70 Essential Business Terms Every Entrepreneur Should Know

Deep dive into some of the most essential terminologies used in businesses. Get a better understanding of these business terms with Square today!

by Square Nov 21, 2021 — 4 min read

Table of contents

For those new to the game, the terminologies of business can be quite confusing.

Part of the problem is that entrepreneurs need to become familiar with all aspects of their company, of which there are quite a few, meaning the business terms used are many and varied.

There are the acronyms, like KPI, B2B, CPL and SWOT. There’s the financial jargon, like accounts receivable, fixed costs, working capital and equity. Then there’s the tech talk, like CTR, PPC, user experience and bounce rates.

Whether you’re just starting out in the world of business, or simply feel as though you could do with a refresher, let’s take a look at 70 of the most common examples of business terminology, and exactly what each term means.

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The 70 business terms an entrepreneur needs to know

1. A/B testing

A method of testing two versions of something (often an ad, a web page or an app) to determine which performs better.

2. Accounts payable

A record that represents a business’s obligation to pay off a short-term debt to a supplier or creditor.

3. Accounts receivable

A record that represents the money owed to a business by customers and other businesses.

4. Accrual basis

A method of accounting that sees revenue and expenses recorded when a transaction occurs, rather than when the money actually changes hands.

5. Accruals

Expenses and earnings that have been incurred, but for which money hasn’t yet changed hands.

6. Analytics

Using data to inform decision making.

7. Asset

Anything that has value and is owned by a business.

8. B2B

Describes dealings that are ‘business-to-business’.

9. B2C

Describes dealings that are ‘business-to-consumer’.

10. B2G

Describes dealings that are ‘business-to-government’.

11. Balance sheet

A report that summarises a business’s assets and liabilities to offer a snapshot of net worth.

12. Benchmarking

The process of comparing performance against external or internal numbers.

13. BoFu

‘Bottom of funnel’ describes the final, purchasing stages of the sales funnel.

14. Bookkeeping

The process of recording all business transactions.

15. Bounce rate

The percentage of visitors that leave your website soon after arriving.

16. Brand

A name, term or symbol that separates your business, product or service from others.

17. Business loan

A financial loan designed specifically for a business.

18. Buyer persona

A summary of the characteristics of a customer group or segment.

19. Capital

The wealth, either in money or assets, that is available to a business.

20. Cash flow forecasting

A forecast of a business’s future financial position used to inform today’s decision making.

21. Cash flow

The movement of money in and out of a business over a specific period of time.

22. CMS

A ‘content management system’ is software used to create, modify and distribute digital content.

23. Conversion rate

The percentage of users who complete a desired (and often digital) action.

24. Core competency

The defining traits and capabilities that distinguish a business from its competitors.

25. CPL

‘Cost per lead’ measures the marketing cost to acquire a single lead.

26. CRM

‘Customer relationship management’ software helps a business administer interactions with customers.

27. CTR

‘Click through rate’ measures how many people are moving through your ads or website and toward a desired action.

28. Deliverable

A tangible or intangible good, service or asset that is delivered as part of a project.

29. Demographics

Data points used to describe a group of people (age, sex, income, etc.)

30. Depreciation

The reduction in value of an asset over time, often due to wear and tear.

31. Digital marketing

Marketing conducted through the internet.

32. Ecommerce

Buying or selling products over the internet.

33. Equity

The ownership of assets, including related debts and liabilities. Equity is measured by subtracting debts/liabilities from the assets.

34. Evergreen

Content that offers value to the viewer no matter how old it is.

35. Fixed asset

Assets that are difficult or unlikely to be converted into cash (machinery, furniture, real estate, etc.)

36. Fixed costs

Costs that a business must pay regardless of performance (utilities, rent, salaries, etc.)

37. Friction

Anything that deters a customer from doing business with an organisation.

38. Gross profit

Total sales minus direct cost (materials, labour, marketing, delivery, etc.)

39. Gross

Total income before any costs, discounts or returns are deducted.

40. Inbound marketing

Using digital marketing strategies like content marketing, SEO and social media to attract or draw in new business.

41. Incentivise

Using rewards to motivate a customer or team member to complete a desired action.

42. Income statement/profit & loss statement

A report that shows a business’s revenues and expenses over a specific period.

43. Infographic

A piece of visual content that combines text, images and clever design to make complex information easier to understand.

44. Intangible asset

Non-physical assets, such as patents, copyright, software and intellectual property.

45. Inventory management

The process of ordering, organising, storing and utilising inventory.