35 Critical Business Terms

Practicing the Language of Business & Money

EPISODE 05 – February 18, 2017

This episode of the podcast is formatted differently than any previous episodes. Earlier this week, I was having a conversation with some respected businessmen. During that conversation I noticed a big difference in the way they spoke, specifically in the terminology they were using. It was like they were speaking a different language.

They were speaking a different language. They were speaking the language of business. The language of business is also the language of money.

It was clear, this was terminology I needed to know so I can speak the same language. I did my research and started studying what I thought were the most critical business terms I needed to engrain in my head.

As I was doing this, I remembered that usually whatever knowledge I find valuable, a million other people will find valuable as well. I turned on my mic on and made these definitions available to everyone who also want to better speak the language of business and money.

Listen to the 35 critical business terms everyone should know here, in Episode 05:

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Here are the business terms written out that I cover in episode 05 of The KNP:

Affiliate Marketing: The process in which an individual or company promotes a product or service in return for a commission. The commission is received only when a customer makes a purchase as a result of the affiliate’s  promotion.   

Angel Investor: An individual who invests their personal capital directly in new businesses or start-ups and gets equity in return. So, if you need cash to take your business to the next level, you’ll look to find an Angel Investor with whom you can trade a percentage of your company for a monetary investment.

Assets: Assets are the property or equipment purchased for business use and have monetary value.

Business Model: A proposed design for the successful operation of a business and how it will become profitable. The business model can include revenue, as well as all expenses. Businesses often create a business model to present to potential investors.

Cash flow: The amount of cash moving into and out of a business. If a business is successful, the inflow of cash will be greater than the outflow. This is known as “positive cash flow”.

C Corporation: A type of business that is taxed separately from its owners. As opposed to an S Corporation which taxes its owners personally.

Costs of Goods Sold (COGS): The cost of goods sold is the total amount of expenses that are necessary in order to make a product. These expenses can include cost of labor, cost of materials and taxes.

Due Diligence: Researching specific facts of a business related to a potential investment to make sure everything is in order before entering into an agreement with another party.

Fixed Cost: The total of all expenses required for a company to operate on a weekly, monthly or yearly basis. For example, salary and rent are fixed costs.

Franchise: A franchise is a large business with multiple locations that can each be purchased by individuals. For example, each McDonald’s location in the United States is independently owned by a franchisee under the McDonald’s name.

Fringe Benefits: Benefits provided by an employer to its employees in addition to their standard salaries. For example, health insurance or access to a company vehicle are fringe benefits.