Reference
The Dictionary.
The terms that decide whether a business is healthy, defined properly — what each one means, how it is worked out where it is a number, and what it actually tells you.
These are definitions, not advice. None of them can tell you what to do about your business, because none of them know your business.
Business diagnostic
A structured examination of a business — its foundation, structure, numbers and strategy — carried out before any solution is proposed, in order to find the cause of a problem rather than its symptoms.
Business health check
A short structured review of a business across its main areas — money, customers, team, owner load and direction — used to locate where a problem sits before committing to deeper work.
Owner dependency
The degree to which a business only functions because the owner is personally in it — holding the knowledge, the relationships, the decisions, or the work itself.
Wages percentage
Total wages expressed as a percentage of revenue over the same period — the standard measure of what a business spends on people to earn what it earns.
Break-even
The level of revenue at which a business covers all of its costs and makes neither a profit nor a loss — the point where everything above it starts to be worth something.
Goodwill
The part of a business's sale price that is not accounted for by its physical and identifiable assets — what a buyer pays for the earnings the business will keep producing after the sale.
Cap table
A record of who owns what share of a company, including everything not yet issued but promised — options, convertible notes and agreed future allocations.
EBITDA
A measure of profit that strips out interest, tax, depreciation and amortisation, in order to show what the trading operation earns before financing and accounting decisions are applied to it.
SOP (standard operating procedure)
A written record of how a specific task in a business is done, detailed enough that a competent person who has not done it before can do it correctly without asking.
Knowing the words isn't the same as knowing which one is your problem.
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