1099 Form: A 1099 is a tax form used to report income earned outside of traditional employment, like freelance, contract, or side hustle earnings. If you earn $600 or more from a client in a year, they’re typically required to send you a 1099-NEC. Business owners also must issue 1099s to independent contractors they hire. There are different types—1099-MISC for miscellaneous income, 1099-K for payment processors like PayPal, and 1099-DIV or 1099-INT for dividends and interest. It’s essential for tracking non-W2 income and filing accurate taxes.

Accounts Payable (AP): Accounts Payable refers to the money a business owes to suppliers or vendors for goods and services received but not yet paid for. It’s recorded as a liability on the company’s balance sheet and typically involves short-term obligations like inventory, utilities, or outsourced services. Managing AP efficiently helps maintain good vendor relationships and cash flow, as overdue payments can hurt credit and operations.

Accounts Receivable (AR): Accounts Receivable represents the money owed to a business by its customers for goods or services delivered but not yet paid for. It’s recorded as an asset on the balance sheet and reflects short-term revenue the business expects to collect. Efficient AR management helps maintain cash flow, track customer payments, and reduce the risk of bad debt from unpaid invoices.

Angel Investing: Angel investing involves individuals providing early-stage capital to startups, usually in exchange for equity. Angels often invest smaller amounts than VC firms and may offer mentorship. They play a key role in early business growth.

Annual Reporting: Annual reporting is the requirement to file yearly updates with state agencies. It keeps business information current and compliant. Missing reports can result in penalties or dissolution.

Backstock: Backstock refers to inventory that is not currently on the retail floor but is stored in the backroom or warehouse for future sales or restocking. It helps businesses quickly replenish shelves without waiting for new shipments, ensuring product availability. Managing backstock efficiently prevents over-ordering, reduces storage costs, and supports a smoother customer experience.

Bootstrapping: Bootstrapping is building a business using personal savings or operating revenue rather than external funding. It allows founders to retain control but can limit growth speed. Many successful businesses start by bootstrapping.

Brand Positioning: Brand positioning defines how a business wants to be perceived in the minds of its target customers relative to competitors. It includes messaging, values, and unique selling points. Clear positioning helps businesses stand out and attract the right audience. prevents over-ordering, reduces storage costs, and supports a smoother customer experience.

Budget: A budget is a financial plan that outlines expected income and expenses over a specific period, helping individuals or businesses manage money, set goals, and make informed decisions. For business owners, a budget is crucial for forecasting cash flow, controlling costs, planning growth, and ensuring long term sustainability. It can be adjusted monthly, quarterly, or annually depending on business needs.

Business Credit: Business credit is a financial profile separate from your personal credit that reflects your company’s ability to borrow and repay money. It’s built through business loans, credit cards, vendor accounts, and on-time payments, and is tracked by agencies like Dun & Bradstreet, Experian, and Equifax. Strong business credit can help you secure financing, negotiate better terms with suppliers, and protect your personal credit from business liabilities.

Business Insurance: Business insurance provides financial protection against risks such as property damage, lawsuits, or employee injuries. Coverage varies by industry and business size. Insurance helps reduce exposure to unexpected losses.

Business Model: A business model outlines how a company creates, delivers, and captures value essentially, how it makes money. It includes key components like target customers, revenue streams, cost structure, product or service offerings, and distribution channels. Whether it’s subscription-based, product sales, service-based, or ad supported, a clear business model helps guide strategy, attract investors, and sustain growth.

Business to Business (B2B): B2B refers to transactions, services, or relationships between two businesses rather than between a business and a consumer. Common in industries like manufacturing, software, consulting, and wholesale, B2B companies sell products or services to other businesses to help them operate, grow, or serve their own customers. B2B sales often involve longer decision cycles, customized solutions, and ongoing partnerships.

Compliance Risk: Compliance risk is the potential for legal or financial penalties due to failure to follow laws or regulations. It can arise from tax, labor, or industry-specific rules. Managing compliance risk protects long-term business viability.

Business to Consumer (B2C): B2C describes a business model where companies sell products or services directly to individual customers, rather than other businesses. This includes retail stores, e-commerce shops, subscription services, restaurants, and more. B2C businesses typically focus on high-volume sales, fast decision-making, and strong branding or marketing to attract and retain consumers.

Cash Flow: Cash flow is the movement of money into and out of a business over a specific period, reflecting how well a company can pay its bills, invest in growth, and stay financially healthy. Positive cash flow means more money is coming in than going out, while negative cash flow can signal trouble. Tracking cash flow helps business owners manage expenses, avoid shortfalls, and make smarter financial decisions.

Churn: Churn refers to the percentage of customers who stop doing business with a company over a given period. High churn can signal issues with product quality, pricing, or customer experience. Managing churn is especially important for subscription and recurring revenue businesses.

Collateral: Collateral is an asset pledged to secure a loan. If the borrower defaults, the lender can seize the collateral. Common collateral includes property, equipment, or inventory.

Contract: A contract is a legally binding agreement between two or more parties that outlines rights, responsibilities, and obligations. Contracts help prevent disputes and provide clarity in business relationships. They are commonly used with clients, vendors, employees, and partners.

Convertible Note: A convertible note is a form of short-term debt that converts into equity during a future funding round. It allows startups to raise capital without setting a valuation immediately. Convertible notes are common in early-stage funding.

Copyrights: Copyright protects original creative works like writing, music, art, and software. It gives creators exclusive rights to use and distribute their work. Copyright helps businesses control and monetize creative assets.

C-Corp: A C-Corp is a standard corporate structure taxed separately from its owners. It allows unlimited shareholders and multiple classes of stock. C-Corps are common for large businesses and venture-backed startups.

Cost: Cost is the total expense incurred by a business to create a product, deliver a service, or run operations. It includes direct costs like raw materials and wages, and indirect costs such as rent, equipment, or administrative expenses. Accurately tracking costs helps businesses price their offerings, control spending, and calculate profitability.

Competitive Advantage: A competitive advantage is what sets a business apart from its competitors and allows it to perform better in the market. This can come from lower costs, superior products, strong branding, unique technology, or exclusive access to customers or resources. A clear competitive advantage helps businesses attract customers, protect market share, and sustain long-term growth.

Conversion Rate: Conversion rate measures the percentage of users who take a desired action, such as making a purchase or filling out a form. It’s calculated by dividing conversions by total visitors. Improving conversion rates helps businesses grow revenue without increasing traffic.

CRM (Customer Relationship Management): A CRM is a system or software tool that helps businesses manage and analyze customer interactions and data throughout the customer lifecycle. It’s used to track leads, automate follow ups, store contact information, and improve customer service. CRMs help businesses build stronger relationships, increase sales, and streamline communication across marketing, sales, and support teams.

Customer Acquisition Cost (CAC): CAC is the total cost of acquiring a new customer, including marketing, sales, and advertising expenses. It’s calculated by dividing total acquisition costs by the number of new customers gained. Keeping CAC low relative to revenue is critical for sustainable growth.

DBA (Doing Business As): A DBA is a registered business name used by a company that differs from its legal name. It allows businesses to operate under a brand name. A DBA does not create a separate legal entity.

Debt Financing: Debt financing involves borrowing money that must be repaid with interest. Common forms include loans and credit lines. It allows businesses to grow without giving up ownership.

Dilution: Dilution occurs when issuing new shares reduces existing owners’ percentage ownership. It often happens during fundraising. While dilution lowers ownership percentage, it can increase overall business value.

Due Diligence: Due diligence is the investigation and evaluation of a business before a major decision, such as an investment or acquisition. It involves reviewing financials, legal matters, and operations. Due diligence helps uncover risks and validate assumptions.

E-Commerce: E-commerce, or electronic commerce, is the buying and selling of goods or services over the internet. It includes online stores, digital marketplaces, and platforms where businesses or individuals accept payments and manage transactions digitally. E-commerce allows businesses to reach customers globally, operate 24/7, and reduce overhead compared to brick-and-mortar stores.

EIN (Employer Identification Number): An EIN is a federal tax identification number issued by the IRS to identify a business. It’s used for taxes, hiring employees, and opening business bank accounts. Most businesses need an EIN to operate legally.

Equity Financing: Equity financing raises capital by selling ownership stakes in a business. It doesn’t require repayment but reduces founder ownership. It’s commonly used by startups seeking rapid growth.

Exit Strategy: An exit strategy is a plan for how a business owner or investor will eventually leave the business and realize a return. Common exits include selling the company, merging with another business, or going public. Having an exit strategy helps guide growth decisions and long-term planning.

Grants: Grants are non-repayable funds awarded by governments, organizations, or institutions to support specific business activities, projects, or goals. Unlike loans, grants don’t require repayment, making them a valuable source of capital for startups, nonprofits, or small businesses. They often come with eligibility requirements and reporting obligations, but they can fund everything from equipment to research to community programs.

Go-To-Market Strategy: A go-to-market strategy outlines how a business will launch a product or service and reach its target customers. It covers pricing, distribution, marketing, and sales tactics. A strong GTM strategy helps ensure efficient growth and market adoption.

Indemnification: Indemnification is a contractual provision where one party agrees to compensate another for certain losses or damages. It’s often used to allocate risk in business agreements. Indemnification clauses help protect businesses from financial liability.

Intellectual Property (IP): IP refers to creations of the mind, such as inventions, designs, branding, and original works. Protecting IP helps businesses maintain competitive advantages and monetize innovation. Common IP types include trademarks, copyrights, and patents.

ent decisions in any business.

Interest: Interest is the cost of borrowing money, expressed as a percentage of the loan amount, or the return earned on savings or investments. When you borrow, you pay interest to the lender; when you save or invest, you earn interest from the bank or institution. Understanding interest is key to managing loans, credit, and investment decisions in any business.

Inventory: Inventory refers to the goods a business holds for the purpose of selling or producing products. It includes raw materials, work-in-progress items, and finished goods ready for sale. Managing inventory effectively helps prevent stockouts, reduce storage costs, and keep cash flow steady, especially in retail, manufacturing, and e-commerce businesses.

Investor: An investor is an individual or organization that puts money into a business, project, or asset with the expectation of earning a financial return. In the startup world, investors can include angel investors, venture capitalists, or equity crowdfunding participants. They may provide capital in exchange for ownership, equity, or interest, and often bring strategic guidance or industry connections along with their funding.

KPI (Key Performance Indicator): A KPI is a measurable value that shows how effectively a business or team is achieving specific objectives. Common KPIs include revenue growth, customer retention, website traffic, or conversion rates depending on the business type and goals. Tracking KPIs helps founders monitor progress, make data-driven decisions, and stay focused on what matters most.

Lead Generation: Lead generation is the process of attracting and capturing potential customers who have shown interest in a product or service. This can happen through content, advertising, referrals, or events. Strong lead generation keeps the sales pipeline full and supports consistent growth.

Leverage: Leverage refers to using borrowed capital to increase potential returns. While it can amplify growth, it also increases risk. Proper leverage requires careful financial management.

Liability: Liability refers to a business’s legal responsibility for debts, damages, or injuries. It can arise from contracts, accidents, or legal claims. Managing liability is critical to protecting business and personal assets.

Lifetime Value (LTV): LTV estimates the total revenue a business can expect from a customer over the entire relationship. It helps businesses understand how much they can afford to spend on acquiring customers. A high LTV compared to CAC indicates a healthy business model.

LLC (Limited Liability Company): An LLC is a business structure that provides liability protection while offering flexible tax treatment. It’s popular with small and medium-sized businesses. LLCs are relatively easy to form and manage.

Line of Credit: A line of credit is a flexible loan that allows businesses to borrow up to a set limit as needed. Interest is paid only on the amount used. Lines of credit help manage cash flow fluctuations.

Loss Leaders: Loss leaders are products or services sold at a loss to attract customers, with the goal of encouraging additional purchases that are more profitable. This strategy is commonly used in retail and e-commerce to drive traffic, increase brand awareness, or upsell higher-margin items. While the initial sale loses money, the overall strategy aims to boost total revenue and customer loyalty.

Margins: Margins refer to the difference between a business’s revenue and its costs, usually expressed as a percentage. Common types include gross margin (revenue minus cost of goods sold) and net margin (profit after all expenses). Margins help measure profitability, set pricing strategies, and determine how efficiently a business operates. Higher margins typically mean more room for growth and reinvestment.

Market Segmentation: Market segmentation is the process of dividing a broad audience into smaller groups based on shared characteristics such as demographics, behavior, or needs. This allows businesses to tailor products, pricing, and messaging more effectively. Strong segmentation improves marketing performance and customer engagement.

Mergers & Acquisitions (M&A): M&A refers to the consolidation of companies through mergers (two businesses combining) or acquisitions (one business buying another). These transactions are often used to expand market share, acquire technology, or enter new markets. M&A plays a major role in business growth and exit strategies.

Moat: A moat refers to a business’s ability to maintain a long-term competitive advantage that makes it difficult for competitors to enter the market or take customers. Moats can include strong brand loyalty, proprietary technology, high switching costs, network effects, or regulatory barriers. A strong moat helps protect profitability and business value over time.

NDA (Non-Disclosure Agreement): An NDA is a legal contract that prevents one or more parties from sharing confidential information with others. It’s commonly used when discussing partnerships, hiring freelancers, or sharing proprietary business details. NDAs help protect intellectual property, trade secrets, and sensitive strategies, ensuring trust and legal recourse if information is leaked.

Nexus: Nexus refers to a business’s connection to a state that creates tax obligations. This can be physical, economic, or digital. Understanding nexus is important for sales and income tax compliance.

Non-Compete Agreement: A non-compete agreement restricts a person from working for or starting a competing business for a specified period and area. Businesses use them to protect trade secrets and customer relationships. Enforceability varies by state and jurisdiction.

Non-Compete Agreement: A non-compete agreement restricts a person from working for or starting a competing business for a specified period and area. Businesses use them to protect trade secrets and customer relationships. Enforceability varies by state and jurisdiction.

OPM (Other People’s Money): OPM refers to the use of external funding like loans, investor capital, or credit to start or grow a business instead of using your own personal savings. It’s a common strategy in entrepreneurship and real estate to leverage resources, reduce personal risk, and scale faster. While powerful, using OPM requires careful planning and accountability to avoid debt traps or equity dilution.

Patent: A patent grants exclusive rights to an invention for a limited time in exchange for public disclosure. It protects new, useful, and non-obvious inventions. Patents help businesses safeguard innovation and deter competitors.

Payroll Tax: Payroll taxes are taxes withheld from employee wages and paid by employers. They fund programs like Social Security and Medicare. Proper payroll tax management is essential for compliance.

Personal Guarantor: A personal guarantor is someone often a business owner who agrees to be personally responsible for a loan or credit line if the business can’t repay it. This means their personal assets (like savings, income, or property) can be used to cover the debt. Lenders often require a guarantor when a business is new, has limited credit, or poses higher risk.

Private Equity: Private equity involves investing in established companies, often to improve operations and increase value before selling. These firms typically acquire significant ownership stakes. Private equity is common in mature or underperforming businesses.

Profit: Profit is the amount of money a business keeps after subtracting all expenses from its total revenue. It’s a key measure of financial success and comes in forms like gross profit (revenue minus cost of goods sold) and net profit (what’s left after all operating costs, taxes, and interest). Profit shows whether a business is sustainable and capable of growth.

Qualified Lead: A qualified lead is a potential customer who has been evaluated and meets certain criteria indicating a higher likelihood of making a purchase. Qualifications may include budget, need, authority, or timing. Focusing on qualified leads helps sales teams use time and resources more efficiently.

Registered Agent: A registered agent is a designated individual or service that receives legal and government documents on behalf of a business. They ensure important notices are handled properly. Most states require businesses to have one.

Request for Proposal (RFP): An RFP is a formal document issued by a company or organization to solicit bids from vendors or service providers for a specific project or solution. It outlines the project requirements, budget, timeline, and evaluation criteria. Businesses respond to RFPs with detailed proposals, and winning an RFP can lead to significant contracts or partnerships—especially in B2B and government sectors.

Risk Management: Risk management is the process of identifying, assessing, and reducing potential business risks. This includes financial, operational, legal, and strategic risks. Effective risk management helps ensure stability and continuity.

ROI (Return on Investment): ROI is a performance metric that measures the profitability of an investment by comparing the return (or gain) to the original cost. It’s usually expressed as a percentage and helps businesses evaluate whether a marketing campaign, product launch, or purchase was worth the expense. A high ROI means you gained more value than you spent—critical for smart decision-making and growth.

Retention: Retention measures a business’s ability to keep customers over time. High retention often indicates customer satisfaction and strong value delivery. Improving retention reduces acquisition costs and increases lifetime value.

Revenue: Revenue is the total amount of money a business earns from selling its products or services before any expenses are deducted. It’s often referred to as the “top line” on an income statement and serves as a key indicator of a company’s size and growth. Consistent or increasing revenue shows strong demand and is essential for covering costs and generating profit.

SAFE Agreement: A SAFE (Simple Agreement for Future Equity) allows investors to receive equity at a later date without accruing interest or having a maturity date. It simplifies early-stage fundraising. SAFEs are popular with startups and angel investors.

Sales Funnel: A sales funnel represents the stages a customer goes through from first discovering a business to making a purchase. Typical stages include awareness, interest, consideration, and conversion. Understanding the funnel helps businesses improve marketing effectiveness and close more sales.

Sales Tax: Sales tax is a consumption tax imposed on the sale of goods or services. Businesses collect it from customers and remit it to the government. Sales tax rules vary by state and locality.

Scalability: Scalability refers to a business’s ability to grow revenue and operations without a matching increase in costs. A scalable business can handle more customers, orders, or output efficiently often through automation, streamlined processes, or digital tools. High scalability means the company can expand quickly and profitably as demand grows.

Schedule C: Schedule C is an IRS form used by sole proprietors to report business income and expenses. It’s filed with a personal tax return. Schedule C determines taxable profit or loss.

Scenario Planning: Scenario planning is a strategic method used to prepare for different possible future outcomes. Businesses create multiple scenarios—best case, worst case, and most likely—and plan responses for each. This approach helps reduce uncertainty and improve decision-making in volatile environments.

S-Corp: An S-Corp is a tax designation that allows profits to pass through to owners without corporate income tax. It can reduce self-employment taxes for eligible businesses. S-Corps have ownership and eligibility restrictions.

Serviceable Available Market (SAM): SAM is the portion of the total market that a business can realistically target with its products or services based on geography, regulations, or business model. It narrows TAM into a more practical segment. SAM helps businesses focus strategy and set achievable growth expectations.

Service Agreement: A service agreement is a contract that defines the terms under which services are provided. It typically outlines scope of work, payment terms, timelines, and responsibilities. Clear service agreements reduce misunderstandings and legal risk.

Serviceable Obtainable Market (SOM): SOM is the share of the market a business can realistically capture in the near to medium term. It considers competition, pricing, capacity, and execution. SOM is often used in financial projections and investor pitches to show realistic growth potential.

Side Hustle: A side hustle is a way to earn additional income outside of a primary job or main source of income. It can include freelancing, consulting, online businesses, gig work, selling products, or offering services in your spare time. Side hustles allow individuals to test business ideas, build skills, and generate extra income with lower risk than starting a full-time business.

For readers exploring side hustles in more depth, Hustler’s Library offers guides on identifying profitable side hustle ideas, beginner-friendly and low-cost opportunities, fast ways to earn extra cash, essential books to read before getting started, and a short survey designed to help match side hustles to individual goals.

SMBs (Small and Medium-Sized Businesses): SMBs are businesses with fewer employees and lower revenue than large corporations typically defined as having fewer than 500 employees in the U.S. They include everything from solo entrepreneurs to growing local companies. SMBs make up the backbone of the economy, often operating with leaner teams, tighter budgets, and a focus on innovation or community service.

SS-4: The SS-4 is an IRS form used to apply for an Employer Identification Number (EIN), which is like a Social Security number for a business. Business owners fill out Form SS-4 to officially register their company for tax purposes, open business bank accounts, or hire employees. It’s a key step in forming an LLC, corporation, or partnership in the U.S.

Startup(s): Startups are newly formed businesses typically in the early stages of development built to solve a problem or offer a unique product or service, often with growth and scalability in mind. While they can exist in any industry, startups are especially common in tech and innovation sectors. They usually operate with limited resources, a lean team, and a focus on rapid testing, learning, and scaling.

Strategic Planning: Strategic planning is the process of defining a business’s long-term goals and outlining the actions needed to achieve them. It involves evaluating resources, market conditions, competition, and risks. Effective strategic planning helps businesses stay focused, adapt to change, and allocate resources efficiently.

Target Market: A target market is the specific group of people a business aims to serve with its products or services. This group is defined by shared characteristics like age, location, income level, lifestyle, or buying habits. Knowing your target market helps shape marketing, product development, and messaging—so you reach the right people with the right offer.

Term Loan: A term loan provides a lump sum of capital repaid over a fixed period with interest. It’s commonly used for large purchases or expansion. Repayment schedules are predictable and structured.

Total Addressable Market (TAM): TAM represents the total demand for a product or service if a business were able to capture 100% of the market. It’s used to understand the maximum revenue opportunity available. TAM helps founders and investors evaluate whether a business idea is large enough to justify the effort, risk, or investment.

Trademark: A trademark protects brand identifiers such as names, logos, and slogans used in commerce. It helps prevent consumer confusion and protects brand reputation. Trademarks are valuable business assets.

Trade Lines: Trade lines are records of credit accounts listed on a business or personal credit report, including details like the creditor’s name, account type, balance, and payment history. For businesses, trade lines can include vendor credit, credit cards, or loans. Building positive trade lines helps establish strong credit, which can improve financing opportunities and vendor terms.

Upsell: An upsell is a sales strategy where a business encourages a customer to purchase a more expensive version of a product, add premium features, or buy additional items to increase the total sale value. Common in both retail and service industries, upselling boosts revenue and enhances the customer experience by offering more value or convenience.

Use Tax: Use tax applies to purchases made without paying sales tax, often from out-of-state sellers. It ensures tax fairness across jurisdictions. Businesses are responsible for tracking and remitting use tax.

Valuation: Valuation is the process of determining the current worth of a business, asset, or company. It’s commonly used during fundraising, mergers, acquisitions, or when selling a business. Valuation can be based on revenue, profit, market potential, or assets, and helps investors, founders, and buyers make informed decisions about financial opportunities.

Venture Capital: Venture capital is funding provided to high-growth startups in exchange for equity. VC firms often invest in technology or innovation-driven businesses. In addition to capital, they may offer strategic guidance and networks.

W-9 Form: A W-9 is a tax form used to provide a taxpayer’s name and identification number. Businesses collect W-9s from contractors for reporting payments. It helps ensure accurate tax reporting.