Must Know Terms for Every Entrepreneur or Startup Enthusiast
Thinking of venturing into entrepreneurship? Then these terms are definitely a must know before starting your aspirational journey.
Before commencing your aspirational journey called 'entrepreneurship', here are a few words that you must know.
Acquisition: It refers to a corporate action wherein a company buys controlling stake in another through either purchasing of its shares or assets.
Angel Investor: Investors or affluent individuals who provide financial assistance to startups to initiate their business in exchange of either equity or convertible debt.
Articles of Association: It is a document that consists of internal rules set forth by any incorporated organisation, forming one half of the company's constitution. It constitutes the rights and duties of the directors and stockholders along with the activity undertaken by the business.
Asset: A resource owned by the corporation with economic value or benefit.
Audit: An objective inspection and evaluation of a company's books of records, transaction data and other relevant documents to ensure fair and accurate representation of transactional claims by the company.
Balance Sheet: A financial summarisation on the form of a statement consisting of an entity's assets, liabilities and owner's equity.
Board of Directors: Group of individuals or elected representatives who govern the firm and it's activities.
Bootstrap Financing: The use of an entrepreneur’s personal resources or unused opportunities within the company to raise capital for various business requirements.
Branding: It is a marketing concept involving creation of name, symbol or design that distinguishes between two products or services.
Business Model: A plan created for an entity highlighting its revenue making scheme or profit yielding strategy.
Business Plan: It is a formal statement comprising of business goals, means of achieving those goals and functional strategies that would assist in achieving them.
Capital: Monetary resources available for utilisation.
Collateral: Property or other assets pledged as a security to attain a loan.
Competitive Advantage: A situation or a concept wherein a firm has an advantage over its competitors on various factors, thus allowing for greater sales, margins or more customer preference relative to its competition.
Conglomerate: A large company comprising of multiple corporations providing varied products and services.
Corporate Governance: A framework comprising of rules, processes and practices through which a company ensures fairness, accountability and transparency to all its stakeholders.
Corporate Identity: It refers to a combination of designs, colours and words used by a business to create a visual picture in the minds of the customers to suggest the message or philosophy it follows.
Corporate Image: It is the overall image or perception of a company in the minds of its various stakeholders.
Debenture: It is a debt instrument used by large organisations in the medium or long run to borrow money at a fixed interest rate.
Debt: It is an amount owed by an individual or a corporation for borrowed funds.
Depreciation: A decrease in the value of an asset over time.
Diversification: A corporate strategy of spreading investments in newer markets.
Dividend: A sum of money paid by a company to its shareholders from its profits or revenues.
Entrepreneur: An individual who initiates a business and assumes all associated risks attached with it.
Equity: It is the difference between the value of asset and liability.
Funds: An amount of money required for a business endeavour.
Goodwill: It refers to an intangible asset arising out of the acquisition of one entity by another for a premium value. It could be a brand name, good customer or employee relations, patents and so on.
Incubator: An organisation that assists new ventures succeed by providing seed funding, mentoring and strategic inputs.
Inventory Management: It is the activity of supervising and maintaining optimum levels of inventory or stocks.
IPO: Initial public offering is the process by which a private company turns public through
Sale of its stocks to the general public.
Liquidation: The process of dissolving a company in order to discharge its liabilities through sale of its assets.
Logistics: It is the management of flow of goods from the point of origin to the point of consumption in order to meet customers’ requirements.
Logo: Graphic or visual design reprinting a company, product or a service.
Marketing: It is a management concept pertaining to all activities undertaken to communicate the value of a company's products or a services to its customers.
Memorandum of Association: A governing document regulating external activities and also defines the relationship with the various shareholders. It is prepared in the formation and incorporation stage and provides information ranging from shareholder details, registered office location amongst others.
Merger: Combining of two companies to form a new company so as to integrate their individual resources & capabilities to build a bigger competitive advantage.
Monopoly: A market situation wherein a single company or producer owns all or almost all of market for a particular product or a service and is often characterised by lack of competitors offering the same product/service.
Organisational behaviour: A study of dynamics involving individual or group performance and their activities in an organisational setting. It could be at micro level (individuals), meso level (work groups) or macro level (organisations).
Organisational structure: It is a hierarchical structure representing people and their functions within the organisation.
Patents: It refers to a type of protection that provides an individual or an entity with making, utilising or selling an idea or invention for a particular time frame.
Payroll: It is the sum total of the amount to be paid in the form of compensation by the company to its employees on a given date.
Portfolio: It is a collection of all of the company's products/services, activities and achievements.
Profit: It is the surplus generated post the deduction of total expenses/costs from total revenue.
Profit and Loss account: It is a financial statement summarising the revenues, costs and expenses incurred during a specific time frame.
Recruitment: It is a human resource activity of stimulating prospective employees for various positions or job vacancies in an organisation.
Registrar of Companies: A government agency that records details of existing and new companies and foresees adherence of a business entity to Companies Act.
Revenue: It is the total amount of money or income made by a company through sale of its products or services in a period of time.
Shares: It is a representation of a unit of ownership in a corporation.
Stakeholder: An individual, body or organisation that has an interest or concern over a enterprise. Prominent stakeholders for business include Investors, Government, Customers, Employees, Suppliers and Community.
Startup: An entity in its early stages of operations.
Stock: A company share owned by an individual or a group and such individuals or groups are bestowed with ownership rights in the company.
SWOT Analysis: A structured tool used for evaluation of an organisation's strengths, weakness, opportunities and threats based on internal and external factors.
Takeover: It is the purchase of one company by another and the acquiring company then is in complete control of the target company's operations.
Trademarks: A word , symbol, design, sign representing a brand or a particular product/service that is legally registered for protection by its owner to deny unauthorised usage to others.
Trend Analysis: Process of comparing historical data over time to identify any consistent result that would assist in future speculations.
Turnover: It refers to the amount of sales or business generated by a company in a specific time period.
Valuation: The process of evaluating the estimated worth of an asset or a corporation.
Venture Capital: Private Investors who provide capital assistance to startup ventures or small businesses to carry out various venture activities or for expansion purposes with expectation of substantial returns on their investment.
Any other term you would like to add to the above list? Do let me know.