Small Business Glossary: R

race: A distinction of the different varieties of human beings, distinguished by physical traits, blood types, genetic code, and all unique inherited characteristics.

rack rate: The current or published rate for a room in a lodging establishment before any discount is applied.

rating point: A measure of the percentage of the potential target audience reached by a broadcast ad. If an ad airs during a time projected to reach 15 percent of the audience, it’s assigned 15 rating points.

reach and frequency: The formula used to evaluate the exposure and effectiveness of an advertiser’s media schedule. Calculated by multiplying the number of target audience households exposed to the schedule by the number of times each household is reached.

rebate: An offer a customer can redeem following a purchase, usually redeemed by completing and submitting a rebate form.

rebranding: 1. The process of completely replacing an established brand identity, often following a brand merger or a major change in business direction. Rebranding could also be an attempt to overcome a highly negative established image. 2. Significantly updating a brand identity to make it more contemporary, more competitive, and a clearer reflection of the business or products it represents.

recasting financials; normalizing: Adjusting financial statements of a business to reflect the actual earnings of owners. Accomplished by creating a pro forma or projected income statement that backs out certain expenses for owner benefits, one-time nonrecurring costs, and expenses for purchases that are considered discretionary.

recession: An economic condition usually accompanied by high rates of unemployment, stagnant or falling wages, and a decline in consumer spending, officially declared in the United States by the National Bureau of Economic Research.

recruit: 1. (verb) To enlist new people to participate (usually, to work for) a business. 2. (noun) A person newly hired by a business.

red ink: A colloquial term for a financial loss or deficit. An amount by which the cost of a project, event, or business exceeded its revenues. The term’s origins tie back to earlier times when financial statements were prepared by hand, and red ink was employed to signal losses while black ink marked gains or profits.

reference: The name and contact information, supplied in a resume, for a person who can offer information about or a recommendation of an applicant.

reference check: Research undertaken by a prospective employer to verify information supplied by a job candidate; involves contacting provided character references and previous employers to confirm facts and learn more about job performance, compensation, responsibilities, attendance, skills, and accomplishments.

referral: When a person directs another person to a particular thing; usually a business with which the referring person has had a good experience.

registered trademark: A word, phrase, symbol, or design registered with and protected by the U.S. Patent and Trademark Office; indicated by use of the federal registration symbol .

regulatory agency: A government body with authority over a designated area of activity (for example, transportation, law enforcement, or pharmaceuticals manufacture and distribution) and with responsibility for the oversight and administration of complex rules or laws, including investigating, auditing, issuing permits, and enforcing compliance. The U.S. Food and Drug Administration is one example.

reimburse: To repay or compensate a person or business for expenses, damages, losses, and so on.

representations and warranties: A clause included in most purchase and sale agreements in which the seller promises that information provided is honest and accurate. If the information is deemed otherwise, that can be interpreted as misrepresentation and a reason for buyer default.

request for proposals (RFP): An approach used in procurement that involves issuing an invitation or soliciting qualified suppliers to submit a bid or proposal to provide clearly specified goods or services.

research and development (R&D): 1. The use of basic and applied scientific techniques to gain knowledge used in the design and development of products, procedures, systems, materials, processes, or services. 2. A fiscal line item detailing the amount of money a company has invested or reinvested during a period to find or develop new products.

restricted stock: Stock given or sold at a discount to an employee that can be resold by the employee for an allocated period of time, but with defined conditions set by the employer.

restricted stock endorsements: 1. A condition that defines limits on how stock given or sold at a discount to an employee can be resold by the employee for an allocated period of time. 2. A condition attached to stock sold as part of a business sale that also involves a seller-financed loan, stipulating that shares won’t become outright property of the business buyer until the loan debt is fully repaid.

resume: A statement of a job applicant's previous employment experience, education, and other relevant information.

retail: A form of business in which you sell directly to the consumer from a fixed business location.

retail price: The amount charged to customers for an item in a retail establishment, reflecting the wholesale price and all other expenses plus the retailer’s markup.

retailer: A merchant who buys goods in large quantities from manufacturers, wholesalers, or distributors and resells them in small quantities directly to the general public, usually from a shop or store.

retained earnings: Earnings generated by a business that are left in the business rather than paid out to the owners, reflected on the balance sheet under the category of owner’s equity.

retainer: A fee paid upfront to a service provider, usually as part of a work-for-hire contract through which one secures the services of a professional by paying in advance for work to be specified later. Attorneys frequently employ retainers when committing to provide services before the either the attorney or client are certain about the full scope of work.

return on assets (ROA): A measure of how effectively a business uses its assets, calculated by dividing net income for the period by average assets for the period.

return on equity (ROE): A measure of how well a business provides earnings to owners in relation to their investment in the business. Calculated by dividing net profit after taxes by shareholder's equity.

return on investment (ROI): 1. A measure of the efficiency of one investment in comparison with others. Calculated by dividing funds generated by the investment (called investment return) by total cost of the investment. 2. Profit or loss from an investment of time, energy, or money, usually calculated by comparing the beneficial outcome to the total cost involved.

revitalize: To update a brand identity and reputation.

rightsizing: A term used to describe a variety of actions taken by businesses to reduce, restructure, or reorganize in order to reduce costs and achieve profitability.

risk to reward ratio: An approach for comparing the potential return on an investment of time, energy, or money with the potential downside if the investment opportunity fails to materialize. Usually calculated by dividing anticipated profit (reward) by possible loss (risk).

round of funding: A term used by banks, angel investors, and venture capital investors to describe financing made available to private companies from the seed idea and startup phase to phases titled first-round, second-stage, third-round, and mezzanine or pre-IPO, which is the phase at which a private business sells stock to the public.

royalties: A share of the proceeds or product paid to the owner of a right (such as a patent) so that you can use that right or operate under it, such as in a franchise.

royalty: Compensation paid to an author, artist, or other owner of intellectual property or natural resources. Usually calculated as a percentage of profits received from products sold over a defined period.

RSS: Abbreviation for Really Simple Syndication; a system in which you subscribe to newsfeeds from various Web pages and automatically receive updated information from these sites through your RSS newsreader.

RSVP: An abbreviation for the French phrase "réspondez s'il vous plaît," meaning "please reply."

run of schedule: An advertisement that airs in whatever time slot a radio or television station has available rather than at a specific, and often more costly, time requested by the advertiser. In newspapers, called a run-of-paper placement.

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