Welcome to Business Terminology!
Have you ever stumbled upon some business jargon and clicked on 20-odd articles to clearly understand what it means? We feel you!
And hence, we have created this repository of terms with deep research and fine detailing.
Find everything from bootstrapping to funding, from NDA to balance sheets, explained through in-depth articles written by industry experts!
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A balance sheet is a financial statement of a company. It includes assets, liabilities, equity capital, total debt etc. at a particular point in time. It includes assets on one side and liabilities on the other.
Simply put, it is a snapshot of the financial status of a company at any given time. It is usually calculated every quarter, six months or a year.
Bootstrapping means starting and growing a startup from scratch without anyone’s financial help. It is a process wherein a new business gets started with its operation without any external funding.
Asset refers to any useful or valuable thing or a person. In business terminology, asset refers to any kind of monetary value owned by a business.
Liability is something that the company owes. Generally, it is an obligation or something that you owe somebody. Often times, liabilities are also defined as a company’s legal financial debts that arise in the entire course of business operations and growth.
ESOP is a part of the retirement and employee benefit plan giving the ownership of interest to employees. This ownership comes in the form of company shares, which is assured upon fulfilling predefined conditions. But most often, ESOPs become a part of their compensation offering in startups, to motivate employees to give their best at work.
Inventory management includes aspects such as controlling and overseeing purchases, both from the suppliers and from the customers. This includes maintaining stock, controlling the amount of product for sale and order fulfilment.
Limited Liability Partnership (LLP)
A limited liability proprietorship is a mix of both a partnership and a company, put together to form a single organisation. It is a formal partnership between at least two business partners. Each of the business partners is provided with limited liability, which means they do not stand responsible for any loss, debts or liabilities that the business might face.
Minimum Viable Product (MVP)
A minimum viable product means a product which usually has one basic set of features. It is released to a handful of people to test a new business idea and gauge people’s or your potential customers’ reaction to it.
Non-disclosure Agreement (NDA)
A non-disclosure agreement or NDA is a written contract between two parties (people or organisations) that prohibits the sharing of confidential information shared between both the ends.
A Permanent Account Number is a 10-character alphanumeric identifier. It is issued by the Income Tax Department to all judicial entities identified under the Indian Income Tax Act, 1961. The primary purpose of PAN is to identify all financial transactions of an individual or company and prevent the evasion of taxes. PAN also acts as an important proof of identification.
An online payment gateway (PG) is a tunnel that connects your bank account to the platform where you need to transfer your money. A PG is a software that authorises you to conduct an online transaction through different payment modes like net banking, credit card, debit card, UPI or the many online wallets that are available these days.
A PG plays the role of a third party that securely transfers your money from the bank account to the merchant’s payment portal.
Pre-money & Post-money Valuation
Pre-money valuation refers to the value of a company excluding the latest round of funding. Simply put, pre-money valuation evaluates the worth of the startup before it steps out to receive the next round of investment. Post-money valuation, on the other hand, refers to the value of a company after it raises money and investment for itself. This includes outside financing or the latest rounds of funding.
Private Limited Company
A private limited company is a privately-held business entity. It is held by private stakeholders. The liability arrangement in a private limited company is that of a limited partnership, wherein the liability of a shareholder extends only up to the number of shares held by them.
A sole proprietorship, in simple words, is a one-man business. This means, it is owned and run by an individual. A sole proprietorship is not a legal entity but a description of the type of business.
Funding is the money raised by a startup or provided by an individual, organisation or government bodies to a startup for a particular purpose.
Stock Keeping Unit (SKU)
SKU is used by retailers to identify and track their inventory or stock. SKU is a unique code consisting of alphabets and numbers that identifies the characteristics of each product such as the manufacturer, brand, style, size and colour.
Unique Selling Point
Unique Selling Proposition or USP is that one thing or a number of things that makes your business better than all your existing competitors. It refers to that specific benefit that makes your business idea stand out when evaluated with all the other businesses and their models in the market.
In the venture capital industry, the term unicorn refers to any startup that reaches the valuation of $1 billion. The term was first coined by Aileen Lee, founder of Cowboy ventures when she referred to the 39 startups that had a valuation of over $1 billion as unicorns.
Venture capitalists are well-heeled investors that often invest their capital in businesses with indelible growth opportunities. The infused capital is called venture capital.
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