25 Business Terms you Need to Know

Whether you’re pitching your first business idea, building a website, or just curious about entrepreneurship, knowing the language of business gives you a serious edge. This list of 25 must-know terms will help you speak with confidence, make smarter decisions, and impress investors, mentors, and customers alike. Let’s dive in.

1. Revenue: The total amount of money a business earns before expenses.

   
   

   Example: If you sell 100 shirts for $10 each, your revenue is $1,000.

   
   
   
   

2. Profit: What’s left after subtracting your expenses from your revenue.

   
   

   Profit = Revenue – Expenses

Example: If each shirt costs $2 to make, your profit is $800 ($1000-$2(100)=$800)

3. Startup: A new business, usually with a fresh idea and high growth potential.

   
   

4. Target Market: The specific group of people your product or service is meant for.

Example: Teenagers who love streetwear living in urban areas.

5. Business Model: A plan for how your business makes money.

   
   

   Example: Subscription, one-time sales, or freemium.

*See How to Write a Simple Business Plan as a Teen for my information

6. Pitch: A short presentation or explanation of your business idea, often used to attract investors.

   
   

7. Marketing: The way you promote your product and connect with your audience.

   
   
   
   

8. Branding: How your business looks, feels, and is remembered. It includes your name, logo, voice, and reputation.

   
   

9. Break-Even Point: When your revenue exactly equals your costs—you’re not making a profit or a loss.

   
   

10. Cost of Goods Sold (COGS): The direct costs to produce your product or service.

Example: Materials, packaging, and labor.

11. Margin: The percentage of each sale that’s profit.

    
    

    Gross Margin = (Revenue – COGS) ÷ Revenue

    
    

12. ROI (Return on Investment): A measure of how much money you make compared to what you spend.

    Example: If you spend $100 and earn $200, your ROI is 100%.

    
    

13. Capital: The money or assets used to start or grow a business.

    
    

14. Investor: Someone who gives money to a business in exchange for equity (ownership) or a return.

    
    

15. Equity: Ownership in a company, usually given in exchange for investment.

    
    

16. Cash Flow: The money coming in and going out of your business.

    
    

Positive cash flow means more is coming in than going out.

17. Scalability: How easily your business can grow without massive increases in cost.

    
    

18. USP (Unique Selling Proposition): What makes your product or service different and better than others.

    
    

19. Supply Chain: The process of making and delivering your product from sourcing to customer.

    
    

20. Customer Acquisition: The process of gaining new customers.

    
    

    Includes marketing, sales, and promotions.

    
    

21. Conversion Rate: The percentage of people who take a desired action.

Example: A customer buying or signing up.

22. KPI (Key Performance Indicator): A metric used to track progress toward a goal.

    
    

    Example: Monthly sales, website visits, or customer retention.

    
    

23. B2C (Business-to-Consumer): A type of business that sells directly to individuals.

    
    

    Example: A clothing brand selling through Instagram.

    
    

24. Networking: Building relationships with people who can support or collaborate with your business.

    Think: mentors, partners, or other entrepreneurs.

    
    

25. B2B (Business-to-Business): A type of business that sells products or services to other businesses.

    Example: A teen-led design agency creating websites for local brands.