Nowadays everyone wants to start their own work or business, but when we come into this field, we hear many such words which are quite confusing. Often in meetings or office conversations, people use some English terminology whose real meaning we do not know. If you are also thinking of starting a new job or want to join a startup, then it is very important for you to understand these words so that you are not left behind in any conversation.
Knowledge of these 10 important business terms will help you present your views strongly to any investor or partner. When you work at a professional level, the correct use of these words determines the value of your work. This will not only improve your way of working, but you will also be able to take major decisions related to your business with more accuracy. Let us know those 10 words which are very important for every new businessman and startup founder to know.
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1.Bootstrapping
When a person starts a business with his own savings without any external help or bank loan, it is called bootstrapping. This means that you are gradually expanding the work on your own and currently you have complete control over the company.
2.Value Proposition
This means how your product or service is different and better than others. Why should the customer come to you and what special benefit will he get from you, we call it value proposition. This quality keeps you ahead in the market competition.
3.Burn Rate
The amount of money a company is spending from its own pocket to run its operations in a month is called burn rate. It is important to track this so that you know how long the funds you have are going to last.
4.Pivot
When the old idea or way of working does not give the right results and the owner changes his entire strategy or business model, it is called a pivot. Changing direction according to market demand is called pivot in business.
5.Scalability
This means how much potential your business has to grow in the future. If you can expand your work from a small level to a very large level, and your income can also increase rapidly, then that business is considered scalable.
6.Customer Acquisition Cost
This is the total amount of money you spend (such as advertising, sales or marketing) to acquire a new customer. The lower this expense is, the more the company’s net profit will increase.
7. Churn Rate (Churn Rate)
This is the percentage of customers who stop using your service after a certain period of time. If people are leaving you, the churn rate increases. It is important to keep it low for the stability of the business.
8.Runway
The time for how many months a company can meet its expenses with the cash it has left without any new earnings or investment is called runway. This decides how much time you have to raise new funds.
Also read: How did Radha Vembu create a software company worth Rs 55 thousand crore without external investment?
9.Minimum Viable Product
Instead of launching a big and expensive project directly, preparing a basic model of it is called MVP. This shows whether people actually like your idea or not, so that any major financial loss can be avoided later and proper improvements can be made.
10.Clawback
This is a word that very few people know. Clawback means that if the company later finds out that the bonus given to an employee or executive has been wrongly given, then the company can ask for that money back. This is a special part of the agreement.
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