that there is no further information in the body of the email. Usually someone is passing along a quick bit of information and wants to save you the trouble of opening the email yourself. For example: “Yes, I can meet EOM at 2 p.m. on Thursday.” In other words, “That’s all I have to say.”

The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.

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