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Business Words Made Simple

Business has a lot of words. Here's what they mean in everyday language, with real examples. Jump to a letter, search, or pick a topic.

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These are general explanations, not legal, tax, or financial advice. Rules can differ by city, county, state, and type of business.

113 of 113 words shown

A

Accounting Money
Using your records to understand how the business is doing and to prepare reports and taxes. Bookkeeping is the record-keeping; accounting makes sense of it.
Example: An accountant uses your year of records to figure out profit and what you owe in taxes.
Learn more: Bookkeeping
Acquisition Legal & paperwork
When one business buys another business, or buys some of its assets, like its equipment, inventory, or customer list. The bought business may keep running under the buyer or be folded into it.
Example: A cleaning company buys a smaller cleaning service — the vans, the supplies, and the list of regular clients — so it can serve more neighborhoods.
Learn more: Business Structure & LLC
AI (artificial intelligence) AI
Computer tools that can write, answer questions, or make images when you type a request.
Example: Asking ChatGPT to help write a short description of your cleaning service.
Learn more: AI in Everyday Words
AI agent AI
An AI tool that can take several steps on its own, like searching, organizing, or filling in a form, usually with your permission. A chatbot mostly just answers.
Example: Asking an agent to find five local craft fairs and list the dates for you to check.
Learn more: AI Agents in Plain Words
AI model AI
The "brain" behind an AI tool — a system trained on huge amounts of text to predict good replies.
Example: Different apps use different models, so the same question can get different answers.
Learn more: AI in Everyday Words
Analytics Online & technology
Numbers that show what's happening on your site or social pages, like visits, clicks, and sales.
Example: Seeing that most shop visitors came from Instagram last week.
Learn more: Content
Audience Customers & marketing
The people who see or hear your messages — followers, email readers, people walking by your booth. Not all of them buy yet.
Example: Your 400 Instagram followers are your audience; the 30 who've booked are customers.
Learn more: Target Audience
Automation Online & technology
Setting up a tool to do a repeat task for you automatically.
Example: An automatic text reminder the day before every appointment.
Learn more: AI for Planning & Operations

B

Bookkeeping Money
Writing down and keeping track of the money your business takes in and pays out.
Example: Logging each sale and each shipping cost in a notebook or spreadsheet every week.
Learn more: Bookkeeping
Brand Customers & marketing
How people recognize and remember your business — your name, look, words, and the feeling customers get.
Example: People know your food truck by its yellow sign and friendly service.
Learn more: Branding
Branding Customers & marketing
The work of shaping your brand: choosing your name, logo, colors, fonts, and how you talk to customers, then using them the same way everywhere.
Example: Using the same colors and tone on flyers, your booth sign, and posts.
Learn more: Branding
Break-even point Money
The point where your sales have covered all your costs — no loss, no profit yet.
Example: If your pressure washer cost $300 and you clear $50 per job, you break even after 6 jobs.
Learn more: Pricing
Budget Money
A plan for how much money you expect to bring in and spend.
Example: Deciding you'll spend no more than $60 this month on hair supplies.
Learn more: Startup Budget
Business description Starting & planning
A few sentences that explain what your business sells, who it's for, and what makes it useful.
Example: "Second Look Dolls finds, cleans, and resells vintage dolls from the 1960s–1990s for collectors and people who want a piece of their childhood back. Every doll is checked, photographed honestly, and packed with care."
Learn more: Business Plan & Audience
Business entity Legal & paperwork
A business that exists as its own legal thing, apart from its owners — like an LLC or a corporation — because it was created by filing with a state. A sole proprietorship is not a separate entity; the owner and the business are legally the same.
Example: "Bright Home Cleaning LLC" signs its own contracts and opens its own bank account, separate from the owner's personal ones.
Learn more: Business Structure & LLC
Business license Legal & paperwork
Permission from a government office to run a business or a certain kind of business. Rules depend on what you do and your city, county, and state.
Example: Some cities require a general business license; hair and food work often have their own rules.
Learn more: Licenses & Permits
Business model Starting & planning
The basic way your business makes money: what you sell, to whom, and how you get paid.
Example: A braider charges per style. A meal-prep business sells weekly plates. A reseller buys low at thrift stores and sells online.
Learn more: Business Plan & Audience
Business name Starting & planning
The name customers know you by. Before using it, check that another business isn't already using it in your state or as a trademark.
Example: "Fresh Cut Lawn Care" — searched on the Ohio Secretary of State site and the USPTO trademark search first.
Learn more: Brainstorming Your Idea & Business Name
Business plan Starting & planning
A written plan for your business: what you sell, who buys it, what it costs, and how you'll find customers. It can be one page.
Example: A one-page plan for a house-cleaning business listing services, prices, supply costs, and where you'll advertise.
Learn more: Business Plan & Audience
Business structure Legal & paperwork
The legal form your business takes, like sole proprietor, partnership, LLC, or corporation. It affects paperwork, taxes, and personal responsibility. A qualified professional can help you choose.
Learn more: Business Structure & LLC
Business summary Starting & planning
A short overview of your whole business on one page or less: what you sell, who buys it, how you reach them, and what you need next. Sometimes called an executive summary.
Example: The first paragraph of your business plan, or what you'd hand to a lender or class instructor.
Learn more: Business Plan & Audience

C

Call to action Customers & marketing
The clear next step you ask someone to take.
Example: "Text 937-555-0100 to book," or "Tap the link to shop."
Learn more: Content
Cash flow Money
The timing of money coming in and going out. You can make sales and still run short if bills come due before customers pay.
Example: Buying food supplies on the 1st but not getting paid by the event host until the 20th.
Learn more: Cash Flow
Chatbot AI
A computer program you type (or talk) to, and it types a reply back.
Example: Asking ChatGPT, "What should I put on a flyer for my lawn care business?"
Learn more: AI in Everyday Words
Competitor Starting & planning
Another business selling something similar to the same customers.
Example: Other braiders in your area, or other online sellers listing the same doll.
Learn more: Business Plan & Audience
Content Customers & marketing
Anything you post or share: photos, videos, tips, stories, or articles.
Example: A quick post: "3 ways to keep your braids fresh longer."
Learn more: Content
Contract Legal & paperwork
A written agreement that spells out who does what, for how much, and by when. For important or large deals, have a qualified professional review it.
Example: A simple signed agreement for a monthly office cleaning: days, price, and how to cancel.
Learn more: Business Systems, Operations & Professionalism
Conversion Customers & marketing
When someone takes the step you hoped for, like buying, booking, or signing up.
Example: Out of 50 people who looked at your listing, 5 bought — that's 5 conversions.
Learn more: Content
Corporation Legal & paperwork
A business that exists as its own legal company, separate from the people who own shares in it. It has the most formal rules — incorporation documents, directors, and regular recordkeeping — and it's taxed in its own ways depending on the type.
Example: A growing company with several owners issues shares and keeps corporate minutes, with help from an attorney and an accountant.
Learn more: Business Structure & LLC
Cost of goods sold (COGS) Money
What it cost you to get or make the items you actually sold.
Example: You sold 10 dolls you bought for $5 each and spent $1 each cleaning them: COGS is $60.
Learn more: Pricing
Customer Customers & marketing
Anyone who buys from you.
Example: The neighbor who pays you $40 to clean out her garage.
Customer experience Running the business
The whole feeling a customer has from first finding you to after they've bought.
Example: Easy booking, on-time arrival, a clean job, and a thank-you text all add up.
Learn more: Business Systems, Operations & Professionalism
Customer service Running the business
How you help customers before, during, and after they buy — answering questions, fixing problems, and being respectful.
Example: Replying within a day and offering a fix when a braid loosens early.
Learn more: Business Systems, Operations & Professionalism

D

DBA (doing business as) / trade name Legal & paperwork
A registered name you do business under that's different from your own legal name or your company's legal name.
Example: Jane Smith registers "Jane's Kitchen" so customers can pay that name.
Learn more: EIN & Registrations
Deposit Money
Part of the payment collected up front to hold a date or cover materials.
Example: A $25 deposit to book a braiding appointment, taken off the final price.
Learn more: Cash Flow
Domain Online & technology
Your website's address that people type in to find you.
Example: yourcleaningbusiness.com
Learn more: Store Setup
Dropshipping Products & selling
Selling products online that another company stores and ships for you. You never hold the items, but you have less control over quality and shipping time, and you're still responsible to your customer.
Example: Listing phone cases; when one sells, the supplier mails it straight to the buyer.
Learn more: Exploring an Idea

E

Ecommerce Online & technology
Buying and selling things online.
Example: Selling thrifted clothing through an online store or marketplace.
Learn more: Store Setup
EIN (Employer Identification Number) Legal & paperwork
A free ID number from the IRS for your business, a bit like a Social Security number for a business. Applying on IRS.gov is free — don't pay a middleman.
Example: Your bank may ask for an EIN when you open a business account.
Learn more: EIN & Registrations
Elevator pitch Starting & planning
A quick, friendly way to explain your business in about 30 seconds — the time of a short elevator ride.
Example: "I do knotless braids and kids' styles from my home studio. Most styles take under four hours, and I book on weekends."
Learn more: Business Plan & Audience
Email list Customers & marketing
Email addresses of people who gave you permission to contact them.
Example: A sign-up sheet at your craft booth that says "Get new-item alerts."
Learn more: Email
Engagement Customers & marketing
How much people interact with what you post — likes, comments, shares, saves, and messages.
Example: A post that gets 25 comments asking "how much?" has strong engagement.
Learn more: Content
Estimate (quote) Money
A price you give before doing the work, so the customer knows what to expect.
Example: "Garage cleanout: about $150–$200, depending on how much needs hauling."
Learn more: Pricing
Expenses Money
The money you spend to run your business.
Example: Cleaning supplies, gas to get to clients, and the phone you use for bookings.
Learn more: Bookkeeping

F

Fixed costs Money
Costs that stay about the same each month, no matter how much you sell.
Example: A $50 monthly booth fee or your website plan.
Learn more: Startup Budget
Follow-up prompt AI
A second message that asks AI to fix, shorten, or change its last answer.
Example: "Make that shorter and friendlier, and add my phone number at the end."
Learn more: How to Write Better Prompts
Fulfillment Products & selling
Everything that happens after an order: picking the item, packing it, and getting it to the customer.
Example: Wrapping a doll in tissue, boxing it, and dropping it at the post office.
Learn more: Shipping

G

Gross profit Money
Sales minus the cost of the items you sold — before other bills like rent, ads, or phone.
Example: $600 in doll sales − $150 cost of the dolls = $450 gross profit.
Learn more: Pricing

H

Hallucination (AI) AI
When AI gives an answer that sounds sure of itself but is made up or wrong.
Example: AI lists a permit office address that doesn't exist. Always check facts on official sites.
Learn more: Safety & Responsible Use
HEX code Customers & marketing
A six-character code (starting with #) that names an exact color, so it looks the same everywhere.
Example: #1D4ED8 for your blue, typed into Canva so every flyer matches.
Learn more: Branding
Hosting Online & technology
The service that keeps your website stored and running on the internet. It's separate from your domain.
Example: Your store platform usually includes hosting in its monthly fee.
Learn more: Store Setup

I

Insurance Legal & paperwork
A plan you pay for that helps cover costs if something goes wrong, like an injury, damage, or a lawsuit. Ask a licensed agent what fits your business.
Example: Liability insurance for a cleaning business in case something breaks in a client's home.
Learn more: Launch Checklist
Inventory Products & selling
The products you have ready to sell.
Example: The 12 vintage dolls cleaned, photographed, and waiting in your closet.
Learn more: Products
Invoice Money
A bill you send a customer that shows what they owe and when to pay.
Example: Sending a client an invoice for $120 for two deep cleans, due in 7 days.
Learn more: Bookkeeping

K

KPI (key performance indicator) Online & technology
One important number you choose to watch to see if things are going well.
Example: "Number of repeat bookings each month" for a braider.
Learn more: Customer Retention

L

Lead Customers & marketing
A person who has shown interest and might become a customer.
Example: Someone who messages, "Do you do move-out cleanings?"
Learn more: Customer Retention
Liability Legal & paperwork
Legal responsibility — usually for money owed or for harm caused. If a business is liable for a debt or a claim, the business (and sometimes the owner, depending on the structure) can be made to pay.
Example: If a cleaning worker accidentally damages a client's floor, the business may be liable for repairing it — which is one reason owners look into insurance and, later, an LLC.
Learn more: Business Structure & LLC
Listing Products & selling
The page or post for one item you're selling online, with photos, price, and details.
Example: Your eBay or Etsy page for one vintage doll.
Learn more: Products
LLC (limited liability company) Legal & paperwork
A type of business registered with your state that can help keep business debts separate from your personal belongings. It has fees and paperwork and isn't required for every business. An LLC is a legal structure, not automatically its own tax type — unless the owners choose otherwise, it's usually taxed like a sole proprietorship or a partnership.
Example: Filing with the Ohio Secretary of State to form "Bright Home Cleaning LLC."
Learn more: Business Structure & LLC

M

Market research Starting & planning
Finding out whether people want what you plan to sell, what they pay now, and who else sells it.
Example: Looking up sold prices for vintage dolls online and asking ten parents what they'd pay for after-school tutoring.
Learn more: Feasibility & Your First Customer
Marketing Customers & marketing
Everything you do to help the right people find out about your business and want to buy.
Example: Posting before-and-after photos and handing out cards at the beauty supply store.
Learn more: Target Audience
Markup Money
How much you add on top of what something cost you to get your selling price.
Example: A dress cost you $8; you add $16 markup and sell it for $24.
Learn more: Pricing
Merger Legal & paperwork
When two businesses combine into one, usually by agreement, instead of one simply buying the other. The businesses join their people, assets, and operations.
Example: Two small cleaning companies join together so one handles homes and the other handles offices under a single company.
Learn more: Business Structure & LLC
Mission statement Starting & planning
One or two sentences saying what your business does, who it serves, and how. It describes your everyday work.
Example: "We clean homes for busy west-side families on a reliable weekly schedule, using a clear checklist every visit."
Learn more: Business Plan & Audience — Purpose, mission, and vision

N

Net profit Money
What's truly left after ALL business expenses are paid. Often called the "bottom line."
Example: $450 gross profit − $120 fees, shipping supplies, and gas = $330 net profit.
Learn more: Pricing
Newsletter Customers & marketing
A regular email or message you send to your list with news, tips, or offers.
Example: A monthly email showing new dolls in stock.
Learn more: Email
Niche Customers & marketing
A small, specific group of customers or type of product you focus on.
Example: Not just "toys," but vintage 1980s fashion dolls for collectors.
Learn more: Your Skills, Passions & Community Needs

O

Online store Products & selling
A website or shop page where customers can browse and buy from you.
Example: A Shopify store or an Etsy shop for your crafts.
Learn more: Store Setup

P

Partnership Legal & paperwork
Two or more people who own a business together. In a general partnership — the simplest kind — the partners share profits and each can be responsible for business debts, including what another partner does. Other forms, like limited partnerships and limited liability partnerships (LLPs), set different rules and usually require state filings. A written agreement helps any kind.
Example: Two cousins splitting a food stand and its costs.
Learn more: Business Structure & LLC
Payment processor Products & selling
A company that lets you accept card or app payments and sends the money to your account, usually for a fee.
Example: Square, PayPal, or Stripe taking a small fee from each sale.
Learn more: Payments
Permit Legal & paperwork
Permission for a specific activity or place, such as selling food at an event or putting up a sign. Requirements vary by location.
Example: A temporary food permit from the local health department for a festival booth.
Learn more: Licenses & Permits
POS (point of sale) Products & selling
The tool you use to ring up a sale in person — often an app and card reader on your phone.
Example: Tapping a customer's card on a reader at your market table.
Learn more: Payments
Pricing Money
Deciding what to charge so it covers your costs and time, leaves profit, and makes sense to customers.
Example: Charging $85 for knotless braids after adding up hair, time, and travel.
Learn more: Pricing
Product description Products & selling
The words in a listing that explain what the item is, its size, condition, and why someone would want it.
Example: "1985 fashion doll, original dress, light wear on shoes, 11.5 inches tall."
Learn more: Products
Products Products & selling
Physical or digital things you sell.
Example: Candles, thrifted jackets, printable planners.
Profit Money
What you have left after paying business expenses.
Example: You made $300 selling plates of food and spent $180 on ingredients and containers. Your profit is $120.
Learn more: Pricing
Profit margin Money
The share of each sale you keep as profit, usually shown as a percent.
Example: You sell a doll for $40 and it cost you $10 all-in. You keep $30 — a 75% margin.
Learn more: Pricing
Promotion Customers & marketing
A specific push to get attention or sales, often for a limited time.
Example: "10% off your first lawn cut this month."
Learn more: Content
Prompt AI
The request or instructions you type into an AI tool.
Example: "Write three friendly Facebook posts for a lawn care business in Dayton."
Learn more: How to Write Better Prompts
Purpose (business purpose) Starting & planning
Why your business exists: the need or problem it serves for people. It's the 'why' behind your mission.
Example: "Old dolls get thrown away while collectors would treasure them." That's the purpose behind a thrifted vintage doll shop.
Learn more: Business Plan & Audience — Purpose, mission, and vision

Q

Quality control Running the business
Checking your work or products so they meet your standard every time, no matter who does the job.
Example: Doing a final walk-through with a checklist before leaving a cleaned home.
Learn more: Business Systems, Operations & Professionalism

R

Receipt Money
Proof that a payment happened — one you get when you buy, or one you give when a customer pays you.
Example: Keeping the store receipt for the shelving you bought for your booth.
Learn more: Bookkeeping
Referral Customers & marketing
When a customer sends a friend or family member to you.
Example: A happy client tells her sister about your meal prep, and the sister orders.
Learn more: Customer Retention
Resale certificate Legal & paperwork
Documentation given to a supplier to support a sales-tax exemption for goods you buy to resell, when the rules allow it. It is not the same document as a vendor's license.
Example: A doll reseller checks Ohio's exemption certificate rules for dolls bought for resale, rather than claiming personal purchases or every supply is exempt.
Learn more: Business Registration & Official Resources
Retail Products & selling
Selling directly to the person who will use the item, usually one at a time.
Example: Selling a candle to a shopper at the farmers market.
Learn more: Pricing
Return / refund policy Products & selling
Your written rules for if and how customers can send items back or get money back.
Example: "Returns accepted within 14 days if the item doesn't match the photos."
Learn more: Policies
Revenue (sales) Money
All the money that comes in from sales before you pay any expenses. Not the same as profit.
Example: You sold $500 of baked goods this month — that's your revenue.
Learn more: Cash Flow

S

S corp (S corporation) Legal & paperwork
A federal tax election with the IRS — not a separate legal structure you form with a state. An eligible corporation or eligible LLC can choose S corporation tax treatment if it meets the IRS's rules, which generally means profits pass through to the owners' personal returns. A corporation that doesn't make this election is often called a C corporation. Owners who work in the business generally need reasonable payroll, and there are extra filings and deadlines.
Example: An LLC owner whose accountant recommends S corporation taxes because profits have grown — the LLC stays an LLC; only its tax treatment changes.
Learn more: Business Structure & LLC
Sales tax Money
A tax added to the price of certain items or services, collected from the customer and paid to the state. Whether it applies depends on what you sell and where — check your state's tax department.
Example: Ohio sellers can check the Ohio Department of Taxation to see if they need a vendor's license.
Learn more: Tax Overview
SEO (search engine optimization) Online & technology
Using clear words and good information so people can find you when they search online.
Example: Writing "mobile car detailing in Dayton" on your page so local searchers find you.
Learn more: Content
Services Products & selling
Work you do for someone, instead of an item they take home.
Example: Braiding, cleaning, lawn care, tutoring.
Shipping Products & selling
Sending orders to customers by mail or delivery, and what it costs.
Example: Charging $8 to ship a doll in a padded box.
Learn more: Shipping
Shipping label Products & selling
The printed sticker with addresses and postage that goes on a package.
Example: Printing a label from your selling site and taping it to the box.
Learn more: Shipping
SKU (stock keeping unit) Products & selling
Your own short code for each item or version, so you can track it.
Example: DOLL-85-BLU for the 1985 doll in the blue dress.
Learn more: Products
Slogan Customers & marketing
A catchy phrase for a certain ad, season, or campaign. It can change more often than a tagline.
Example: "Back-to-school braids — book before the rush!"
Learn more: Branding
Social media marketing Customers & marketing
Using apps like Facebook, Instagram, or TikTok to show your work and reach customers.
Example: Posting a short video of a doll being cleaned and restored.
Learn more: Content
Sole proprietor (sole proprietorship) Legal & paperwork
A business owned by one person with no separate legal business set up. It's the simplest form, but you and the business are legally the same.
Example: You start mowing lawns under your own name.
Learn more: Business Structure & LLC
SOP (standard operating procedure) Running the business
Written step-by-step instructions for a task you do over and over, so it's done the same way every time.
Example: A checklist for opening your food stand that a helper can follow without calling you.
Learn more: Business Systems, Operations & Professionalism
Startup costs Starting & planning
The money you need to spend before or when you first open. Low cost is not the same as no cost.
Example: Buying a mower, flyers, and insurance before your first lawn job.
Learn more: Startup Budget
Supplier (vendor) Products & selling
A person or company you buy materials or products from. "Vendor" can also mean a seller at a market or event.
Example: The beauty supply store where you buy braiding hair.
Learn more: Startup Budget

T

Tagline Customers & marketing
A short phrase that sticks with your business name and says what you're about. It usually stays the same for years.
Example: "Sparkle Clean — Your home, refreshed."
Learn more: Branding
Target customer (ideal customer) Customers & marketing
The people most likely to buy what you're selling. Your ideal customer is a picture of one of those people.
Example: For senior tech help: older adults and their grown children who want them connected.
Learn more: Target Audience
Taxes Money
Money businesses and people owe the government. Small businesses may owe income tax, self-employment tax, and others depending on the situation. Ask a qualified tax professional about yours.
Example: Setting aside part of each payment so you're ready at tax time.
Learn more: Tax Overview
Trademark Legal & paperwork
Legal protection for a name, logo, or slogan that identifies your goods or services. A state name search is not the same as a trademark search.
Example: Checking the USPTO trademark search before printing 500 labels.
Learn more: Brainstorming Your Idea & Business Name
Transient vendor's license Legal & paperwork
Ohio's sales-tax license for a retailer transporting stock to temporary selling places. The state issues it, and it is valid throughout Ohio; other event permissions are separate.
Example: A seller bringing handmade products to temporary markets asks Ohio Taxation whether this license fits their selling setup.
Learn more: Business Registration & Official Resources

V

Value proposition Starting & planning
The simple reason a customer should choose you: what problem you solve and why your way is better or easier for them.
Example: "I come to your driveway, so you don't lose your Saturday at a car wash."
Learn more: Business Plan & Audience
Variable costs Money
Costs that go up or down depending on how much you sell or do.
Example: More braiding hair when you book more clients; more boxes when you ship more dolls.
Learn more: Startup Budget
Vendor's license Legal & paperwork
In Ohio, a sales-tax registration for sellers making taxable retail sales. The right type depends on where and how you sell. It is not an LLC, EIN, or permission to attend a market.
Example: A Dayton doll reseller checks county licensing for a fixed location and transient licensing before taking stock to pop-up markets.
Learn more: Business Registration & Official Resources
Vision statement Starting & planning
A sentence about what you hope your business becomes or changes in the long run.
Example: "To be the most trusted neighborhood cleaning service on the west side."
Learn more: Business Plan & Audience — Purpose, mission, and vision

W

Website Online & technology
Your own pages on the internet where people can learn about you, see prices, or contact you.
Example: A simple page with your services, photos, hours, and a booking link.
Learn more: Lovable App Planning
Wholesale Products & selling
Selling or buying many items at a lower price per item, usually to someone who will resell them.
Example: A boutique buys 30 of your candles at $6 each to sell in their shop.
Learn more: Pricing
Workflow Running the business
The usual order of steps you follow to get a job done.
Example: Order comes in → pack → print label → ship → send thank-you message.
Learn more: Business Systems, Operations & Professionalism

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