As someone who will soon be starting their own business, you are likely going to encounter some terms that are completely unfamiliar to you—but no worries! Our glossary of common business terms will help to clear up the confusion and make it easier for you to understand the language.
Common Terms Used in Business
Today, there are more business startups in the world than ever before, and with them come the following terms. You may or may not have heard some of these before.
Accelerators refer to those organizations, individuals, or programs that offer services to small businesses to help them grow. Accelerators can offer the resources, mentorship, and advice that you need to keep your momentum going.
You’ll likely hear this term while your business is still in its early stages. Angel investors, also called business angels, provide money to startups for the purpose of fueling their growth in the beginning. These investors will also provide capital in exchange for a share in a company.
This term refers to the code used to create a website or application. It also refers to the maintenance of such code, and/or the servers or databases involved in the creation of the back end.
When a business is engaged in bootstrapping, it’s getting funding for its business from personal resources. Those resources can be family and friends, or funds can come from the business owners themselves.
This buzzword refers to how fast a business is spending its money. Another way this is expressed is via the term “run rate,” and you may overhear these terms being used at a networking event or other business gathering.
A corporation is a legal business entity. This particular entity separates the business from its owners. However, corporations hold the right to borrow and loan money, pay taxes, own assets, enter into contracts, and hire employees, to name a few.
Churn rate refers to the rate that a business’s customers are leaving via account cancellation, unsubscribing, and similar exits. A high churn rate will require a business to attract a high number of customers just to maintain their last month’s revenue.
This term describes a funding model that businesses can use to raise money. The process of crowdfunding involves smaller amounts of money being donated by a large number of people online, as opposed to a large sum of money from one or a handful of investors.
Although this may sound like something negative, in business, disruption refers to the creation of new markets, and new markets mean a higher number of opportunities for businesses.
Due diligence is another word for homework. In business, it refers to the thorough investigation of a person or another business prior to signing a contract or other agreement.
An elevator pitch is the buzzword for the proposal of a business-related idea. The etymology behind this term is that the message is short and so to-the-point that it can be delivered in the time it takes for an elevator to make a trip between floors.
That’s you; the person responsible for assuming the risk and operating and organizing your business.
The front end refers to how a website or application appears to the person who is visiting, using, and interacting with it.
When a programmer is able to not only create the code for a website or application but is also proficient in developing an attractive and effective experience for users, they are referred to as a full stack developer.
Growth hacking is a marketing trend that’s getting a lot of attention lately. It involves using various strategies that are both low in cost and creative, to get as many customers as possible to a particular business as fast as possible for the lowest cost.
This term is used to describe a person who has been contracted to perform work or provide services to another person or company without being an employee of that person or company.
A joint venture sees the agreement between two or more individuals or businesses to pool their resources to complete a business activity. In a joint venture, a legal entity is created in order that all involved parties can share in the profits and losses of the venture.
KPI stands for key performance indicators. KPIs can be found in your business plan; they are the statements made in your plan which reveal what your goals are for accomplishing certain tasks within a specific time frame. For example, your statement may have been that you will have 10,000 social media followers nine months from the launch of your website.
This particular term stands for a business arrangement by which the daily operations of a business are controlled by one general partner or more but funded by silent partners. The silent partners are responsible for losses according to the amount they invested in the business.
Line of Credit
A line of credit allows a business owner to obtain needed capital, with interest paid only on the amount they borrow. The line of credit works like a credit card, where regular payments are made on the outstanding amount.
Marketing is the term used to describe the process of brand promotion, research, sales, and distribution of a business’s product or service. Marketing can include the advertising, pricing, and packaging of a product.
Networking is the development of business contacts for the purpose of gaining more knowledge, expanding your business base, and forming business relationships for future benefit.
This term refers to the act of acquiring the standard operational business services like accounting, IT, and payroll from another business.
When a business makes a major change to their business model, product, or ideal customer profile, they are engaging in the act of pivoting. Pivoting typically occurs following feedback from customers, out of the need to improve ROI, or due to innovation.
This term stands for “software as a service.” A method of licensing and delivery, SaaS allows for the access of software online via subscription, as opposed to outright purchase and installation on computers.
A sole proprietorship is a business form that is not a legal entity. The simplest business form, sole proprietorship means that a business operates under a single owner who is personally responsible for any debts their business incurs.
Traction is occurring when a business is showing clear evidence that a product or service has shown a sudden upward shift in growth, sales, and customer base.
When someone is referred to as a thought leader, they are a person who talks and shares thoughts about trends in their area of specialization before they emerge. They are someone who always seems to be ahead of the game when it comes to industry trends.
USP stands for “unique selling point” or “unique selling proposition” and represents the single thing about a business or its product or service that makes it stand out from its competition.
The value proposition tells potential customers and partners why they should be in business with you instead of your competition. It states upfront the benefits of what a business sells.
Helping You Get Your Business Permits—Fast
Now that you’re more familiar with some of the most common entrepreneur vocabulary words, it’s time to consider what permits you’ll need to conduct business legally in your state. The sellers permit filing service offered by FastFilings allows you to spend less time on paperwork and more time on your business. Learn more about our 3-step process online.