business terms glossary
Online Business

GLOSSARY: Essential Business Terms to Know

I have decided to create a glossary on my website to define business, marketing and accounting terms, as well as anything else I will potentially need to explain. My explanations are simple and straightforward. Feel free to email me, if you would like me to include any other terms not listed below.


A/B testing: is a process to determine which page, version of the page or creative idea converts better under current conditions. The idea is to split traffic between two options, to determine which one is a winner and can bring more profits to the business.

Accounts receivable: is the money to be received by the business for selling goods or providing services.  Accounts receivable is included on a company’s balance sheet under the assumption that money will arrive soon.


Balance sheet: this represents a snapshot of the business’s financial position, including all assets and liabilities.

Bounce rate: is the percentage of website visitors who land on the page and then leave immediately without clicking on any links. High bounce rate indicates poor conversion rate. You can see your bounce rate in Google Analytics.

B2B: stands for business to business and describes a business relationship between two businesses, rather than business and consumer. For example, a wholesaler and a retail shop.

B2C: stands for business to consumer and defines businesses that supply products and services directly to consumers. For example, a retail shop, online gift store or dog washing service.


Cash flow: the total amount of money transferred to and from the business during a specific accounting period. Cash may come from sales, investments, dividends or the sale of assets.  This includes what the business pays for operating expenses and any other expenses (including debt and the purchase of assets).

CMS: stands for Content Management System. It is online software which enables users to modify a website and upload content without having any technical knowledge. Some examples are WordPress, Joomla.

COGS: stands for costs of goods sold and is relevant to people who sell products online. This metric defines the total cost to purchase a finished product including raw materials, manufacturing (and sometimes shipping if it is included in the price of goods and customers don’t pay for it).

CPA: stands for cost per acquisition and defines how much we spend on getting a new customer or client. The CPA number for your business is crucial to understand, as it enables the calculation of the overall marketing budget needed to achieve desired business growth.

CRO: stands for Conversion Rate Optimisation and describes a process used to improve website conversion. This is done by adopting marketing techniques from trialing different designs, to changing a position for one object on the page. The process helps to improve user experience and can be applied to any channel including social media. Well executed CRO, brings more business and more new customers.

CSS: stands for cascading style sheets and is used to program websites. CSS files contain all design elements and design specifications for each website, as written specifically for browsers. It is a good practice to keep all design elements separately from main coding files. CSS is easily adjustable and a new website feel and look can be created as needed.

CTR: stands for click through rate and shows the percentage of people who were engaged with the website or creative and clicked through to seek more information. CTR is a great metric to analyse ad or banner performance.


EBIT: stands for earnings before interest and taxes and shows the profitability of the business. To calculate EBIT use this formula: EBIT = Operating Revenue – Operating Expenses.  Most small businesses businesses don’t need it.


Infographic: is a visual representation of the total data and a very easy way to depict and look at the overall story. Most research papers can be presented in an infographic way making it more entertaining and understandable for the general public.


KPI:  this stands for key performance indicator. It’s a magic business tool used to measure success in a company or in a company. Kpi’s can be defined as necessary. For example, it may help you to identify the business objectives of data in a certain number of subscribers or certain number of sales, or assess progress and required to go home or indicator.


Pagerank: was introduced by Google to classify relevancy of the websites. Google assigns a score between 0 and 10 to each page. The higher the score, the better it ranks on Google.

PCI: stands for payment card industry and refers to debit and credit card processing. PCI compliance is required for every website that processes credit and debit cards online.

PPC: stands for pay-per-click and describes an advertising model, which is focused on when you pay per click, rather than per view or per purchase. The most popular platform which uses PPC is Google AdWords.


Responsive design: this helps to show the same website on different devices and different platforms in a “responsive” way. It means that responsive websites are automatically converted to different screen resolutions and devices. Responsive design has become popular with the growing number of tablets, phone screens and monitors available.

ROI: stands for return on investment and measures how financially successful investments, marketing campaigns or overall business is.


Search engine optimisation: commonly known as SEO, this is a marketing discipline which if used correctly, helps with Google ranking for a website. Free search (read Google) is one of the most efficient ways to get website traffic.

SMH: stands for social media marketing and is a form of internet marketing which makes use of social networks to generate traffic and sales. The basics of the SMH is to produce shareable content, which can potentially go viral, therefore increasing traffic to the website and brand recognition.


Working capital: is an indicator of a business’s financial health. Working capital can be calculated by deducting current liabilities, from current assets.


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