Business glossary
Business and startup terms, in plain English.
46 terms from finance, marketing, economics and trade, each linked to a full guide.
B
- Balance of payments
- A record of all money flowing between a country and the rest of the world over a period: trade in goods and services, income, and capital flows. Read more →
- Balance sheet
- A snapshot of what a business owns (assets), what it owes (liabilities) and the owners’ stake (equity) on a given date. Read more →
- Benchmarking
- Comparing your processes, costs or results against a competitor or industry leader to find gaps worth closing. Read more →
- Bootstrapping
- Building a business with your own savings and early revenue instead of outside investment. Read more →
- Break-even point
- The sales level where total revenue equals total cost, so the business makes neither profit nor loss. Read more →
- Business Model Canvas
- A one-page template with nine blocks (customers, value proposition, channels, revenue and so on) for mapping how a business makes money. Read more →
C
- Capital Asset Pricing Model (CAPM)
- A formula that estimates the return investors should expect from an asset, based on its risk relative to the market. Read more →
- Capital expenditure
- Money spent on long-term assets such as machinery or buildings, as opposed to day-to-day running costs. Read more →
- Capital gearing
- The ratio between fixed-cost funding (debt and preference shares) and equity in a company’s capital. Read more →
- Capital structure
- The mix of debt and equity a company uses to fund itself. Read more →
- Commercial bill
- A short-term bill of exchange used in trade credit, which the holder can discount with a bank for cash before it matures. Read more →
- Cost of capital
- The minimum return a business must earn on an investment to satisfy its lenders and shareholders. Read more →
- Credit rating
- An agency’s assessment of how likely a borrower is to repay its debt on time. Read more →
D
- Depository
- An institution that holds securities such as shares in electronic form. In India, NSDL and CDSL. Read more →
- Derivatives
- Financial contracts whose value depends on an underlying asset, such as futures, options and swaps. Read more →
- DPIIT recognition
- Official startup status from the Department for Promotion of Industry and Internal Trade, which unlocks Startup India benefits. Read more →
E
- Elements of cost
- The building blocks of total cost: material, labour and other expenses, each split into direct and indirect. Read more →
F
- Fiscal policy
- How a government uses taxes and public spending to influence the economy. Read more →
- Franchising
- A model where a business owner licenses its brand and system to another operator in return for fees or royalties. Read more →
G
- Grant
- Money given to a business that does not have to be repaid, often by government schemes or foundations. Read more →
I
- Incoterms
- Standard international trade terms (such as FOB and CIF) that set who pays for and bears the risk of shipping at each stage. Read more →
- Intrapreneurship
- Entrepreneurial behaviour by employees inside an existing company, such as building a new product line. Read more →
- Inventory control
- Methods for keeping the right amount of stock: enough to meet demand without tying up too much cash. Read more →
L
- Lean Canvas
- A one-page business plan adapted from the Business Model Canvas for early-stage startups, focused on problem, solution and key metrics. Read more →
- Letter of credit
- A bank’s promise to pay an exporter once agreed shipping documents are presented, which reduces payment risk in trade. Read more →
M
- Marginal costing
- A costing method that treats only variable costs as product costs, used for break-even and pricing decisions. Read more →
- Market segmentation
- Dividing a market into groups of buyers with similar needs so you can target them more precisely. Read more →
- Marketing mix
- The set of decisions a business makes about product, price, place and promotion (the 4Ps). Read more →
- Mixed economy
- An economy where private businesses and the government both own and run enterprises. India is an example. Read more →
- Monopolistic competition
- A market with many sellers offering similar but differentiated products, such as restaurants or clothing brands. Read more →
- Monopoly
- A market with a single seller and no close substitutes. Read more →
- Mutual fund
- A pooled investment where many investors’ money is managed together by a professional fund manager. Read more →
O
- Oligopoly
- A market dominated by a few large sellers, such as telecom or airlines. Read more →
P
- Penetration pricing
- Launching at a low price to win market share quickly, then raising it later. Read more →
- Perfect competition
- A theoretical market with many buyers and sellers, identical products and no single price-setter. Read more →
- Portfolio theory
- The idea that spreading money across assets that do not move together lowers risk for the same expected return. Read more →
- Pre-shipment finance
- Working capital a bank lends to an exporter before goods are shipped, to buy materials and produce the order. Read more →
- Price skimming
- Launching at a high price for early adopters, then lowering it over time. Read more →
- Pricing strategy
- The method a business uses to set prices, such as cost-plus, value-based, penetration or skimming. Read more →
- Privatization
- Transferring ownership or control of a government enterprise to private owners. Read more →
- Product-market fit
- The point where a product clearly satisfies a market that wants it, usually visible in retention and word of mouth. Read more →
S
- Supply chain drivers
- The levers that shape supply chain performance: facilities, inventory, transportation, information, sourcing and pricing. Read more →
T
- Total Quality Management (TQM)
- A company-wide approach to quality that involves every employee in continuous improvement. Read more →
- Trading on equity
- Using borrowed money to raise the return on shareholders’ equity, also called financial leverage. Read more →
U
- Udyam registration
- The free online MSME registration in India that gives access to MSME schemes and protections. Read more →
V
- Venture capital
- Equity investment in young, high-growth companies by professional funds, in exchange for an ownership stake. Read more →
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