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October 4, 2022
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6 Business Acronyms You Use All the Time but People May Not Understand

6 Business Acronyms You Use All the Time but People May Not Understand

How many acronyms 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’s a problem with this approach, especially if you’re a CEO or other business leader. The people you’re talking or emailing with may not know what those acronyms mean. You may be surprised at how many acronyms seem to confuse people. Years ago, I left my landlady a note to give her a bit of information I thought she should know. I began the note, “FYI…” and she later told me she puzzled over those three letters for a long time before she realized they must mean “for your information.”

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

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

Check out WordFinder’s full list of most-searched acronyms (along with a lot of other information about slang). Here are some that seem likeliest to cause confusion.

1. KPI

KPI, for “key performance indicator,” is the number-one most frequently searched acronym, according to WordFinder. KPI refers to the metrics that help you determine whether or not you are achieving desired outcomes. For example, if you own a restaurant and you introduce a new entree, you might measure how many people order it during the first month that 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 that they like it and will probably continue 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 big marketing campaign and sales go up 15 percent, that may seem like a success. But if the campaign cost you $5 million and the increased sales only brought in an additional $1 million, that’s bad ROI, and thus probably 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 as compared with the more traditional–and less controversial–measure of net income. 

Usually, it’s interest (not taxes, depreciation, or amortization) that’s causing the problem. A company that’s gotten saddled with a mountain of debt due to, say, being acquired, may struggle to show profitability even if the underlying business model is sound. Using EBITDA as a measure instead can tell investors and others whether the company could be profitable if it ever digs itself out from under all the debt.

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

4. SaaS

SaaS (usually pronounced like “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 in your computer. Gmail, for example, is a common example of a SaaS product. A possibly clearer way to say 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 entire science of trying to get your website to come up higher in search on Google and other search engines. This can be achieved by changing the wording on your site, but also its frequency of refreshes, its metadata, and many other factors. No surprise that this has turned into an entire industry.

6. EOD

I’ll admit to having been confused myself the first time I encountered EOD, which means “end-of-day.” As in, “I need that report by end-of-day, or else you’ll be in big trouble!”

While we’re at it, here are a couple of 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 comes up in the subject line of an email and it means that there’s no further information in the body of the email. Usually, someone is conveying a quick piece of information and wants to save you the bother of opening the email itself. For example: “Yes I can meet at 2 pm Thursday EOM.” In other words, “That’s all I have to say.”

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