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Business Terms Glossary

Glossary of Terms

This glossary serves as a guide to help you become familiar with the terminology used within the MOBI Curriculum

TERM  DEFINITION ASSOCIATED SECTION(S)
Accrual

The method of accounting in which you match revenue with expense regardless of when the cash may or may not be collected.

Basic Accounting for Small Businesses 
Alt Tags

A means for creating text for images by describing in words what a picture depicts.

Small Business E-Commerce: Starting Your Business 
ASAP

As Soon As Possible

 
Balance Sheet

A “point-in-time” snapshot listing all of your assets as well as your liabilities.

Basic Accounting for Small Businesses  
Bank Account Reconciliation

Comparing and matching your checkbook balance with your bank balance.

Basic Accounting for Small Businesses 
Board of Equalization

Agency of the government that is responsible for functions related to taxation.

Licenses & Permits for Small Businesses 
Business License

Just about all businesses require a business license – check for local, county, state or federal requirements.

Licenses & Permits for Small Businesses 
Business Model

A method of how a company generates revenue.

How To Write A Business Plan 
Business Plan

A written outline that evaluates all aspects of your business.

Licenses & Permits for Small Businesses
Business Profile

A concise definition and description of your intended business, and how you plan to go about it.

How To Write A Business Plan
CAM

Common Area Maintenance expenses which are assessed to tenants.

Choosing A Business Location to Start A Business 
Capital

The funds and assets invested in a business by the owners.

How to distribute business earnings 

VIDEO: Raising Capital for Your Small Business

Capitalization Rate

The desired return (profile) you desire to determine the valuation of a business, expressed as a percentage return on your investment.

How to buy a business or franchise 
Cash Basis of Accounting

Method of accounting in which you recognize income when you receive the cash, and expense when you receive the bill.

Basic Accounting for Small Businesses 
Cash Flow Control

A simple method of projecting your future needs for cash.

 

Financial controls for a small business 

Category Killer

Large discount chains with powerful buying power and efficiencies of scale.

Small Business Start-Up & Marketing Strategies 
Certificate of Insurance

Your landlord will require you to furnish this as proof of your insurance coverage.

Insurance small businesses need 
Commodity Business

A business for which you must have the lowest cost to survive.

Choosing A Business: Starting Your Business 
Compounding

The ability of an asset to generate earnings which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous earnings. (Interest is added to principal so that the interest that has been added also earns interest).

How to Start a Home-Based Business 

How to control expenses in a small business

Current Liability

A debt due in less than 12 months.

Basic Accounting for Small Businesses 
Deal Point

A non-negotiable condition; no transaction can be closed without including it.

How to Negotiate 
Demographic Report

Population statistics based on U.S. census data.

Small Business Start-Up & Marketing Strategies 
Depreciation

A non-cash expense of doing business (such as recording that assets are going down in value over time)

Basic Accounting for Small Businesses 
Domain Name

The unique name that identifies you to all the other computers on the Internet. (Your website name.)

Small Business E-Commerce: Starting Your Business 
Due Diligence

The overall process of evaluating a business opportunity including examination of financial records.

How to buy a business or franchise 
EA

“Enrolled Agent”: Type of accountant who must pass a taxation test administered by the I.R.S. 

Basic Accounting for Small Businesses 
eBay

The largest of the online auction houses.

Small Business E-Commerce: Starting Your Business 
E-commerce

The sale of products and services over the Internet.

Small Business E-Commerce: Starting Your Business 

How to build a website for your small business

EIN

Employee Identification number – allows you to identify your business on important government forms and official documents. 

Licenses & Permits for Small Businesses 
Entrepreneur

One who organizes, operates, and assumes the risk in a business. 

Choosing A Business: Starting Your Business 
Equity

An ownership interest in a business.

Small Business Financing & Startup Costs 
ESOP

Employee Stock Ownership Plan – a tax qualified employee benefit plan that invests in the stock of the employer. 

Selling A Business: Expanding Your Business 
Estoppel Certificate

Your lease document will provide that you agree (now and in the future) to verify the terms of your lease. 

Choosing A Business Location to Start A Business 
FAQ

Frequently asked questions. 

 
FICO

FICO is a numeric number, using 3 digits, to predict your credit score. You can obtain your FICO score online. Generally, a FICO score above 680 will produce a positive response from a lender.

Small Business Financing & Startup Costs 
Goodwill

The value of a company’s reputation which gives it a competitive edge and earning power. An intangible asset of a business derived from the perceived value of the business’ assets.

Selling A Business: Expanding Your Business 
Hollow Corporation

A business in which important elements are outsourced to subcontractors.

Choosing A Business: Starting Your Business 

International Expansion: Expanding Your Business

HR Department

Human Resources Department including payroll functions and training. 

How to hire employees for a new business 
HTML 

Hypertext Markup Language: the common language of the Internet.

How to build a website for your small business 
Income Statement

Also known as “profit and loss statement”. Shows income and expenses and resulting profit or low over a specified period of time.

Basic Accounting for Small Businesses 
Independent Contractor

Someone who is retained to perform a certain act but who is not an employee. An independent contractor pays all their own expenses, taxes and receives no employee benefits.

How to hire employees for a new business 
Internal Controls

What is needed to avoid losses in the handling of funds: either cash, checks, or credit cards. 

Financial controls for a small business 
Intrinsic Valuation

The value of a business based on a mathematical calculation which converts all estimated future earnings to their present value.

Selling A Business: Expanding Your Business 
IPO

Initial Public Offering (the first public issuance of stock in a company).

How to go public with a business 
IRA or 401 (k)

Individual Retirement Accounts: Wonderful tools for your retirement planning.

New Business Organization & Partnerships 
Just-In-Time

The controlling of inventory so that materials are delivered just-in-time for assembly or manufacture.

Small Business Start-Up & Marketing Strategies 
Links

Links to and from other websites help create more ways for people to arrive at your website. The World Wide Web refers to the web these links create. 

Small Business E-Commerce: Starting Your Business 
Liability Insurance

Insurance for damage or loss that may be caused by the policyholder on another person in form of bodily injury or property damage.

Insurance small businesses need 
Liquidity

Money in the bank i.e. sufficient cash to pay your bills and payroll on time.

Basic Accounting for Small Businesses 

How to go public with a business

Meta Tags

Information inserted into the “head area” of your web pages. 

 
Moonlighting

Operating a business while still employed. “In the moonlight” - a part-time business. 

How to Start a Home-Based Business 
Options

Most commonly refers to a legal right to convey a property 

Choosing A Business Location to Start A Business 
Outsourcing

The practice of using subcontractors rather than paid employees.

Business Vertical Integration & Business Expansion 
Payroll Service Provider

An outside resource to take over payroll and other employee-related functions.

How to hire employees for a new business 
PDA

Personal Digital Assistant: handheld computers. 

Communications & Technology For Small Business 
Percentage Rent

A rental charge that is based on a percentage of your sales.

Choosing A Business Location to Start A Business 
Pilot Operation

A small-scale operation to evaluate and test the merits of a business concept. 

How To Grow Your Business: Starting Your Business 

How to grow a business by duplication

Pricing Power

Unique qualities that enable maintenance of profitable pricing. 

How to negotiate 
Profit Center

A unit of a business that can be compartmentalized financially such as an individual store within a chain. 

How To Grow Your Business: Starting Your Business 
Retained Earnings The cumulative result of a firms’ operation from startup through current operating statement earnings that have stayed in the business rather than being taken out. The net profit after taxes, that is retained in the business as working capital. 

How to distribute business earnings 

VIDEO: Investing Retained Earnings

SBA

The U.S. Small Business Administration. The federal government agency that guarantees loans made by banks to small businesses.

Basic Accounting for Small Businesses 
S.C.O.R.E.

Service Corps of Retired Executives - A non-profit association dedicated to entrepreneurs, education, and success of small business. (A part of SBA)

Basic Accounting for Small Businesses 

BLOG: Five Key Questions About Funding Your New Business

Search Engine

Search engines provide directories to help locate information on the Internet.

Small Business E-Commerce: Starting Your Business 
Search Engine Placement

Enhancement methods used to improve website rankings on search engines

Small Business E-Commerce: Starting Your Business 
Secured Credit

Loans secured by the assets of your business or your personal assets or both.

Small Business Financing & Startup Costs 
Sellers Permit

Certificate of resale – this permit lets you collect sales tax from your customers which you, in turn, pay to the state. It is different from a business license.

Licenses & Permits for Small Businesses 
Server

A computer system providing access to information or websites.

Small Business E-Commerce: Starting Your Business 

How to build a website for your small business

Shrinkage

Loss of goods through shoplifting and other types of stealing.

How To Grow Your Business: Starting Your Business 
Site Criteria

Factors making up the overall and objective evaluation of a location for a specific business. 

Choosing A Business Location to Start A Business 
Unsecured Credit

Loans for which there is no collateral granted to the lender.

Small Business Financing & Startup Costs 
Voice Mail

A low-cost phone answering service provided by telephone companies that is more business-like than an answering machine.

Communications & Technology For Small Business