ENTREPRENEUR VOCABULARY

 list of business terms commonly used by entrepreneurs when transacting business, arranged in alphabetical order along with their definitions:

A

  1. Accounts Payable: Money owed by a business to its suppliers or creditors.
  2. Accounts Receivable: Money owed to a business by its customers for products or services delivered.
  3. Advisory Board: A group of experienced individuals who provide guidance and advice to a business.
  4. Assets: Resources owned by a business that have economic value.
  5. Amortization: The process of gradually repaying a loan or writing off an intangible asset over time.
  6. Annual Report: A comprehensive report on a company's activities and financial performance over the past year.
  7. Application Programming Interface (API): A set of tools and protocols that allows different software applications to communicate with each other.
  8. Asset Management: The process of managing and optimizing a company's assets to achieve its goals.
  9. Attribution: The process of determining which marketing efforts are responsible for driving customer actions.

B

  1. Balance Sheet: A financial statement that shows a company's assets, liabilities, and equity at a specific point in time.
  2. Benchmarking: Comparing a company's performance metrics to industry bests or best practices from other companies.
  3. Business Model: A company's plan for how it will generate revenue and make a profit.
  4. Bootstrapping: Funding a startup with personal savings or operating revenue rather than external investment.
  5. Break-Even Point: The level of sales at which total revenues equal total costs, resulting in neither profit nor loss.
  6. Brand Equity: The value of a brand based on consumer perception, recognition, and loyalty.
  7. Business Development: Activities and strategies aimed at growing a business and creating new opportunities.
  8. Business Plan: A document that outlines a business's goals, strategies, and financial projections.

C

  1. Capital: Funds or assets invested in a business to support its operations and growth.
  2. Cash Flow: The movement of money into and out of a business, showing its liquidity and financial health.
  3. Churn Rate: The percentage of customers who stop using a product or service over a given period.
  4. Client Acquisition: The process of gaining new customers or clients for a business.
  5. Cost of Goods Sold (COGS): The direct costs associated with producing goods or services sold by a company.
  6. Crowdfunding: Raising funds from a large number of people, typically through online platforms.
  7. Customer Acquisition Cost (CAC): The cost associated with acquiring a new customer.
  8. Customer Lifetime Value (CLV): The total revenue a business expects from a customer over the entire duration of their relationship.
  9. Competitive Advantage: A condition or circumstance that puts a company in a favorable or superior business position.

D

  1. Debt Financing: Raising capital through borrowing, typically by issuing bonds or taking out loans.
  2. Dilution: The reduction in ownership percentage for existing shareholders when new shares are issued.
  3. Direct Sales: Selling products or services directly to customers without intermediaries.
  4. Due Diligence: The process of thoroughly investigating a business or investment opportunity before making a decision.
  5. Diversification: Expanding a business into new markets or product lines to reduce risk.

E

  1. Equity: Ownership interest in a company, typically represented by shares of stock.
  2. Exit Strategy: A plan for how an entrepreneur or investor will exit a business or investment, such as through a sale or IPO.
  3. Enterprise Resource Planning (ERP): Integrated software systems used to manage and automate core business processes.
  4. Entrepreneurial Ecosystem: The network of individuals, organizations, and resources that support and promote entrepreneurship.
  5. Earnings Before Interest and Taxes (EBIT): A measure of a company's profitability that excludes interest and tax expenses.

F

  1. Financial Statements: Reports that provide information about a company's financial performance and position, including income statements, balance sheets, and cash flow statements.
  2. Franchise: A business model where an entrepreneur licenses the right to use a brand and business system from a franchisor.
  3. Funding Round: A stage in the fundraising process where a company raises capital from investors, such as Seed, Series A, Series B, etc.
  4. Fixed Costs: Costs that remain constant regardless of the level of production or sales.

G

  1. Gross Margin: The difference between revenue and cost of goods sold, expressed as a percentage of revenue.
  2. Gross Profit: The amount of money a company makes from its core business activities, excluding operating expenses, taxes, and interest.
  3. Growth Hacking: Using creative and innovative techniques to achieve rapid business growth.
  4. Go-to-Market Strategy: A plan for how a company will sell its products or services to customers.

H

  1. Hurdle Rate: The minimum acceptable rate of return on an investment or project.
  2. Horizontal Integration: A business strategy where a company acquires or merges with other companies at the same stage of production.
  3. Human Capital: The value of a company's employees, including their skills, knowledge, and experience.

I

  1. Initial Public Offering (IPO): The process of offering shares of a private company to the public for the first time.
  2. Investment Capital: Funds invested in a business to support its growth and operations.
  3. Intellectual Property (IP): Legal rights protecting creations of the mind, such as patents, trademarks, and copyrights.
  4. Incubator: An organization or program that supports early-stage startups by providing resources, mentorship, and funding.
  5. Incentive: A benefit or reward designed to motivate individuals to achieve specific goals.

J

  1. Joint Venture: A business arrangement where two or more parties collaborate to achieve a common goal while sharing risks and rewards.
  2. Just-In-Time (JIT): An inventory management strategy where materials are ordered and received only as needed to reduce holding costs.

K

  1. Key Performance Indicators (KPIs): Metrics used to evaluate the success of an organization in achieving its objectives.
  2. Kickstarter: A popular crowdfunding platform for raising funds to support creative projects and startups.

L

  1. Leverage: Using borrowed capital or resources to increase the potential return on investment.
  2. Liquidity: The ease with which assets can be converted into cash without affecting their value.
  3. Logistics: The management of the flow of goods, services, and information from suppliers to customers.
  4. Loss Leader: A product sold at a loss to attract customers who may make additional purchases.

M

  1. Market Research: The process of gathering and analyzing information about a market, including customer needs and preferences.
  2. Margin: The difference between the cost of producing a product and its selling price.
  3. Merger: The combination of two or more companies into a single entity.
  4. Minimum Viable Product (MVP): The simplest version of a product that can be released to test and validate the market.
  5. Monetization: The process of generating revenue from a product or service.

N

  1. Net Income: The total profit of a company after all expenses, taxes, and interest have been deducted from revenue.
  2. Niche Market: A specific, targeted segment of a larger market with distinct needs or preferences.
  3. Non-Disclosure Agreement (NDA): A legal contract that prevents parties from disclosing confidential information.

O

  1. Operational Efficiency: The ability of a business to deliver products or services in the most cost-effective manner.
  2. Opportunity Cost: The potential benefit lost by choosing one option over another.

P

  1. Profit Margin: The percentage of revenue remaining after all expenses have been deducted.
  2. Product Development: The process of creating and bringing a new product to market.
  3. Pro Forma: Financial statements that project future financial performance based on certain assumptions.
  4. Pivot: A significant change in strategy or business model based on feedback or market conditions.
  5. Public Relations (PR): The practice of managing the spread of information between an organization and the public.

Q

  1. Qualitative Analysis: The assessment of non-numerical data to understand underlying trends and behaviors.
  2. Quantitative Analysis: The assessment of numerical data to identify patterns and make data-driven decisions.

R

  1. Return on Investment (ROI): A measure of the profitability of an investment, calculated as the ratio of net profit to the investment cost.
  2. Revenue: The total income generated from sales of products or services before any expenses are deducted.
  3. Risk Management: The process of identifying, assessing, and mitigating risks to protect a business.
  4. Revenue Stream: The sources of revenue for a business, such as sales, subscriptions, or licensing.

S

  1. Scalability: The ability of a business to grow and handle increased demand without compromising performance.
  2. Stakeholders: Individuals or groups with an interest in a company's performance, such as employees, customers, investors, and suppliers.
  3. SWOT Analysis: A strategic planning tool used to identify strengths, weaknesses, opportunities, and threats.
  4. Sales Funnel: The stages a prospect goes through from awareness to purchase.
  5. Subscription Model: A business model where customers pay a recurring fee for ongoing access to products or services.

T

  1. Target Market: The specific group of consumers a business aims to reach with its products or services.
  2. Trademark: A symbol, word, or phrase legally registered to represent a company or its products.
  3. Turnover: The total revenue generated by a business over a specific period.

U

  1. Unique Selling Proposition (USP): A distinctive feature or benefit that sets a product or service apart from competitors.
  2. Up-Sell: The practice of encouraging customers to purchase a more expensive version of a product or additional features.

V

  1. Value Proposition: A statement that outlines the unique benefits and value a product or service provides to customers.
  2. Venture Capital: Funding provided to startups and small businesses with high growth potential in exchange for equity.

W

  1. Workforce: The group of employees engaged in performing the tasks required by a business.
  2. Withdrawal: The act of taking money out of a business or investment.

X

  1. X-Factor: A unique quality or feature that sets a business or product apart from competitors.
  2. Exit Strategy: A plan for how entrepreneurs or investors will exit an investment or business venture, typically through a sale or public offering.

Y

  1. Yield: The return on an investment, typically expressed as a percentage of the investment amount.

Z

  1. Zero-Based Budgeting: A budgeting method where all expenses must be justified for each new period, starting from a base of zero.

This list covers key terms entrepreneurs use in various aspects of business transactions and operations.