The Complete Guide to Common Business Terms
Finance, strategy, projects and meetings — terms with explanations and examples
Meetings and reports are full of terms that everyone seems to know — until someone asks what they mean. This reference explains the most common business terms in plain language, with an example for each. Bookmark it and come back whenever a term is unclear.
Finance
— Money in, money out and what is left
| Term | What it means | Example |
|---|---|---|
| Revenue | All money earned from sales | A store sold goods for 100,000 |
| Costs | Money spent to run the business | Rent, salaries and stock: 80,000 |
| Profit | Revenue minus costs | 100,000 − 80,000 = 20,000 |
| Margin | Profit as a share of revenue | 20,000 / 100,000 = 20% |
| Cash flow | Money actually coming in and going out over a period | Customers pay in 60 days, suppliers in 30 |
| Budget | The plan for revenue and costs | Marketing budget for Q3: 15,000 |
Price is what you pay. Value is what you get.
Strategy and goals
— How companies decide where to go and measure progress
Strategy terms answer four questions: where do we stand, where do we want to go, how much will it cost and who will do it. Click the markers to see the key terms for each.
A key performance indicator measures one important result regularly. Example: “Customer satisfaction score of at least 4.5 out of 5”.
Mission
Why the company exists.
Vision
What the company wants to become.
Objectives
What the company aims for in a given period.