Business glossary
You do not have to already know this stuff.
LLC
A limited liability company—a common business structure that can provide separation between personal and business liability. Whether it is right for you depends on your situation.
EIN
Employer Identification Number from the IRS. Often needed for banking, hiring, and taxes—even for solo businesses.
DBA
“Doing business as” name—a trade name you operate under that may differ from your legal entity name.
Registered agent
A person or service designated to receive official legal and state documents for your business.
Business plan
A document describing your business, market, operations, and financial outlook. Useful for planning and some funding applications.
CAC
Customer acquisition cost—what you spend to get a paying customer. Important once you start marketing.
Gross margin
Revenue minus direct costs of delivering your product or service, before overhead.
Cash flow
Money moving in and out of your business over time—not the same as profit.
Lead
Someone who showed interest but has not yet become a paying customer.
Conversion rate
The percentage of people who take a desired action—like buying after visiting your site.
SEO
Search engine optimization—improving how your business appears in organic search results.
Sole proprietorship
The default structure when you start working for yourself with no filing. You and the business are legally the same, so your personal assets are exposed if the business is sued or owes money.
Operating agreement
An internal document for an LLC that lays out who owns it, how it's run, and how decisions get made. You keep it; you don't file it. Banks and the IRS treat it as evidence the LLC is separate from you.
Articles of Organization
The form you file with your state (usually the Secretary of State) to create an LLC. Filing it and paying the state fee is what makes the LLC exist.
Franchise tax
A yearly tax or fee some states charge a business just for existing there, separate from income tax. California's is a flat $800 minimum; Texas charges $0 below a revenue threshold.
Quarterly estimated taxes
Income and self-employment tax that the self-employed pay to the IRS four times a year instead of through paycheck withholding. Miss them and you owe penalties.
Statement descriptor
The short business name that shows up on a customer's card statement. Set it to something they'll recognize, or you'll get chargebacks from people who don't remember the charge.
Net vs. gross
Gross is the money that came in. Net is what's left after costs. Owners who track gross feel busy; owners who track net know if the business works.