Business Dictionary

Core business and corporate terminology.

ROI

Return on Investment; a performance measure used to evaluate the efficiency of an investment.

B2B

Business-to-Business; commerce between two businesses rather than between a business and a consumer.

B2C

Business-to-Consumer; the process of selling products and services directly to consumers.

KPI

Key Performance Indicator; a measurable value that demonstrates how effectively a company is achieving key business objectives.

SaaS

Software as a Service; a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.

SEO

Search Engine Optimization; the process of improving the quality and quantity of website traffic to a website or a web page from search engines.

CRM

Customer Relationship Management; an approach to manage a company's interaction with current and potential customers.

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization; a measure of a company's overall financial performance.

IPO

Initial Public Offering; the process of offering shares of a private corporation to the public in a new stock issuance.

MVP

Minimum Viable Product; a version of a product with just enough features to satisfy early customers and provide feedback for future product development.

ARR

Annual Recurring Revenue; a metric used by subscription-based businesses to measure the predictable and recurring revenue components of their revenue stream.

MRR

Monthly Recurring Revenue; the predictable total revenue generated by a business from all the active subscriptions in a particular month.

CAC

Customer Acquisition Cost; the cost of winning a customer to purchase a product or service.

LTV

Lifetime Value; a prediction of the net profit attributed to the entire future relationship with a customer.

Churn Rate

The annual percentage rate at which customers stop subscribing to a service or employees leave a job.

Burn Rate

The rate at which a new company is spending its venture capital to finance overhead before generating positive cash flow from operations.

Runway

The amount of time a company has before it runs out of money.

Lead

A person or company who has shown interest in the product or service.

Conversion Rate

The percentage of users who take a desired action.

Funnel

A consumer-focused marketing model that illustrates the theoretical customer journey toward the purchase of a good or service.

Pivot

A shift in business strategy to test a new approach.

Bootstrapping

Building a company from the ground up with nothing but personal savings and, with luck, the cash coming in from the first sales.

Angel Investor

An affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

Venture Capital

Private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Due Diligence

An investigation, audit, or review performed to confirm facts or details of a matter under consideration.

Equity

The value of the shares issued by a company.

Liability

Something a person or company owes, usually a sum of money.

Asset

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business.

P&L

Profit and Loss statement; a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period.

Margin

The difference between the seller's cost for acquiring products and the selling price.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Overhead

Ongoing business expenses not directly attributed to creating a product or service.

Scalability

The capability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged to accommodate that growth.

Outsourcing

A business practice in which a company hires a third party to perform tasks, handle operations or provide services for the company.

Freelancer

A person who is self-employed and not necessarily committed to a particular employer long-term.

Stakeholder

A party that has an interest in a company and can either affect or be affected by the business.

Board of Directors

A group of individuals elected to represent shareholders.

CEO

Chief Executive Officer; the highest-ranking executive in a company.

CFO

Chief Financial Officer; the senior executive responsible for managing the financial actions of a company.

COO

Chief Operating Officer; a senior executive tasked with overseeing the day-to-day administrative and operational functions of a business.

CTO

Chief Technology Officer; an executive-level position focused on the scientific and technological issues within an organization.

CMO

Chief Marketing Officer; a corporate executive responsible for reporting on marketing activities.

White Paper

A persuasive, authoritative, in-depth report on a specific topic that presents a problem and provides a solution.

Case Study

A process or record of research in which detailed consideration is given to the development of a particular person, group, or situation over a period of time.

Brand Awareness

The extent to which consumers are familiar with the distinct qualities or image of a particular brand of goods or services.

Value Proposition

A statement that answers the 'why' someone should do business with you.

Market Share

The portion of a market controlled by a particular company or product.

Target Market

A particular group of consumers at which a product or service is aimed.

Demographics

Statistical data relating to the population and particular groups within it.

Niche Market

A small, specialized market for a particular product or service.

Cold Calling

The solicitation of business from potential customers who have had no prior contact with the salesperson conducting the call.

Inbound Marketing

A business methodology that attracts customers by creating valuable content and experiences tailored to them.

Outbound Marketing

A traditional method of marketing seeking to push messaging out to potential customers.

Upselling

A sales technique where a seller induces the customer to purchase more expensive items, upgrades or other add-ons.

Cross-selling

The action or practice of selling an additional product or service to an existing customer.

Supply Chain

The sequence of processes involved in the production and distribution of a commodity.

Logistics

The detailed coordination of a complex operation involving many people, facilities, or supplies.

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.

Procurement

The action of obtaining or procuring something.

Compliance

The action or fact of complying with a wish or command.

Regulation

A rule or directive made and maintained by an authority.

Intellectual Property

A work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights.

Trademark

A symbol, word, or words legally registered or established by use as representing a company or product.

Copyright

The exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material.

Patent

A government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention.

Non-Disclosure Agreements; a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties.