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Business Dictionary

Business jargon, explained simply.

CAC, CTC, CPA, P&L, ROAS and hundreds more — plain-language definitions with examples and formulas, available in multiple languages.

151 terms
A/B Testing
Marketing

Showing two versions to different halves of your audience to see which performs better, instead of guessing.

ACV
Annual Contract Value
Sales

The average yearly value of a single customer contract, useful when deals run for multiple years.

AOV
Average Order Value
Marketing

The average amount a customer spends in a single purchase.

AOV = Total Revenue ÷ Number of Orders
ARPU
Average Revenue Per User
Growth

On average, how much money each user brings in over a period.

ARPU = Total Revenue ÷ Number of Users
ARR
वार्षिक आवर्ती आय
Sales

आपकी आवर्ती सदस्यता आय का सालाना मूल्य — MRR को बारह से गुणा करने पर।

ARR = MRR × 12
Accounts Payable
Finance

Money your business owes to suppliers for things already received but not yet paid for.

Accounts Receivable
Finance

Money customers owe you for work already delivered but not yet paid for. It counts as revenue, but you cannot spend it until it actually arrives.

Activation
Product

The moment a new user first experiences real value from your product — the "aha" that makes them likely to stick around.

Angel Investor
Fundraising

An individual who invests their own money into very early startups, usually in smaller amounts than a fund.

Attribution
Marketing

Deciding which marketing effort deserves credit for a sale when the customer saw several before buying.

B2B / B2C
Business-to-Business / Business-to-Consumer
General

Who you sell to: B2B means selling to other businesses; B2C means selling directly to everyday consumers.

Backlog
Product

The running list of everything you might build, ordered by priority but not yet scheduled.

Balance Sheet
Finance

A snapshot of what the business owns and owes on a single date. What you own minus what you owe is what the business is worth on paper.

Bootstrapping
General

Growing a company using your own money and revenue instead of raising from investors. Slower, but you keep full ownership and control.

Bottleneck
Operations

The single slowest step that limits how fast the whole process can go. Speeding up anything else changes nothing until you fix it.

Bounce Rate
Marketing

The share of visitors who land on your page and leave without clicking anything. High bounce usually means the page did not match what they expected.

Bounce Rate = Visitors Who Leave Without Interacting ÷ Total Visitors × 100
Brand Awareness
Marketing

How many people know your brand exists and recognise it. Hard to measure directly, but it makes every other marketing effort cheaper.

Break-even
Finance

The point where your revenue exactly covers your costs — no profit, no loss. After this, you start making money.

Bridge Round
Fundraising

A smaller, quick raise to give you more runway to reach the next big milestone. A "down round" is a raise at a lower valuation than before.

Burn Rate
बर्न रेट
Finance

मुनाफ़े में आने से पहले आपकी कंपनी हर महीने (कमाई से ज़्यादा) कितनी नकदी खर्च करती है।

Net Burn = Cash Spent − Cash Earned (per month)
CAC
ग्राहक अधिग्रहण लागत
Marketing

एक नया भुगतान करने वाला ग्राहक पाने के लिए औसतन कितना खर्च होता है — आपकी कुल मार्केटिंग और बिक्री लागत को नए ग्राहकों की संख्या से भाग देने पर।

CAC = Total Sales & Marketing Spend ÷ New Customers Acquired
CAC Payback Period
Finance

How long it takes to earn back the money you spent acquiring a customer. Shorter is better — you recover cash faster.

Payback (months) = CAC ÷ Monthly Gross Profit per Customer
COGS
Cost of Goods Sold
Finance

The direct cost of producing what you sell — materials, manufacturing, delivery. Not overheads like rent or salaries of non-production staff.

CPA
Cost Per Acquisition
Marketing

What it costs, on average, for one desired action from an ad — like a sign-up, download or sale. Similar to CAC but usually measured per campaign or action.

CPA = Ad Spend ÷ Number of Conversions
CPC
Cost Per Click
Marketing

How much you pay each time someone clicks your ad.

CPC = Ad Spend ÷ Number of Clicks
CPL
Cost Per Lead
Marketing

What you pay, on average, to get one potential customer (a lead) to show interest — before they actually buy.

CPL = Marketing Spend ÷ Number of Leads
CPM
Cost Per Mille (per 1,000 impressions)
Marketing

The cost to show your ad 1,000 times. Used when the goal is visibility rather than clicks.

CPM = (Ad Spend ÷ Impressions) × 1,000
CRM
Customer Relationship Management
Sales

The software where you track every customer and deal — who you spoke to, what was said, and what happens next.

CTC
Cost To Company
Operations

The total a company spends on an employee in a year — not just salary, but bonuses, benefits, PF and other perks added together. It's usually more than the take-home pay.

CTR
Click-Through Rate
Marketing

The share of people who click your ad or link after seeing it. A quick read on how compelling it is.

CTR = (Clicks ÷ Impressions) × 100
Cap Table
Fundraising

A list of everyone who owns a piece of the company — founders, investors, employees with options — and how much each holds.

CapEx / OpEx
Capital Expenditure / Operating Expenditure
Finance

CapEx is money spent on things you keep for years, like machines or laptops. OpEx is the day-to-day running cost, like salaries and rent.

Capacity
Operations

The maximum your team or setup can handle before quality drops or things break.

Cash Flow
Finance

The actual money moving in and out of your business. You can be profitable on paper but still run out of cash if money comes in late.

Churn
चर्न
Growth

किसी अवधि में आप कितने प्रतिशत ग्राहक (या आय) खो देते हैं। ज़्यादा चर्न यानी लोग लगातार छोड़ रहे हैं।

Churn Rate = Customers Lost ÷ Customers at Start × 100
Cohort
Growth

A group of users who started at the same time, tracked together so you can see how behaviour changes over their lifetime.

Compliance
Legal

Keeping up with the filings, taxes and rules your business is legally required to follow. Boring until you skip it, then expensive.

Conversion Rate
Marketing

The share of people who take the action you want — sign up, buy, subscribe — out of everyone who had the chance.

Conversion Rate = (Conversions ÷ Visitors) × 100
Convertible Note
Fundraising

A loan from an investor that later converts into shares instead of being paid back in cash — often with a discount as a reward for investing early.

Copyright
Legal

Automatic ownership of original creative work you produce — writing, code, designs, video. You get it the moment you create it; registration just makes it easier to prove.

Cross-sell
Sales

Selling an existing customer a different product alongside what they already bought.

DAU / MAU
Daily / Monthly Active Users
Product

How many unique people use your product each day (DAU) and each month (MAU). Their ratio shows how "sticky" — habit-forming — the product is.

Stickiness = DAU ÷ MAU × 100
DSO
Days Sales Outstanding
Finance

The average number of days customers take to pay you. High DSO means profitable on paper but short of cash in reality.

DSO = Accounts Receivable ÷ Total Credit Sales × Number of Days
Deal Size
Sales

How much revenue a typical closed deal brings in. Bigger deals justify more sales effort per customer.

Depreciation
Finance

Spreading the cost of something expensive across the years you use it, instead of counting it all in the month you bought it.

Dilution
Fundraising

When new shares are issued (to investors or employees), each existing owner's percentage of the company shrinks — even though the company is usually worth more overall.

Down Round
Fundraising

Raising money at a lower valuation than your previous round. Painful for existing shareholders, but often better than running out of cash.

Due Diligence
Legal

The investigation an investor or buyer runs before committing money — checking your books, contracts, cap table and legal filings for surprises.

EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization
Finance

A measure of a company's core operating profit, before accounting effects like interest, tax and asset write-downs. It shows how the business does at its heart.

ESOP
Employee Stock Ownership Plan
Fundraising

A pool of shares set aside to give employees ownership in the company, usually earned over time. A key way startups attract talent without huge salaries.

Engagement Rate
Marketing

The share of people who actually did something with your content — liked, commented, shared or clicked — rather than scrolling past.

Engagement Rate = Interactions ÷ Impressions × 100
Equity
General

Ownership in a company, held as shares. If you own 10% of the equity, you own 10% of whatever the company is eventually worth.

Exit
Fundraising

The event where shareholders finally turn their shares into cash — usually the company being acquired or going public.

Expansion Revenue
Growth

Extra money earned from customers you already have, by upgrading them or selling them more.

Fixed vs Variable Cost
Finance

Fixed costs stay the same no matter how much you sell, like rent. Variable costs rise with each sale, like packaging and delivery.

Founders’ Agreement
Legal

A written agreement between co-founders covering who owns how much, who does what, and what happens if someone leaves. Signed early, while everyone still agrees.

Freemium
General

Giving a useful version away free and charging for advanced features. Works only when the free tier is cheap to serve and the paid one is genuinely worth it.

Fulfilment
Operations

Everything that happens after a customer places an order: picking the item, packing it, shipping it and handling returns.

Funnel
Marketing

The step-by-step journey people take from first hearing about you to becoming a customer. It narrows at each step, like a funnel.

GMV
Gross Merchandise Value
General

The total value of everything sold through your platform before your own cut or costs. Common for marketplaces.

GST
Goods and Services Tax
Legal

India’s tax on the sale of goods and services. Once your turnover crosses the threshold you must register, charge it on invoices, and file returns.

GTM
Go-To-Market
Sales

Your plan for reaching customers and getting them to buy — which channels, messaging, pricing and sales approach you use.

Gross Margin
Finance

The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.

Gross Margin = (Revenue − COGS) ÷ Revenue × 100
ICP
Ideal Customer Profile
Sales

A clear description of the exact type of customer who benefits most from your product and is easiest to sell to and keep.

Impressions
Marketing

How many times your ad or post was displayed. One person seeing it five times counts as five impressions.

Incorporation
Legal

The legal act of registering your business with the government so it exists as its own entity. Until you incorporate, you and the business are the same thing in the eyes of the law.

Incubator / Accelerator
General

Programmes that support early startups with mentorship, workspace and sometimes money. Accelerators run for a fixed period and usually take equity.

Intellectual Property
Legal

Things your business created that it legally owns even though you cannot touch them — your code, brand name, designs and inventions.

Inventory
Operations

The goods you are holding and have not sold yet. It is cash sitting on a shelf — too little and you miss sales, too much and you are broke but full of stock.

Invoice
Finance

The formal bill you send a customer listing what they bought and when payment is due.

Just-in-Time
Operations

Ordering stock only as you need it instead of holding large amounts. Frees up cash but leaves no cushion if a supplier is late.

KPI
Key Performance Indicator
General

A key number you track to know whether you are succeeding at something important.

LLP
Limited Liability Partnership
Legal

A business structure where partners share ownership but are not personally responsible for the business debts. Cheaper to run than a company, but you cannot issue shares to investors.

LTV
लाइफटाइम वैल्यू
Growth

एक ग्राहक से पूरे रिश्ते के दौरान आपको जितनी कुल कमाई की उम्मीद है।

LTV = Average Revenue per Customer × Average Customer Lifespan
LTV:CAC Ratio
Growth

How much a customer is worth compared with what it cost to get them. Investors like to see this at 3× or higher.

LTV:CAC = Lifetime Value ÷ Customer Acquisition Cost
Landing Page
Marketing

A single focused page a visitor arrives at from an ad or link, built to get them to do one specific thing.

Lead
Sales

A person or company that has shown some interest and might become a customer.

Lead Investor
Fundraising

The investor who sets the terms and puts in the largest share of a round. Others usually follow once a lead commits.

Lead Time
Operations

How long it takes from placing an order to actually receiving it. Longer lead times force you to hold more stock.

Liquidation Preference
Fundraising

A term that decides who gets paid first (and how much) if the company is sold. A "1× preference" means investors get their money back before founders see anything.

Logistics
Operations

The moving and storing of goods — warehousing, transport and delivery to the customer.

MQL / SQL
Marketing Qualified Lead / Sales Qualified Lead
Sales

An MQL looks interested based on their behaviour. An SQL has been spoken to and genuinely has the need, budget and authority to buy.

MRR
मासिक आवर्ती आय
Sales

सदस्यता (subscription) वाले व्यवसाय की हर महीने मिलने वाली निश्चित आय।

MRR = Number of Customers × Average Monthly Subscription
MVP
Minimum Viable Product
Product

The smallest version of your product that still delivers value, built quickly so you can learn from real users before investing more.

Marketplace
General

A business that connects two groups — buyers and sellers — and takes a cut, without owning the inventory itself.

MoA / AoA
Memorandum and Articles of Association
Legal

The two founding documents of a company. The MoA says what the company is allowed to do; the AoA says how it will be run internally.

MoU
Memorandum of Understanding
Legal

A written statement that two parties intend to work together. It records the plan but is usually not fully binding on its own.

Moat
General

A lasting advantage that makes it hard for competitors to copy or beat you — like a strong brand, network effects, or unique technology.

NDA
Non-Disclosure Agreement
Legal

A contract where two sides promise to keep shared information secret. Common before sharing sensitive plans or code.

NPS
Net Promoter Score
Product

A simple loyalty score from −100 to +100 based on one question: "How likely are you to recommend us?" Higher means happier customers.

NPS = % Promoters − % Detractors
NRR
Net Revenue Retention
Growth

How much revenue you keep from existing customers after upgrades and cancellations. Above 100% means you grow even with zero new customers.

NRR = (Starting Revenue + Expansion − Churn) ÷ Starting Revenue × 100
Net Margin
Finance

The percentage of revenue you actually keep after every single cost, including tax and interest. The true bottom line.

Net Margin = Net Profit ÷ Revenue × 100
Network Effect
Growth

When your product becomes more valuable to each user as more people join.

Non-Compete
Legal

A clause stopping someone from joining or starting a competing business for a set period after they leave.

North Star Metric
Product

The single number that best captures the value your product delivers — the one metric the whole team rallies around.

OKR
Objectives and Key Results
General

A goal-setting method: an ambitious Objective plus a few measurable Key Results that show whether you achieved it.

Onboarding
Product

The first-run experience that takes someone from signing up to actually using the product successfully.

Operating Margin
Finance

What percentage of revenue is left after paying both the cost of the product and the cost of running the business.

Operating Margin = Operating Profit ÷ Revenue × 100
P&L
लाभ-हानि विवरण
Finance

एक अवधि की आय और खर्च का सारांश, जो बताता है कि लाभ हुआ या हानि। इसे आय विवरण भी कहते हैं।

Patent
Legal

Exclusive legal rights over an invention for a fixed number of years, in exchange for publishing how it works.

Pitch Deck
Fundraising

The short slide presentation used to explain your business to investors — problem, solution, market, traction, team and ask.

Pivot
General

Changing a fundamental part of your business — the product, the customer or the model — because the evidence says the current one is not working.

Pre-money / Post-money
Fundraising

Pre-money is what your company is valued at before the new investment; post-money is that plus the money coming in. The difference decides how much of the company the investor gets.

Post-money Valuation = Pre-money Valuation + Investment Amount
Private Limited Company
Legal

The most common company structure for Indian startups. The company is legally separate from its founders, so business debts stay with the business, and it can issue shares to investors.

Procurement
Operations

The process of finding suppliers and buying what your business needs, at the right price and quality.

Product-Market Fit
Product

The degree to which a product satisfies strong market demand — usually signalled by high retention and users who would be very disappointed without it.

Product-Market Fit
प्रोडक्ट-मार्केट फ़िट
Product

वह स्थिति जब आपने किसी बाज़ार की सच्ची ज़रूरत पूरी करने वाला उत्पाद बना लिया हो — मज़बूत रिटेंशन इसका संकेत है।

Prototype
Product

A rough, non-working version of an idea used to get feedback before anyone writes real code.

Quality Assurance
Operations

Checking work before it reaches the customer, so problems are caught internally rather than in a review.

ROAS
विज्ञापन खर्च पर रिटर्न
Marketing

विज्ञापन पर खर्च किए हर रुपये से कितनी आय वापस आती है। ROAS 4 का मतलब ₹1 पर ₹4 कमाई।

ROAS = Revenue From Ads ÷ Ad Spend
ROI
निवेश पर रिटर्न
Finance

किसी चीज़ पर आपने जितना खर्च किया, उसके मुकाबले कितना फ़ायदा (या नुकसान) हुआ — प्रतिशत में।

ROI = (Gain − Cost) ÷ Cost × 100
Reach
Marketing

How many different people saw your content, counting each person once no matter how often they saw it.

Referral
Growth

A new customer who came because an existing one recommended you. Usually your cheapest and highest-quality source of growth.

Retargeting
Marketing

Showing ads specifically to people who already visited your site but did not buy.

Retention
Growth

The share of customers who keep using your product over time. The opposite of churn — high retention is a sign of a product people love.

Roadmap
Product

The plan of what you intend to build and roughly when. A direction, not a promise.

Runway
रनवे
Finance

मौजूदा खर्च की रफ्तार पर पैसा खत्म होने से पहले आप कितने महीने चला सकते हैं।

Runway (months) = Cash in Bank ÷ Monthly Burn
SAFE
Simple Agreement for Future Equity
Fundraising

A simple fundraising contract where an investor gives you money now in exchange for shares later, usually at your next priced round. Quick and founder-friendly.

SEO
Search Engine Optimization
Marketing

Improving your website so it ranks higher in unpaid Google/search results, bringing free traffic over time.

SLA
Service Level Agreement
Operations

A promise to a customer about the level of service they will get — response time, uptime, delivery speed — often with penalties if you miss it.

SOP
Standard Operating Procedure
Operations

A written step-by-step guide for a repeated task, so anyone on the team does it the same way without asking.

SaaS
Software as a Service
General

Software you use over the internet for a recurring subscription instead of buying and installing it once.

Sales Cycle
Sales

How long it takes on average from first contact to a signed deal. Longer cycles mean you need more cash to survive the wait.

Sales Pipeline
Sales

All the potential deals you are currently working on, organised by how close each is to closing.

Scalability
General

Whether you can serve many more customers without your costs or effort rising just as fast.

Seed Round
Fundraising

Usually the first meaningful outside money, raised to find product-market fit rather than to scale.

Series A
Fundraising

The round after seed, raised once you have proof the model works and want to scale it. Investors expect real numbers, not just a story.

Shareholders’ Agreement
Legal

The binding contract signed when investors put money in. It turns the promises in the term sheet into enforceable rights about voting, board seats and selling shares.

Sprint
Product

A short fixed period, usually one or two weeks, in which the team commits to finishing a specific set of work.

Stickiness
Growth

How often your monthly users come back within the month. A high ratio means the product is part of their routine.

Stickiness = DAU ÷ MAU × 100
Subscription
General

Charging a repeating fee for ongoing access instead of a one-time price. Predictable revenue, but you must keep earning it every month.

Supply Chain
Operations

Everything it takes to get a product from raw material to your customer’s hands — suppliers, manufacturing, storage and delivery.

TAM / SAM / SOM
Total / Serviceable / Serviceable-Obtainable Market
General

Three sizes of your market: TAM = everyone who could ever buy; SAM = the slice you can actually serve; SOM = the realistic share you can win soon.

Technical Debt
Product

Shortcuts taken to ship faster that make future changes slower. Like a loan — fine briefly, expensive if never repaid.

Term Sheet
Fundraising

A short, mostly non-binding document that lays out the key terms of an investment before the full legal paperwork is drawn up.

Throughput
Operations

How much work actually gets completed in a period — orders shipped per day, tickets closed per hour.

Time to Value
Growth

How long a new user takes to get their first real benefit. The longer it takes, the more people give up first.

Traction
General

Evidence that people actually want what you built — growing users, revenue or usage. The thing investors look for before anything else.

Trademark
Legal

Legal protection for your brand name and logo, so competitors cannot trade under a confusingly similar identity.

Turnaround Time
Operations

How long you take to finish a task from the moment it arrives — a support ticket, a repair, an order.

Unit Economics
Finance

The profit or loss from a single customer or sale. If each unit loses money, growing faster just loses money faster.

Upsell
Sales

Getting an existing customer to spend more — by upgrading to a higher plan or adding features.

User Persona
Product

A short profile of a typical user — their job, goals and frustrations — used to keep decisions grounded in a real person.

User Story
Product

A feature written from the user’s point of view, describing what they want and why, rather than how to build it.

Valuation
Fundraising

How much your company is judged to be worth. 'Pre-money' is the value before new investment; 'post-money' is pre-money plus the money raised.

Vendor
Operations

Any outside company you buy goods or services from to run your business.

Venture Capital
Fundraising

Firms that invest other people’s money into high-growth startups in exchange for equity, expecting a small number of large wins.

Vesting
Fundraising

Earning your shares or options gradually over time, so you have to stay to fully own them. A "cliff" means you earn nothing until a first milestone (often one year).

Virality (K-factor)
Growth

How much your users bring in new users by themselves. A K-factor above 1 means each user brings more than one new user — organic, self-fuelling growth.

K-factor = Invites Sent per User × Invite Conversion Rate
Win Rate
Sales

The share of deals you actually close out of every deal you seriously pursued.

Win Rate = Deals Won ÷ Total Deals Closed × 100
Working Capital
Finance

The short-term money available to run day-to-day operations — what you own that can quickly become cash, minus what you owe soon.

Working Capital = Current Assets − Current Liabilities