Glossary of Business Terms
Advertising
Paid promotions which draw attention to the benefits of a product or service in order to increase sales.
Agent
A person or business authorized to act on another’s behalf. Examples of agents include a salesman, distributor, attorney, etc.
Alternate text (Alt text)
Frequently abbreviated, alt text is a written label used to identify images. When images are upload to websites, social media or applications, these tags provide quick descriptions for search engine software, screen readers (for people who are visually impaired) and artificial intelligence.
Analytics
A term commonly used in finance and marketing to describe data patterns. Analytical measurements in marketing include open rate, impressions, click through rate and conversions. All these data points let you know how much users appreciate your content.
Asset
Items of value that businesses can sell. The term covers a broad range that includes real estate, equipment, brand, customer lists, intellectual property and more. Brochures and fliers are also sometimes referred to as marketing assets.
Bootstrap
When businesses launch using personal finances and existing resources such as personal computers, the process is called bootstrapping. Bootstrapping is not limited to money and resources, it can also include borrowing or sharing of assets, adjusting payment or contract terms to improve cash flow.
Bounce rate
A bounce occurs when a user comes to a website and either can’t load the site or leaves quickly without performing any action. Bounces are also recorded when emails are not delivered. A hard bounce rate can indicate that there is something technically wrong such as a server issue or a bad email address. A soft bounce on a website indicates that it is either too hard for the user to find what they want on your website or it doesn’t appeal to them. An email bounce rate can be caused by a block filter set up by the recipient. Bounce rates can be reduced if follow recommended user-experience guidelines.
Brand identity
A name, term, design, logo, symbol or other feature that defines one seller’s goods or services as distinct from another.
Brand mission
A brand mission describes both the purpose and goals of a company. As an example, Google’s mission statement is, “to organize the world’s information and make it universally accessible and useful”.
Break-even point
Operating breakeven occurs when your revenues equal your operating costs. Breakeven on an investment occurs when your cumulative receipts equal your cumulative investment.
Business concept
An idea for a business that includes basic information about the target market and unique selling proposition. Together these parts of a business concept give the business an advantage over the competition.
Business model
An organized description of the key elements of how a business will create, deliver and capture value. Your business model describes how your business will make money.
Business to business (B2B)
Transactions between businesses, rather than between businesses and consumers. For example, a legal consultant that offers services to a client company is running a B2B operation.
Business to consumer (B2C)
Transactions between businesses and consumers such as direct online sales to consumers. E-commerce businesses are B2C.
Buyer Persona
This fictional character represents the person most likely to use your services or buy your products. You may have more than one target buyer. Getting a picture of who your typical customer or client is, helps you to find them online and reach them through personalized communications. Target buyers are described by their demographics, such as age and location as well as psychographics, such as their passion for eating healthfully.
Cadence
A rhythm of doing things. This term is frequently used to describe a consistent delivery schedule of communications.
Call-to-action (CTA)
Short invitations to click a link on an email or website, such as “Buy now”. CTAs usually come in the form of bright buttons with small amounts of text describing the benefit or action to take. CTAs are designed to encourage you to perform an action.
CAN-SPAM
If you are sending out emails for commercial purposes, you must follow the Federal Trade Commission CAN-SPAM act requirements.
Click-through rate (CTR)
A percentage of digital users who click on a link. There are standard CTR rates listed according to industry for emails, websites and advertising. In advertising, the rate is used to measure the success of a campaign.
Collateral
An asset that a borrower pledges against a loan, such as equity you have in your property. Lenders may seize collateral assets if loans are not repaid. Marketers use this term to describe media assets such as a brochure.
CRM
A term used to describe a completed sale.
Competitive advantage
An advantage that a business has over competitors. This edge can be in the form of service, quality or price. Capitalizing on a competitive advantage can attract more customers and generate more profit for a business.
Core values
The values or ethics that guide a company.
Cost structure
Expenses that a company must account for when producing or delivering. Cost structure includes expenses that can change depending on sourcing of materials or manufacturing process. These are referred to as variable costs. Other costs that don’t change often, such as rent, and are called fixed costs. These two cost factors help businesses decide the amount of capital or sales earnings they will need to expand their operations.
Consumer relations management (CRM)
Technology that helps a company manage customer interactions and service.
Content
The words and images that go into communications. Content can be found on all digital channels such as websites and social media, as well as print materials and video.
Credit score
A rating number between 300-850 demonstrates the ability of an individual or business to repay a loan. Formed over time, credit scores are extracted from a variety of financial data including the payment history on credit cards, utilities, mortgages and student loans.
Depreciation
An accounting method used to record the market loss in value of an asset. These assets may be deducted annually from business taxes.
Demographics
The population characteristics that companies and their marketers must consider in developing their business models and marketing strategies, including age, race, gender, economic status, educational attainment, employment, lifestyle, etc.
Employer Identification Number (EIN)
Businesses should get a nine-digit tax identification number for reporting taxes.
Entrepreneur
An individual who identifies and seizes a unique business opportunity. Entrepreneurs are characterized as taking on more financial risk to create a business.
Franchise
A franchisee gets a type of license that allows them to access proprietary knowledge, processes and trademarks of someone else’s business. McDonald’s, for example, sells royalties to its food preparation system, recipes, supplies and the permission of the franchisee to sell its product under the business’s brand.
Gross revenue
Total sales before any costs are deducted.
Hashtag
Keywords that start with a hashtag symbol (#) that help to identify topics of interest. Hashtags are used in social media, websites and applications to help users find published information.
Inbound marketing
Paid search advertising is a form of inbound marketing because it is driven by the users interest in your product. Another form of inbound marketing is when a business offers information or tools in exchange for emails or the opportunity to sell a book or other product or service.
Influencer
Individuals who can move audiences to buy products and services on social media are called influencers. Influencers usually represent a sector and specific audience.
Innovator
An individual who introduces new ideas, products/services or methods that significantly change a business or industry’s operations or ways of doing business.
Key performance Indicators (KPIs)
A set of data points that allow you to measure progress in reaching set goals.
Landing page
A page on a website that is used to either carry out a sale or capture contact information of the user.
Market strategy
A plan that includes all marketing channels and messages and how they can work together to reach a company’s goal.
Marketing
Marketing activities are designed to get people interested in buying a product or service. These activities include branding, targeting, positioning and content.
Outbound marketing
When a company sends its message out to an audience. Direct mail campaigns and cold calling come under this heading.
Net profit (also known as “the bottom line”)
Net profit is total revenues minus all operating expenses and taxes
Niche
A product or service that is designed to serve a specific target market or market segment.
Outsourcing
The process of contracting a basic business function or operation to another individual or business. (The term does not usually cover contracting professional services, such as a lawyer).
Pain point
A term for a problem without a solution. Many successful businesses offer to fix a pain point.
Pixels
Digital images are measured in square pieces called pixels. Websites, for example, have standard pixel specifications for artwork.
Positioning
A marketing term used to describe how a company looks as compared to competitors. Marketers advise companies to position their services to attract a specific part of the market usually through branding or targeting.
Positve representation of warranty
Also known as a covenant, these are a type of promise. This term and its use is explained in this blog.
Product development
The process of developing new products or improving an existing product.
Profitability
A company’s ability to succeed in making a profit.
Profit margin
A ratio that a company or individual earns after all costs have been paid. This percentage can be calculated by net profits divided by sales. It’s a measure of how efficiently a company can be profitable and the relative strength of that profitability.
Ranking
Search engines rank website properties by their relevance to users. For example, if your website ranks on the first page of Google, it has high traffic or visitors. Some websites have high ranking because they have been online for a long time, have an unusual business offering, or because they have put search engine optimization tactics to work over a long time.
Readibility
Simple writing that is written without expert terms has better readability. Complex sentence structures and vocabulary that requires a high-level of education lower the readability of text. Connected to user experience, it is important to follow readability guidelines found in Word and Google Docs to make sure as many people as possible will understand your communications.
Return on investment (ROI)
Materials and talent assigned to a project are an investment. The return on that investment is a measurement of the desired outcome against expenses. For example, if you paid $100 a month for Facebook advertising and $200 for the production of the creative content in the ad, you’d set a goal to produce at least $300 worth of sales (or benefit), which would be an ROI of 1x.
Sales funnel
A description of how leads proceed from a first introduction to a sale. In virtual terms, a sales funnel may look something like this: social media post, to website landing page, to contact form, to email offer, to sale.
Social listening
Certain software is designed to record every time your business is mentioned online. This can help you determine your business relevance in comparison to others on social media channels, press outlets and blogs. Social listening is a way to understand how your audience is reacting to your brand.
Sole proprietor
Someone who owns and runs a business by themselves that is not incorporated.
Sourcing
A business arrangement with a third-party to provide something that your business needs to produce a product or service. For example, if you operate a restaurant, you need to source all ingredients in the dishes you sell. It’s advised to have back-up companies that can step in if one third-party is unable to continue to supply an important item. Sourcing can also be used to define the recruitment of workers.
Strategic alliance
An arrangement between two companies to share resources or opportunities so they can undertake a mutually beneficial project. Each company retains its own autonomy while benefiting together.
Supply chain
Stages of bringing a product from the design phase to the point of sale (such as retail shelf or shipping center). Depending on the product and where it is produced, supply chains may include manufacturing, production, packaging, labeling, warehousing and shipping.
Strength, Weakness, Opportunity and Threat (SWOT) analysis
An evaluation that a business conducts to understand the strength of their position in the market.
Individual Taxpayer identification number (ITIN)
Sole proprietors can use their social security number for taxes but using ITIN number can help protect identity. For more information about what number your business should register for go to the IRS website.
User experience
People who use digital sites, applications and tools are called users. The quality of their experience has gained importance as a number of digital experiences has mushroomed. User experience (UX) improvements include the speed and ease with which a user can get what they came for.
Web font
A standard set of fonts that work well on most websites.
Wireframe
A wireframe refers to the structure or scaffolding of a website. A website wireframe will look like a simple representation of pages and subpages that fall under menu headings.
Wholesaler
A business that buys in bulk and sells smaller quantities to businesses. Businesses that resell products, such as supermarkets, will purchase stock from wholesalers.