This list includes 20 key terms that are commonly used in the world of business.

Essential Business Key Terms

The money a business earns from sales.

Example: The company's revenue increased by 10% last year.

The money a business spends on expenses, such as materials and labor. 

Example: The cost of materials for the project was higher than expected.

The money a business makes after subtracting its expenses from its revenue. 

Example: The company's profit margin decreased due to increased competition.

Putting money into a business with the hope of making a return. 

Example: The investor made an investment in the startup.

The money a business uses to start or operate.

Example: The small business owner used her savings as capital to start the company.

The legal responsibility that a person or entity has for debts, obligations, or damages that may arise from their actions or products. 

Example: The company faced a lawsuit due to its liability for a faulty product.

Something of value that a business owns. 

Example: The experienced sales team was considered an asset to the company's success in closing deals.

The ownership interest in a business. 

Example: The investor bought shares of stock to gain equity in the company.

The measure of profitability for an investment. 

Example: The ROI for the company's marketing campaign was calculated to be 20%.

The group of consumers or businesses for which a product or service is intended. 

Example: The company identified its target market through market research.

The activities involved in promoting and selling a product or service. 

Example: The company's marketing strategy included social media and email campaigns.

The process of selling products or services to customers. 

Example: The sales team met their monthly quota by increasing their outreach efforts.

The relationship between how much of a product or service is available (supply) and how many people want it (demand).

Example: The price of a product can go up or down based on supply and demand.

A  person who starts and operates a business. 

Example: The entrepreneur founded a successful startup.

A business structure in which two or more individuals share ownership and responsibility. 

Example: The partners worked together to grow the business.

Hiring a third-party company to perform a specific task or service. 
Example: The company outsourced its accounting to a firm in another country.

The department within a business is responsible for managing employee relations.
 
 Example: The human resources department conducted interviews to hire new employees for the company.

The unique advantage that a business has over its competitors. 

Example: The company's competitive advantage was its high-quality customer service.

A document outlining a business's goals, strategies, and financial projections. 

Example: The entrepreneur wrote a business plan to present to potential investors.

The buying and selling of goods and services online. 

Example: The company started an e-commerce platform to reach new customers.