Glossary of Business Terms
A
Accelerator: A venture that provides a myriad of assistance solutions and financial avenues for emerging enterprises.
Acquisition: The act of one company being bought by another.
AGM (Annual General Meeting): An annual event where company shareholders convene to cast their votes on various corporate matters, such as the composition of the board of directors. It serves as a platform for shareholders to exercise their voting rights and have a say in the governance of the company.
Angel Investor: An individual who allocates personal capital to foster the expansion of an enterprise during its initial phases.
Asset: Any possession owned by a corporation, holding value within its ownership.
Auditors: Professionals in the field of accounting tasked with the responsibility of thoroughly examining a company’s financial records to ensure their accuracy.
B
Balance sheet: A momentary glimpse of a company’s financial stance, categorizing its resources, obligations, and shareholders’ equity.
Basis period: The annual timeframe during which a sole proprietorship or partnership fulfills its tax obligations.
Bootstrapping: Initiating a business venture with minimal financial resources, often depending on personal funds and striving to keep operational expenses at their bare minimum.
Break-even point: The moment at which your fledgling business has settled all its liabilities.
C
Capital: Monetary resources, including the funds kept in bank accounts or other depositary arrangements.
Capital gains tax: A levy on the gains realized from the sale or divestment of a business asset, spanning diverse assets such as real estate and stocks.
Cash flow: The net sum of funds moving in and out of your enterprise.
Corporate taxation: The tax levied on your company’s profits – stands at the current rate of 19 percent.
CTR (Click-Through Rate): The proportion of individuals who engage with your promotional content by clicking on it, relative to the overall number of users who have come across it within the corporate environment.
CPC (Cost-Per-Click): A payment structure utilized in the corporate landscape, where enterprises are billed based on the quantity of times their promotional advertisements were showcased to a potential customer.
CRM (Customer Relationship Management): The method through which enterprises engage and communicate with their clientele to enhance their overall experiences. As an instance, this could involve sending individualized emails offering exclusive service discounts.
CSR (Corporate Social Responsibility): An organizational strategy that places a premium on supporting philanthropic or humanitarian initiatives.
CTA (Call To Action): A corporate term referring to any element in a business campaign or communication that urges the potential client or customer to take a specific action, such as clicking an ‘add to cart’ button on an online store platform.
D
DEI (Diversity, Equity, and Inclusion): A corporate concept encompassing strategies and measures that foster a level playing field and ensure fair treatment for every member of the workforce, irrespective of their background or identity.
Debtor: An individual or organization who is indebted to your company.
Dividend: A discretionary bonus distributed to company stakeholders in case the business declares notably substantial earnings.
Down round: A funding round during which a startup’s valuation is lower compared to its earlier financing stages.
Dropshipping: A sales strategy that revolves around procuring a considerable quantity of goods from a wholesaler and subsequently marketing them to end customers to generate a profit.
E
EBIT (Earnings Before Interest and Tax): A variant of operational earnings.
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation): An alternative representation of operational earnings, this financial metric gauges a company’s comprehensive financial performance.
Elevator Pitch: A concise expression offering a glimpse into your enterprise.
Exit strategy: The deliberate roadmap devised by a business founder to divest their ownership stake by selling it to investors or another company.
F
FSA (Financial Services Authority: It serves as the sole statutory financial overseer in the United Kingdom.
Financial year: A designated timeframe utilized for the purpose of calculating taxes or managing financial records.
Fixed costs: Expenses that a business accrues in manufacturing goods, irrespective of its production volume.
G
GDP (Gross Domestic Product): The aggregate worth of all commodities and services manufactured within a nation’s borders.
GA (Google Analytics): A web analysis solution provided by Google, designed to monitor and present data on the visitors and activities of a website.
Gross profit: The earnings a company generates after subtracting the expenses associated with selling its goods or services.
Growth capital: A Financial support enabling a company to expedite its expansion. In the context of startups, this constitutes the subsequent funding phase following the initial seed investment.
Guerilla marketing: The application of non-traditional, often budget-friendly, promotional strategies.
H
Half year: UK corporations are required to present their profit statistics for a ‘half-year’ (at the midway point of their financial year).
Hostile takeover: An attempt by an individual to gain control of a company without obtaining consent from the board of executives.
I
IFA (Independent Financial Advisor): Experts who provide unaffiliated counsel concerning financial affairs to corporations.
Income tax: A duty rendered on the earnings or gains acquired by a person or enterprise.
Income statement: A yearly summary of a company’s earnings and costs.
Incubator: This operates similarly to an accelerator, but with a primary focus on fostering innovation. Its main goal is to nurture and develop a concept into a feasible and successful business model.
Insolvency: The financial state of a company being incapable of settling its debts. Such a predicament can ultimately result in the company facing business insolvency
J
Joint Ownership: Ownership of a property or other business assets jointly held by more than one entity.
K
Keyword: Commonly used terms or phrases employed by search engines to assess the position of a webpage.
KPI (Key Performance Indicator): A metric utilized to evaluate the performance and gauge the achievements of a company or its endeavors. For instance, a common objective might be to attain a predetermined level of monthly revenue.
L
Lead: A prospective customer who has indicated a curiosity in your product or service.
Lead generation: Lead generation involves attracting potential customers to your establishment and serves as the initial phase in the sales funnel.
Leasehold: A real estate arrangement where the occupant rents the property from the owner for a specified duration and typically subject to specific terms. Discover if this option suits your needs in our comprehensive manual on commercial leasing.
Leveraged buyout: When a firm is acquired through the utilization of borrowed funds.
Limited company: In a private corporation, the accountability of shareholders or members is confined to the extent of their investments or guarantees made to the corporation.
Liquid asset: A resource possessing high liquidity, readily exchangeable for cash, such as a financial deposit in a banking institution.
Liquidity: The level of ease with which a company’s assets can be readily transformed into cash.
M
Margin: The variance existing between the expenses incurred and the final selling price of a particular product or service.
Market analysis: The examination of rival companies to recognize and measure potential business prospects.
Markup: The variance between the expense incurred in producing or providing a product or service and the amount for which it is ultimately sold.
Merger: The fusion of two or more corporations of comparable magnitude.
Mission statement: Alternatively referred to as a foresight statement, this represents an ambitious proclamation presented by a fledgling enterprise, outlining its aims and purposes.
MVP (Minimal Viable Product): A product that contains sufficient functionalities to cater to initial customers or to validate a business concept.
MPC (Monetary Policy Committee): A panel within the Bank of England responsible for determining the UK’s official interest rate.
N
Negative equity: Occurs when the worth of an investment depreciates below its initial purchase cost.
Net: The surplus of profit that remains after various deductions, including taxes, have been accounted for.
Nominal values: Any value unaffected by inflation, like a nominal interest rate.
Note: A legal instrument serving as proof of a financial obligation.
O
OPEX (Operating Expenditure): Pertains to the funds an organization allocates for its continuous and routine activities. This encompasses various costs such as staff remunerations, lease payments, and utility charges.
Outsourcing: The practice of delegating tasks and projects to external service providers or vendors.
Overheads: Business expenses that are not directly linked to the production cost of a product or service, like lease payments.
P
Patent: A formal legal certificate affirming an individual or enterprise’s exclusive entitlement to produce, employ, or distribute a specific innovation.
Partnership: A formal arrangement entered into by two or more entities, where they come together to collaboratively oversee and operate a business venture.
PAYE (Pay As You Earn): A taxation approach employed by the government, whereby taxes are deducted directly from the wages of your workforce on a weekly or monthly basis.
Payment gateway: An arrangement that processes and transfers payment details from a client to the financial institution of a vendor.
Pitch deck: An encompassing showcase of your company and its revenue strategy, tailored to attract investments.
POS (Point-of-Sale): The location where a purchase is finalized, typically involving a payment terminal or cash register.
Private equity: Capital and investors that directly inject funds into emerging startups and private enterprises.
Profit and loss statement: A document summarizing the overall revenue generated and total expenses incurred. The variance between these values represents your profit.
Project management: The implementation of procedures, approaches, competencies, expertise, and tools to accomplish particular goals throughout a project.
Q
Quota: A state-imposed restriction on the quantity of a commodity allowed for import and export.
R
Rate of return: Financial proportion of the earnings derived from an investment in comparison to the initial investment outlay, employed to assess the financial efficacy.
RPC (Revenue Per Click): A metric that measures the worth of a user engaging with a company’s digital promotional content, evaluated based on the potential earnings it can generate.
RPI (Retail Price Index): A metric for gauging inflation, which monitors the cost of a typical assortment of commodities.
RPV (Revenue Per Visitor): The monetary worth of a prospect engaging with a company’s digital sales platforms, evaluated based on the possible earnings generated.
Revenue: The overall sum of money earned through the exchange of products and services.
Reverse takeover: When a diminutive firm acquires a more substantial counterpart.
ROI (Return on Investment): The financial gains derived from a business undertaking, determined by measuring the income generated in relation to the operational expenses.
S
Sales channel: A technique employed to disperse merchandise to the market, like an online platform.
Sales forecast: Prediction of forthcoming sales based on historical sales data.
SEO (Search Engine Optimisation): The art of boosting website traffic through enhanced search engine rankings.
Seed money: A modest sum of money utilized to kickstart a business concept.
Setup costs: All the costs accrued while establishing a business entity.
SME (small or medium sized enterprise): A small or medium-sized business, encompasses companies that employ less than 250 individuals.
Sole proprietorship: A lawful business arrangement wherein the business is owned solely by a single individual.
Supply chain: Series of actions encompassed in the manufacturing and dissemination of commodities.
T
Takeover: When a company seeks to purchase another firm by presenting a more substantial sum than its current market worth.
Tariff: A levy imposed by the government on the importation or exportation of goods.
Tax return: Obligatory document filled out annually, summarizing earnings and expenditures for the fiscal year.
Tender: An offer to undertake a work agreement, usually presented in rivalry with other vendors.
Trademark: A form of branding that has received legal registration and is thereby protected from unauthorized replication by a competing company.
Turnover: The overall income generated by a business or corporation within a defined timeframe.
U
Unbundling: The idea of splitting a corporation into distinct component entities, frequently with the intention of disposing of all or a portion of them following an acquisition.
Unearned income: Revenue acquired from avenues distinct from regular employment, like a charitable contribution.
Unicorn: A burgeoning company (typically in the tech industry) that has achieved a valuation surpassing $1 billion.
USP (Unique Selling Point): Alternatively referred to as a value proposition, represents the special allure of the enterprise to its clientele and stakeholders.
V
Valuation: Computed value of a startup’s worth.
VAT (Value-added Tax): A levy imposed on the majority of products and services in the United Kingdom, presently at a rate of 20 percent.
VC (Venture Capital): Financial investments directed towards high-risk ventures, frequently in the form of startups or early-stage businesses.
Vertical merger: When a corporation purchases a company operating within the same industry but at distinct points of the business life cycle. For instance, consider a scenario where an automobile manufacturer acquires a tire production company.
W
Wireframe: A simple, 2D graphical depiction of a website page, application interface, or design arrangement for a product.
Wholesale price: The price applied to businesses purchasing substantial amounts of a product for resale in reduced quantities.
Working capital: The funds that a company utilizes for its daily operations. The level of operating funds at your disposal reflects your general financial flexibility beyond possessions and obligations.
Y
Year-end: The culmination of a tax year. In the United Kingdom, this particular date invariably occurs on 5th April.
Yield: The gain achieved from an investment.
