Basic Business Terms

Let’s talk business! One of the first steps in starting a business is learning some key basic business terms. Here we have listed the top 20 definitions that every budding business owner should know.

Angel Investor:

is someone who helps a start up by providing seed money for their business. This usually comes with the exchange of a portion of ownership in the business.


is the owned property of a business. This valuable property can be tangible such as in goods, or intangible such as business owned ideas or concepts.

Balance Sheet:

is a statement of assets, liabilities, and capital in a business at a given period of time.


is the culture of your business. It includes the business name, colors, logos and general aesthetic. It’s what people use to tell your business apart from everyone else’s.


is a financial plan for a given period of time. It is a general outline of what a business plans for revenue and expenses.

Cash Flow:

is the movement of money into a business.


stands for Chief Executive Officer and is the main go-to person in charge of all activities in a business.


is the borrowing of money with the understanding that you will pay it back later.


is the raising of capital in small increments from a variety of people called investors.


is an amount of money that your business owes.


is the calculated percentage agreed to pay when repaying a debt or loan.


is to put money into something with the expectation of a benefit in the future.


is the sacrifice that a business must make in order to fulfill its obligations to past transactions.

Financial Statements:

are akin to profit and loss statements and include the revenue and expense of a business.


is essentially known as income, or the amount of money a business makes.


are the costs or payouts that a business has.

Profit margin:

is the profitability of a business when you consider revenue and expenses.

Return on investment (ROI):

is a ratio between net profit and loss that can determine efficiency of your business. It is essentially a measure of showing the benefit to your business when you consider the cost of the initial investment.


is the income your business has not spent.


are a charge you must pay to a government entity for a particular type of expenditure. An example would be food or meals tax, which is a percentage charged when buying prepared foods. This is a charge in addition to the cost of the meal.


And one you should absolutely know is ENTREPRENEUR. An entrepreneur is someone who starts their own business simultaneously enduring the sacrifices while reaping the rewards.

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