Essential Business Terms

Definition: The total amount of money a business earns from selling goods or services.

Example: "The company had a revenue of $1 million last year."

Definition: The money a business keeps after paying all its expenses.

Example: "After paying salaries and rent, they made a profit of $200,000."

Definition: When a business spends more money than it earns.

Example: "The restaurant suffered a loss during the first six months."

Definition: A person or business that buys goods or services.

Example: "We try to keep our customers happy so they come back."

Definition: A person or company that provides goods or materials to another business.

Example: "We buy our ingredients from a local supplier."

Definition: A document showing what a customer owes for goods or services.

Example: "The company sent us an invoice for the computers we ordered."

Definition: A place or group of people where products or services are sold.

Example: "We want to expand into the European market."

Definition: Activities a business does to promote and sell products or services.

Example: "They spent a lot on online marketing to attract new customers."

Definition: The specific group of people a product or service is aimed at.

Example: "Our target audience is young professionals aged 25–35."

Definition: The identity of a product or company, including its name, logo, and reputation.

Example: "Apple is a brand known for quality and innovation."

Definition: A new company, usually in its early stages and often focused on innovation.

Example: "She launched a tech startup to develop a new education app."

Definition: Money used to start or grow a business.

Example: "We raised capital from investors to open more stores."

Definition: Putting money into something to make a profit.

Example: "Buying shares in the company was a smart investment."

Definition: Anyone who is affected by or has an interest in a business (e.g., employees, customers, investors).

Example: "Stakeholders were informed about the company’s new policy."

Definition: A person who owns shares in a company.

Example: "Shareholders will receive a dividend at the end of the year."

Definition: When two companies join to form one.

Example: "The merger created the largest airline in the region."

Definition: Things a business owns that have value, like cash, property, or equipment.

Example: "Their assets include two buildings and several delivery vans."

Definition: Debts or obligations a company owes to others.

Example: "Their liabilities include bank loans and unpaid taxes."

Definition: The movement of money in and out of a business.

Example: "We need to improve cash flow so we can pay our bills on time."

Definition: When a business’s income equals its expenses, and it is not making a profit or a loss.

Example: "We reached the break-even point after six months of operations."