Business Terms
A comprehensive dictionary of key small business terms & definitions. Gain a clear understanding of industry jargon to stay informed to make informed decisions for your small business’s success.
Acquisition
Process where one company purchases most or all of another company's shares to gain control.
Adaptive Firm
A business that modifies its strategies and operations to adapt to changes in the business environment.
Addendum
A document or information added or attached to the original documents, detailing changes or additions.
Affiliate Marketing
A marketing tactic where a business earns a commission for marketing another company's products.
Agent
An individual authorized to act on behalf of another (business or person) in business transactions.
Agile Working
A way of working that empowers employees to work where, when, and how they choose to increase productivity and efficiency.
All Rights Reserved
A copyright term indicating that the copyright holder reserves all rights provided by copyright law.
Amendment
A formal change or addition made to a document or agreement.
Angel Investor
A high net worth individual who provides financial backing for small startups or entrepreneurs, usually in exchange for ownership equity.
Annual Meeting
A mandatory yearly gathering of a company's interested shareholders.
Annual Report
A comprehensive report on a company's activities throughout the preceding year.
Anonymous LLC
A limited liability company where the ownership details are not publicly disclosed.
Apostille
A certificate that authenticates the origin of a public document for use across countries.
Arbitration
A dispute resolution technique outside of courts, where the parties to a dispute refer it to one or more persons for a binding decision.
Arm’s Length Relationship
A relationship wherein the parties are acting independently and on their own best interest.
Articles of Incorporation
A document required to form a corporation, detailing the primary characteristics of the corporation.
Articles of Organization
A document that establishes the existence of an LLC, setting forth certain basic information about the new entity.
Asset Protection Trust
A financial-planning vehicle that holds a person's assets to shield them from creditors.
Automation
Use of various control systems for operating equipment with minimal or reduced human intervention.
B Corporation
B Corporations are businesses certified by the nonprofit B Lab for meeting rigorous standards of social and environmental performance.
B2B
Business-to-business (B2B) refers to transactions between two businesses, like a manufacturer selling to a wholesaler.
B2C
Business-to-consumer (B2C) pertains to businesses selling products or services directly to individual consumers.
B2G
Business-to-government (B2G) includes transactions where businesses provide products or services to government entities.
Barriers to Entry
Barriers to Entry are obstacles that make it difficult for new companies to enter a specific market.
Benefits
Benefits are forms of value, other than payment, that are provided to employees in return for their contribution to the organization.
Better Business Bureau
The Better Business Bureau (BBB) is a private nonprofit organization that provides free business reviews on more than 4 million businesses.
Blockchain
Blockchain is a type of database that takes a number of records and puts them in a block (rather like collating them on to a single sheet of paper).
Blog
A blog is an online journal or informational website displaying information in reverse chronological order, with the latest posts appearing first.
Board Chair
The Board Chair is the highest officer of an organizational board of directors and leads the board's functions.
Board of Directors
A Board of Directors is a group of people who jointly supervise the activities of an organization.
Brand
A brand is a name, term, design, symbol or any other feature that identifies one seller's goods or service as distinct from those of other sellers.
Brand Loyalty
Brand loyalty is a consumer's commitment to repurchase or continue using the brand.
Breach of Contract
A Breach of Contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties.
Brochure
A brochure is an informative paper document that can be folded into a template, pamphlet, or leaflet.
Broker
A Broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
Business Address
The Business Address is the location of a business's primary operations or registered office.
Business Manager
A Business Manager oversees the activities of a business or department, making strategic decisions to ensure profitability.
Business Name
The Business Name is the official name under which a company does business.
Business Name Checker
A Business Name Checker is a tool to check the availability of a specific business name in a certain jurisdiction.
Business Plan
A Business Plan is a formal written document containing business goals, methods to achieve them, and the time frame for their achievement.
Business Structure
Business Structure refers to the legal organization of a business, which can range from sole proprietorship to corporation.
Business Travel
Business Travel is travel undertaken by company employees for the purpose of conducting business on behalf of the company.
Buy-Sell Agreement
A Buy-Sell Agreement is a legally binding agreement used to reallocate a share of a business if an owner leaves or dies.
Buyer’s Market
A Buyer’s Market refers to a market condition characterized by lower prices and increased supply, favoring buyers.
Bylaws
Bylaws are the rules and methods that govern the conduct of a company and manage the affairs
C Corporation (C Corp)
C Corporation is a legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.
C-Level
C-Level refers to high-ranking executive titles within an organization usually beginning with the letter 'C', like CEO, CFO, COO, etc.
Call to Action
A Call to Action (CTA) in business is a prompt that tells the target audience to take some specified action.
Captive Market
A Captive Market refers to a scenario where customers are obliged to buy a company's product due to lack of alternatives.
Certificate of Amendment
A document issued by a state to represent changes made to a corporation’s charter.
Certificate of Authority
A document that gives a foreign corporation authority to conduct business in a state other than its home state.
Certificate of Cancellation
Filed when a corporation or LLC decides to formally terminate its existence.
Certificate of Good Standing
A document proving that a corporation is legally registered and allowed to conduct business.
Certified Public Accountant
A Certified Public Accountant (CPA) is a professional designation for accountants who have met certain requirements.
Chatbot
A Chatbot is a computer program that simulates and processes human conversation, enabling interaction with customers.
Chief Executive Officer
A Chief Executive Officer (CEO) is the highest-ranking officer in a company, responsible for making major corporate decisions.
Chief Financial Officer
A Chief Financial Officer (CFO) manages a company's financial actions and strategy.
Chief Human Resources Officer
A Chief Human Resources Officer (CHRO) is responsible for developing and executing human resource strategy.
Chief Investment Officer
The Chief Investment Officer (CIO) oversees the investment portfolio of a company or organization.
Chief Marketing Officer
The Chief Marketing Officer (CMO) manages the execution of a company's marketing and advertising initiatives.
Chief Operations Officer
The Chief Operations Officer (COO) oversees a company's business operations ensuring they are efficient and effective.
Classified Board of Directors
A Classified Board of Directors is one that is divided into classes serving different term lengths.
Close Corporation
A Close Corporation is a company whose shares are held by a select few individuals who are usually closely associated with the business.
Competitive Advantage
A Competitive Advantage is a unique advantage that allows a company to outperform its competitors.
Competitive Analysis
Competitive Analysis is the strategy of identifying major competitors and researching their products, sales, and marketing strategies.
Compliance
Compliance in business refers to a company obeying all legal laws and regulations in regard to how they manage the business.
Consideration
Consideration is what is given in exchange for goods or services in a contract, like money, services, or goods.
Consolidation
In business, Consolidation refers to the merger of two or more corporations into a new entity.
Constituent
A Constituent refers to any key party who has an interest in the outcomes of a business, like shareholders or employees.
Content Marketing
Content Marketing involves creating and sharing online material that promotes a brand and stimulates interest in its products or services.
Conversion
Conversion in business refers to the process of turning a prospect into a customer.
Conversion Rate
Conversion Rate is the percentage of users who take a desired action like making a purchase or filling out a form.
Copyright
Copyright is a legal right that protects original works of authorship, such as books, music, film, and software.
Corporate Charter
A Corporate Charter, also known as articles of incorporation, is a legal document establishing a corporation.
Corporate Indicator
Corporate Indicator refers to words like Corp, Inc, Co, etc., which indicate a company is incorporated.
Corporate Kit
A Corporate Kit is a customized binder with documents needed for the ongoing management of a corporation or LLC.
Corporate Resolution
A Corporate Resolution is a formal declaration made by a board of directors on behalf of the company.
Corporate Seal
A Corporate Seal is a stamp used by a company to authenticate its corporate activities and legal documents.
Corporation
A Corporation is a legal entity separate from its owners (shareholders), offering them limited liability protection.
Deed of Trust
A Deed of Trust is a legal document in real estate that transfers title to a neutral third party, the trustee, until a debt is paid.
Direct Mail Marketing
Direct Mail Marketing is a promotional strategy where printed ads are sent directly to potential customers through postal mail.
Director
A Director is an elected individual who, along with other directors, oversees the policies and direction of a corporation or organization.
Dissolution
Dissolution is the formal process through which a business ends its operations and distributes its assets.
Dissolve
To Dissolve a company means to legally terminate its existence, often following the settlement of debts and distribution of assets.
Doing Business As (DBA)
Doing Business As (DBA) is a name under which a corporation operates, not its legal name.
Domain Name
A Domain Name is an online address, often chosen to represent a business, where internet users can access a website.
Domestication
Domestication refers to a process where a foreign corporation becomes a domestic one in another state.
Downsizing
Downsizing refers to a strategic reduction in a company’s size, often involving layoffs, to improve efficiency or manage costs.
Early Adopters
Early Adopters are individuals or entities that start using a product or technology soon after it becomes available.
eCommerce
eCommerce, short for electronic commerce, is the selling and buying of goods and services over the internet.
EIN
An Employer Identification Number (EIN) is a unique number assigned by the IRS to a business for tax purposes.
Employment Agreement
An Employment Agreement is a legal contract detailing the terms and conditions of employment between employer and employee.
Entity Type
Entity Type refers to the legal structure of a business, such as a corporation, partnership, or sole proprietorship.
Entrepreneur
An Entrepreneur is an individual who starts, organizes, and manages a business, assuming the risks and rewards.
Experience Curve
The Experience Curve is a business concept that suggests costs per unit can decrease the more a company produces a product.
Family Limited Partnerships
A Family Limited Partnership is a type of arrangement created to manage and control a family business or assets.
Features, Advantages, and Benefits (FAB)
FAB refers to product characteristics (Features), their advantages, and how they benefit the consumer.
Fictitious Business Name
A Fictitious Business Name, similar to DBA, is a name under which a company operates but is not its legal name.
Fiduciary Duty
Fiduciary Duty is the legal responsibility of one party to act in the best interest of another in managing assets.
First Mover Advantage
First Mover Advantage refers to the competitive edge gained by being the first to market with a product or service.
Form 1023
Form 1023 is an IRS form that non-profits fill out to apply for federal tax-exempt status.
Form 2553
Form 2553 is an IRS form used by corporations and LLCs to elect to be treated as an S corporation for tax purposes.
Form 8832
Form 8832 is an IRS form that a business entity uses to elect how it will be classified for federal tax purposes.
Freelancer
A Freelancer is an individual who is self-employed, offering services to multiple clients without long-term commitments.
General Corporation
A General Corporation is a business entity that offers limited liability for its shareholders, who own and control it.
Going Public
Going Public refers to a private company's initial public offering (IPO), becoming a publicly-traded and owned entity.
Golden Parachute
A Golden Parachute is a clause in a top executive's employment contract ensuring a large payout if the executive leaves the company.
Good Faith
Good Faith in business implies dealings are conducted honestly and without intention of defrauding or deceiving.
Goodwill
In business, Goodwill is the intangible asset that arises when a business is acquired and the purchase price exceeds its book value.
Guarantor
A Guarantor is a person or entity that guarantees to fulfill a responsibility or repay a debt of another person or entity.
Guerrilla Marketing
Guerrilla Marketing refers to unconventional marketing strategies intended to get maximum results from minimal resources.
Harvesting
In business, Harvesting refers to the reduction or termination of investment in a product, service, or business.
Holding Company
A Holding Company is an entity that owns the securities for other companies but doesn't produce goods or services itself.
Human Resources
Human Resources (HR) is the department in a business responsible for all aspects related to its workforce.
Ideas Versus Opportunities
This refers to the distinction between an innovative concept (idea) and a viable, marketable proposition (opportunity).
Incorporated Business
An Incorporated Business is a company that has been formed into a legal corporation by completing the required procedures.
Incorporation
Incorporation is the legal process of forming a corporate entity, providing liability protection for its owners.
Incorporator
An Incorporator is an individual or entity responsible for the process of incorporation of a business.
Incorporators Statement
An Incorporators Statement is a document containing initial decisions made by the incorporator(s) of a corporation.
Independent Contractor
An Independent Contractor is a self-employed individual who provides goods or services under a contract or verbal agreement.
Initial Public Offering (IPO)
An IPO is when a private corporation offers its shares to the public in a new stock issuance.
Injunction
An Injunction is a legal order that requires an individual or entity to stop doing something to prevent harm or damage.
Innovators
In business, Innovators are companies or individuals that are first to introduce new products or methods.
Intrapreneurship
Intrapreneurship refers to the practice of entrepreneurship within the confines of an established company.
IRS
The Internal Revenue Service (IRS) is the U.S. government agency responsible for tax collection and tax law enforcement.
Jurat
A Jurat is a statement on an affidavit indicating when, where, and before whom it was sworn to.
Labor
Labor refers to the human resources that a company utilizes in its operations or production process.
Limited Liability Company
An LLC is a business structure combining the pass-through taxation of a partnership with the limited liability of a corporation.
Limited Liability Partnership
A Limited Liability Partnership (LLP) is a partnership where some or all partners have limited liabilities.
Limited Partnership
A Limited Partnership (LP) consists of one or more general partners and one or more limited partners.
Limited Personal Liability
Limited Personal Liability shields personal assets from business debts and obligations.
Loyalty Programs
Loyalty Programs incentivize repeat purchases by offering rewards to frequent customers.
Management
Management refers to the coordination and administration of tasks to achieve a goal.
Manager
A Manager is a person who is responsible for controlling or administering an organization or group of staff.
Manager-Managed
In a Manager-Managed LLC, members appoint a manager(s) to conduct the business.
Market
A Market is a place where buyers and sellers interact to trade goods, services, or contracts.
Market Correction
A Market Correction is a decrease in the market price of an asset or market index, typically by at least 10%.
Market Development Funds
Market Development Funds are resources provided by manufacturers to promote products or services.
Market Penetration Strategy
A strategy aiming to increase market share for existing products or services in existing markets.
Market Segmentation
Market Segmentation is the process of dividing a market into distinct subsets of consumers with common needs or characteristics.
Market Share
Market Share is the percentage of an industry's sales that a specific company owns.
Market Size
Market Size refers to the total potential buying power in a market, often measured in terms of total sales or total customers.
Marketing Mix
The Marketing Mix includes product, price, place, and promotion strategies of a business.
Member
In a business context, a Member is an owner of a company, particularly in LLCs or cooperatives.
Merger
A Merger is a strategic move where two companies agree to combine their operations into a single entity.
Mission Statement
A Mission Statement is a formal summary of the aims and values of a company or organization.
Model Registered Agents Act
An act providing a statutory framework for the service of process on registered agents.
Multi-Member LLC
A Multi-Member LLC is a Limited Liability Company with more than one owner.
Name Registration
Name Registration is the process of legally registering a business's trade name.
Name Reservation
Name Reservation is the act of reserving a company name prior to its formation.
Newsletter Subscriptions
Newsletter Subscriptions are opt-in services where businesses send regular updates to subscribers via email.
Notice of Litigation
A Notice of Litigation is a written notification that a lawsuit has been filed involving certain legal rights of the recipient.
Operating Agreement
An Operating Agreement outlines the governance and operating procedures of an LLC.
Operations Control
Operations Control involves monitoring and managing a company's operational activities.
Operations Plan
An Operations Plan is a plan that describes how the regular operations of a business will run.
Outsourcing
Outsourcing involves hiring outside individuals or organizations to handle certain business tasks.
Partner
A Partner is an individual who shares ownership in a business.
Partnership
A Partnership is a legal form of business operation between two or more individuals who share management and profits.
Partnership Agreement
A Partnership Agreement outlines the terms and conditions agreed upon among business partners.
Patent
A Patent is a legal protection that gives inventors exclusive rights to their inventions.
Perpetual Existence
Perpetual Existence refers to a corporation's continued existence, regardless of changes in ownership or management.
PEST Analysis
PEST Analysis studies external factors (Political, Economic, Social, and Technological) affecting a business.
Positioning
Positioning refers to a marketing strategy aiming at making a brand occupy a distinct position in the mind of the customer.
President
A President is a senior executive in a company who reports to the Board of Directors.
Pricing Strategy
Pricing Strategy is the method companies use to price their products or services.
Product Life Cycle
Product Life Cycle is the cycle through which every product goes from introduction to withdrawal or eventual demise.
Product Line Pricing
Product Line Pricing is a strategy to set prices for a line of products based on cost differences between the products, customer perceptions, and competitors' prices.
Professional Association
A Professional Association is a group of individuals who share common professional interests.
Professional Corporation
A Professional Corporation is a type of corporation for professionals such as lawyers, doctors, architects, or accountants.
Professional LLC
A Professional LLC is a special type of LLC for licensed professionals like doctors, lawyers, or accountants.
Promoter
A Promoter initiates and takes on the risk of setting up a business or enterprise.
Proprietary (Private) Limited Company
A Proprietary Limited Company is a privately-owned entity in which ownership is issued, subscribed, or transferred by private dealings.
Proxy
A Proxy is an individual authorized to act on behalf of another, particularly in the context of voting at a shareholder meeting.
Public Benefit Corporation
A Public Benefit Corporation is a type of corporation intended to produce a public benefit and operate in a responsible and sustainable manner.
Publicly Traded
A company is Publicly Traded if its shares can be bought/sold on a stock exchange.
Punitive Damages
Punitive Damages are awarded in legal cases as a form of punishment and deterrent for outrageous conduct.
Quorum
A Quorum is the minimum number of members who must be present to make decisions at a meeting.
Receiver
A Receiver is a person appointed as custodian of a person's or business's property, usually in cases of bankruptcy or insolvency.
Recession-Proof
A Recession-Proof business or industry is one that is not greatly affected by a poor economy.
Registered Agent
A Registered Agent receives service of process and other legal documents on behalf of a business.
Regulations
Regulations are rules established by government or other authority to control the way something is done.
Reinstated Articles of Incorporation
These are articles that have been reinstated after a corporation has been administratively dissolved.
Reinstatement
Reinstatement is restoring a corporation to active status after it has been administratively dissolved.
Resolution
A Resolution is a formal decision made by a company’s shareholders or board of directors.
Respondeat Superior
Respondeat Superior is a legal doctrine holding an employer liable for an employee's actions done within their employment.
Rights of First Refusal
Rights of First Refusal allow stakeholders first chance to buy a stake before the owner sells to someone else.
S Corporation (S Corp)
An S Corp is a corporation that elects to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.
S Election
S Election is the IRS form filed by corporations that want to be treated as an S Corp.
Secretary of State
The Secretary of State is a state government official who handles business filings.
Senior Corps of Retired Executives (SCORE)
SCORE is a nonprofit association dedicated to helping small businesses through education and mentorship.
Series LLC
A Series LLC allows for segregation of assets, obligations, and operations into independent series within the LLC.
Service of Process
Service of Process is the procedure of giving an appropriate party notice of legal action.
Share
A Share represents a unit of ownership in a corporation or financial asset.
Shareholder Agreement
A Shareholder Agreement is a contract between a corporation's shareholders, outlining rights and obligations.
Single-Member LLC
A Single-Member LLC is an LLC with only one owner.
Small Business Administration
The Small Business Administration provides support to small businesses in the form of loans and advice.
Small Business Investment Council (SBIC)
SBIC is a privately owned investment company licensed by the Small Business Administration to provide financing to small businesses.
Sole Proprietor
A Sole Proprietor is the single owner of a business that is not incorporated or registered as an LLC.
Statement of Information
A Statement of Information updates or confirms the records of a business entity's data with the state.
Statutes
Statutes are written laws passed by legislative bodies.
Statutory Agent
A Statutory Agent, similar to a Registered Agent, receives service of process and official government communications on behalf of a business.
Subscription Business Model
A Subscription Business Model charges customers a recurring fee to access a product or service.
Subsidiary
A Subsidiary is a company controlled by a holding or parent company.
SWOT Analysis
SWOT Analysis is a strategic planning tool assessing strengths, weaknesses, opportunities, and threats.
Takeover
A Takeover occurs when an acquiring company makes a bid to assume control of a target company.
Target Market
A Target Market is a specific group of customers at which a company aims its products and services.
Tort
A Tort is a civil wrong causing harm to someone, for which the injured person may sue the wrongdoer.
Treasurer
A Treasurer is an officer responsible for managing an organization's financial affairs and investments.
Underwriter
An Underwriter evaluates and assumes another party's risk for a fee in the form of a commission, premium, spread, or interest.
Valuation
Valuation is the process of determining the current worth of an asset, company, or property.
Venture Capital
Venture Capital is financing provided to early-stage, high-potential, start-up companies.
Voluntary Dissolution
Voluntary Dissolution is the closing of a company initiated by its owners.
Voting Rights
Voting Rights are the rights of shareholders to vote on matters of corporate policy and on who is to compose the board of directors.
Website
A Website is a collection of web pages representing a business, brand, or other entity on the Internet.
Wholesaler
A Wholesaler is an intermediary entity in the distribution channel that buys in bulk and sells to resellers rather than consumers.
Winding Up
Winding Up is the process of selling all the assets of a company, paying off creditors, and distributing any remaining assets to the partners or shareholders.
