Taking the leap into entrepreneurship is one of the most rewarding things you can do, but it's not all rainbows and butterflies. Running a business comes with its fair share of challenges. One of which is understanding all the business jargon that gets thrown around. Learning the ropes of business vocabulary can feel like a major vocabulary lesson, but we've put together the following list of terms to help you out along the way.

Limited Liability Company Designation

A limited liability company (LLC) is a type of legal structure that provides personal financial protection in the event that your business is sued. LLCs are a popular choice among small business owners in Illinois because they offer the same limited liability protection as a corporation, but they are much less complicated and less expensive to set up and maintain.

Balance Sheets

A balance sheet is a financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time. Balance sheets are used by investors, creditors, and others to gain insights into a company's financial strength and stability.

Cash Flow Statement

Cash flow is the movement of money in and out of a business. Positive cash flow means that more money is coming into the business than going out; negative cash flow indicates that more money is leaving the business than coming in.

Costs That Are Fixed

Fixed costs are expenses that stay the same even when production or sales volume changes. Common examples of fixed costs include rent, insurance, and salaried employee wages.

The Break-Even Point

This is the level of sales at which a company's total revenue equals its total expenses. In other words, it's the point at which a company starts to make a profit.

Profit Margin

Speaking of profit, profit margin is a metric used to assess how much profit a company makes per dollar of revenue. It is calculated by dividing net income by total revenue.

Key Performance Indicators (KPIs)

Key performance indicators are metrics used to measure progress against specific objectives laid out by management. KPIs vary from industry to industry, but common examples include sales volume, customer satisfaction rates, and social media engagement levels.

Marketing Channels

Marketing channels are the platforms through which companies communicate with their target audiences. Some common marketing channels include television, radio, print advertisements, online banner ads, email marketing campaigns, and social media outreach.

Search Engine Optimization (SEO)

Search engine optimization is the process of optimizing website content for better visibility and higher search engine rankings. SEO involves using targeted keywords throughout website content so that search engines can easily find and index it.

Data Analytics

Data analytics is the process of extracting meaning from data sets in order to make better-informed decisions. Data analytics can be used for things like identifying patterns and trends, predicting future outcomes, and assessing risks and opportunities.

Benchmarking

Benchmarking is the process of comparing a company's performance against that of its competitors or against industry averages. Benchmarking can be used to measure things like financial performance, operational efficiency, customer satisfaction levels, and employee productivity levels.

Start Learning

Learning business terminology can feel like drinking from a firehose, but it is something that can be learned and mastered! The most important thing for new entrepreneurs to remember is that there are resources available to help you every step of the way. Don't be afraid to ask for help when you need it!

Position your business for success and join the McLean County Chamber of Commerce! Membership will give you access to essential resources, connections with influential individuals, and more - plus you can benefit from the insights of experienced entrepreneurs. Don't miss out on this opportunity – sign up today and reap all the rewards the chamber has to offer.