Small Business Glossary
Entrepreneur and Small Business Terms: Fred's News
Startup Glossary
Common Terms for Entrepreneurs
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X-Y-Z
A
Advertising - Marketing format. The one-way process of announcing and informing the public about a product through traditional channels, such as printer, television, radio or internet ads.
Affiliate Marketing - Common for web-based businesses, affiliate marketing allows a website to link to an online business and receive credit for any products that visitor may purchase.
Angel Investor - An investor who provides early-stage venture capital, usually smaller amounts than full-fledged venture capital.
B
Bank Loan - Money borrowed from a bank or other lending institution.
Board of Advisors - A group of advising professionals, who may or may not be official, who may be called upon by a business manager or entrepreneur.
Board of Directors - An official group of advising professionals who choose the managers of a corporation.
Bond - Method of raising capital, a note of credit offered by a business to private investors on the promise of repayment plus some amount of interest. Common among public companies.
Bootstrap - When a business cannot find the resources it needs for optimal growth, the business owners build the business in a bare-bones fashion with what resources they have. This is common for home-based busiensses.
Burn Rate - The cost to keep a business in operation, whether or not it produces and sells a product.
Business License - A form that registers a business owner with the local or state government. Usually completed through a county or state office. In some states the legality of having a business or being an independent contractor without one is questionable.
Business Plan - A written statement of an entrepreneur's intent to start a business. This plan includes a description of the business, marketing plan, operations plan, and financial statements. Plans can be one page long or more than 30 pages. During the "dot-com" boom in the 1990s, some business plans were literally scrawled on a piece of paper.
Business Plan Competition - A competition, usually for college or graduate students, wherein teams or individuals compete by giving a mock venture capital pitch, elevator pitch, and other factors. These competitions generally give grand prizes worth several thousand dollars.
Buy Now - Commonly used icon in web retail, ecouraging a person looking at a product to purchase.
C
C-Corp - A business organization that is owned by shareholders. C-Corps pay taxes directly to the government, then distribute dividends to shareholders.
Capital - Monetary resources or resources that must be purchased that will assist an entrepreneur in building their business.
Contract Manufacturer - A business that specializes in producing products for other businesses, frequently for businesses that cannot afford production equipment and have small production runs.
Corporation - A business owned by individuals who purchase shares of the business, organized as a C-Corp or an S-Corp.
Cost of Goods (or Services) - The actual, direct cost of providing goods and services to customers, without accounting for indirect costs such as electricity or unrelated labor.
D
Demonstrator - See Prototype.
Drop Ship - When a business sells a product not in its physical inventory and ships it directly to the customer.
E
EBIT - Earnings Before Interest and Taxes, a measure of how successful a business is after paying cost of goods and overhead, but without accounting for the cost of government and interest expenses. This is common when looking at an isolated part of the business, or when evaluating a business for overall health.
Earnings - The amount of revenues remaining after paying for the cost of selling products or services.
Elevator Pitch - A thirty-second to one-minute business pitch. This type of pitch became common in the 1990s when entrepreneurs would find that they had a short, unexpected introduction to a Venture Capitalist. The name comes from the frequency with which this occurred while in an elevator on the way to a business meeting.
Entrepreneur - A person who organizes, starts-up and manages any enterprise, esp. a business, usually with considerable initiative and risk.
Entrepreneurship - The process of developing, organizing, starting, building and managing an enterprise by an entrepreneur.
Executive Summary - A brief statement describing the business, its objectives and strengths, usually about a page long.
F
Feasibility - Whether or not a business idea can realistically become a profitable business with the resources the entrepreneur reasonably believes they can obtain.
Financial Statements - A set of charts detailing revenues and cost, assets, liabilities, and cash flow. Usually organized into Profit and Loss or P&L, Balance Sheet, and Statement of Cash Flows. In business, Financial Statements are almost always looking at the past. In entrepreneurship, they are often projections of the future.
Franchise - A business wherein the entrepreneur pays for the plan and systems of an existing business and uses them to create their own business.
Fulfillment Company - Business that receives, warehouses and ships the products of another business, with varying levels of service. Different from a drop-shipper because the fulfillment business does not own the product.
G
Google - Search engine where users can find resources, information and businesses from an index of websites and web pages on the internet, located at google.com.
Growth - The hope of nearly every entrepreneur, the process of increasing sales volume and profit margins to make the business larger and more productive.
H
Help - Something almost every entrepreneur needs.
How to - A resource that shows, step-by-step, the method to perform a process.
I
Integrated Marketing Communications - The coordinated use of various media to engage in a marketing campaign.
Investment - A term describing a particular amount or time when an investor bought shares or otherwise provided capital to a business.
Investor - A person who has put money or other capital into a business enterprise.
J
Just In Time (JIT) - Operations management term describing having a resource, part or product at the right moment, just when it is needed and not before, commonly practiced in manufacturing.
K
Kauffman Foundation - Founded by Ewing Kauffman, this is a private, non-profit foundation heavily involved in research and education for entrepreneurs and small businesses.
L
Limited Liability - A business that is owned as a sole proprietorship or partnership, but which has limited protections against the personal property of the owners.
Line of Credit - A method of borrowing from a bank, this offers a set amount of money which a business may borrow against for the short-term. Used to supplement cash reserves.
M
Market Segment - The group of individuals that a marketer wishes to reach, defined by specific characteristics such as demographics, social behaviors, ideology or other factors.
Marketing - The process of finding, communicating with and selling to a customer.
Marketing Campaign - A connected series of activities intended to inform customers and make them aware of a business or product, inviting them to purchase.
Marketing Plan - Similar to and usually part of a business plan, a statement of the methods, goals and objectives of the marketing operations of a business.
Moot Corp - The pre-eminent business plan competition for graduate business schools, hosted by the University of Texas.
N
Networking - The process of developing beneficial relationships with people who can help develop the resources needed for your business and maintaining those relationships over time.
O
One-Pager - A type of business plan, condensed to a single page with the most important points. Used as a quick reference for an Angel or Venture Capitalist.
Overhead - The costs of doing business that are not directly related to producing a product or service. Costs such as utilities, administrative labor and rent are usually considered overhead.
P
Partnership - A business that is not a corporation that is owned by more than one person.
Personal Loan - Capital borrowed from an individual person.
Pitch - The presentation given when an entrepreneur is seeking investment from an Angel or Venture Capitalist.
Product - A tangible good that can be purchased, such as a car or a box of cereal.
Prototype - An example product to display to potential buyers or investors, which product is still in the development stages.
Q
Quality - The consistency with which a product or service is delivered to meet or exceed customer expectations.
R
Resource - Any raw material, personal connection, labor or capital that can be employed to build a business.
Revenue - The total of monies collected by a business.
Risk - The amount of uncertainty in building a business. Entrepreneurs try to minimize risks.
S
S-Corp - A business organization that is owned by shareholders. S-Corps generally do not pay taxes, their taxes are paid by their shareholders at their regular income rate.
Search Engine Marketing - Using a search engine to promote a website, product or service; or the use of search engine products to increase visibility and usability of a website.
Search Engine Optimization - The process of improving a website's position in a web search on a search engine, using techniques and methods to improve the website's relevance score to related search keywords.
Serial Entrepreneur - A person who has made a career of starting new businesses.
Service - A business in which intangible goods, such as tax preparation or car washes, are sold.
Self-Funded - A business that is funded solely by its founder(s).
Short Plan - A business plan that is between five and ten pages long, commonly used as entry into a business plan competition or for quick review by a venture capitalist.
Small Business Administration - A government agency whose purpose is to promote and help small business with education and other resources.
Sole Proprietorship - A business own by a single person that is not organized as a C-Corp or S-Corp
T
Target Customer - The particular customer or customer group targeted in a marketing plan.
Target Market - The market segment targeted in a business plan, made up of similar target customers.
U
V
value Proposition - The method or reason that a product becomes more valuable to a customer than competing products.
Venture Capital - Money invested into a business in exchange for equity, so that the business can grow.
Vision - A statement of what an entrepreneur wants his or her business to be in three to five years and beyond.
W
Website - A page or collection of pages on the internet where a company describes itself, provides contact information, markets itself and may in fact sell its products.
XYZ
Yahoo! - A website portal that offers business services, finance information and website development products, as well as search engine services.
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