Top 10 Business Terms All Small Businesses Need To Know

Starting a small business can be really exciting. But it can also feel pretty overwhelming. Especially when you start coming across all these business terms you’ve never heard before and everyone just seems to know and understand.

No one really explains them to you either. You’re just kind of expected to know what they mean. Or figure it out as you go. Which isn’t ideal when you’re trying to build something that actually lasts.

So today, we want to walk you through ten of the most common business key terms you’re likely to come across. These aren’t just buzzwords or business jargon, they actually matter. Whether you're setting up your structure, tracking growth, or just trying to understand what your accountant is talking about… this stuff helps.

We’ll keep it simple. Just clear definitions of this business lingo, a little context, and maybe a few tips along the way. The goal is to help you feel more confident as you build your business, because knowing the language is step one.

1. SME (Small and Medium-sized Enterprise)

Let’s start with the basics. SME stands for Small and Medium-sized Enterprise. It’s a general term used to describe businesses that fall below a certain size, usually based on the number of employees, annual revenue, or sometimes both.

The exact definition can vary a bit depending on where you are in the world. But generally, a small business has fewer than 50 employees, and a medium-sized one has up to 250. Anything bigger than that and you’re moving into large company territory.

You’ll see this acronym everywhere. You can see it on government documents, funding applications, even news articles. So it’s good to get familiar with it early on.

SMEs make up the majority of businesses out there. In fact, according to Mckinsey and Co, they make up around 90% of businesses worldwide and account for more than 50% of employment globally.

They also come in all shapes and sizes, from one-person service ventures like food trucks to franchises. Shopify has a handy roundup of small business ideas for aspiring entrepreneurs in today’s market.

2. Sole Proprietorship

If you're starting a business on your own, this is probably the first structure you'll come across.

A sole proprietorship means you are the business. There’s no legal separation between you and your business. It’s just you running the show. Simple to set up, easy to manage, and usually the go-to option for freelancers, consultants, and solo service providers.

But, and this is important, because there’s no legal separation, you’re personally responsible for any debts or legal issues. So if the business gets into trouble, your personal assets (like your savings or even your house) could be on the line.

It’s a great choice if you’re just starting out and keeping things small. There’s less paperwork, fewer costs, and you get full control over every decision. But as your business grows, you might want to look into other structures that offer a bit more protection.

Structures like…

3. Limited Liability Company

Limited Liability Company, or LLC, as it’s often called is a super popular structure for small business owners, and for good reason. An LLC definition is that it basically gives you the best of both worlds. You’ll have the flexibility of a sole proprietorship, but with a layer of legal protection.

When you register your business as an LLC, your personal assets are separate from your business. If something goes wrong, say, the business gets sued, you’re not personally on the hook. That “limited liability” part is key.

It also makes your business feel a bit more official. You can open a business bank account, sign contracts under your business name, and generally look more credible to your partners, clients, and investors.

That said, there’s a bit more paperwork involved than the sole proprietorship structure we mentioned above, and you’ll need to register it properly depending on your country or state. But it’s still way more straightforward than a corporation. So if you’re weighing up sole proprietorship vs LLC it’s something to think about.

4. Public Limited Company

A Public Limited Company, or PLC, is a type of business that can sell shares to the public. Think big. We're talking about companies that have gone to IPO and are listed on a stock exchange, like Apple, Tesla, Walmart or Tesco.

The majority of small businesses won’t start out as PLCs. It’s a structure that comes with a lot more rules, more reporting, and, yes, more pressure. But it also opens up bigger opportunities, like raising money from investors and expanding extremely quickly.

The reason why this is still important for you to know is because understanding which structure suits your goals is essential, especially if you're eyeing the most profitable small businesses to start with minimal risk.

If you’re dreaming big, planning to grow quickly, or hoping to scale your business into something much larger down the line, understanding how a PLC works now can help you make smarter decisions early on. Even if you never take your company public, it’s good to know what’s possible, and what’s required.

5. Near Field Communication (NFC)

This morning, did you go into a coffee shop to grab your favourite iced caramel macchiato, cortado, or matcha latte? How did you pay? Did you take out your smartphone and just tap it on the reader? If so, you’ve used Near Field Communication (or NFC) without even thinking about it.

NFC might sound super technical, but the Near field communication definition is actually pretty simple. It’s a modern business technology that lets two devices share information wirelessly when they’re really close, like just a few centimetres apart.

For small businesses, NFC powers those quick, contactless payments everyone loves to make nowadays. It’s fast, secure, and keeps lines moving. In fact, UK Finance found that one third of British adults now use contactless payments on their mobile devices.

Whether you’re running a coffee cart, a retail store, or a pop-up stall, accepting NFC payments makes your business feel modern and customer-friendly.

6. General Partnership

This is when two or more people decide to start and run a business together. When this kind of arrangement occurs, you share the work, the profits, and the responsibilities.

In a general partnership, everyone is personally responsible for the business’s debts and legal obligations. So if the business runs into trouble, each partner’s personal assets could be at risk. It’s kind of like a sole proprietorship, but with more people involved.

One of the biggest advantages of this is that you’re not doing it alone. You get to combine skills, share ideas, and split the workload. But the flip side is, you have to trust your partners and be clear about who’s responsible for what.

7. TL;DR (Too Long; Didn’t Read)

In the world of corporate jargon phrases, TL;DR is kind of a lifesaver. It’s what people use when a message, report, or article is packed with too many details or complicated business definitions. Essentially, when it’s too long to read all the way through.

If you’re looking into modern business terminology or a business dictionary, you’ll notice how quickly these terms can pile up. Sometimes you just want the key points without getting lost in all the business lingo.

You’ll often see TL;DR sections at the start or end of documents, giving you a short version of what you need to know, saving time and making it easier to understand modern business terminology and business lingo.

8. COB (Close of Business)

You’ll hear this a lot in emails, meetings, and pretty much any business setting. It basically means the end of the business day, the time when a company officially wraps up work for the day.

Now, what time exactly COB is can depend on the company or even the country, but generally, it’s around 5 or 6 pm. So if someone says, “Please send me the report by COB today,” they mean they want it before the day ends, not the next morning.

It’s a super common phrase in business lingo and company terms, especially when you’re dealing with deadlines, project updates, or communications with clients and partners.

There are a few other ways to say this, by the way. People might say EOB, which stands for End of Business, or sometimes you’ll hear End of Day (EOD). They all basically mean the same thing… Finish whatever needs doing before the workday closes.

9. KPI (Key Performance Indicator)

These are the important numbers or metrics that show how well your business is doing.

Tracking KPIs is crucial if you're running a business, or even if you're planning to take over one. They help you see what’s working, what’s not, and where you might need to make changes.

KPIs can be anything from sales numbers, customer satisfaction scores, website traffic, or even employee turnover rates.

The key is picking the right ones that match your business goals.

And here’s a pro tip: if you’re thinking about buying a business, make sure you’re asking the right questions about their KPIs. Understanding those numbers can tell you a lot about the health and potential of the business you want to take over.

10. AIDA: Attention, Interest, Desire, Action

Last but definitely not least we’ve got AIDA. This is a classic model in marketing and sales that stands for Attention, Interest, Desire, and Action. Think of it as the four steps you want your customers to go through when they see your product or service.

First, you grab their Attention, maybe with a catchy headline or eye-catching design. Next, you spark their Interest by showing how what you offer solves a problem or meets a need.

Then, you build Desire, making them want your product, by highlighting benefits or showing how life gets better with it. Finally, you encourage Action, getting them to buy, sign up, or contact you.

If you’re running a small business, knowing the AIDA model helps you create better ads, emails, or pitches that actually work.

Parting Thoughts

Starting a small business can feel exciting, but also a bit confusing. There’s a lot of business jargon and terms that can sound like a foreign language. But knowing these business key terms is really important. It helps you make smarter decisions and understand what’s going on around you.

Today, we talked about some of the most common business definitions and company terms you’ll hear. From simple things like SME and sole proprietorship vs LLC, to tech terms like Near Field Communication, and even marketing ideas like AIDA.

Think of this as a small business dictionary, a way to help you understand business lingo and corporate jargon phrases without getting lost. Knowing these words will make it easier to run your business, work with partners, and talk to your accountant.

So, the next time you hear a term you don’t know, don’t be afraid to ask. Learning this language will help you build a strong, lasting business.

About the author

Tom South is the Director of Web & Organic at Epos Now; with a passion for digital strategy and organic growth, Tom helps SMEs leverage technology to streamline operations and scale efficiently. Epos Now empowers retail, hospitality, and service businesses to run smarter with an all-in-one cloud POS system that simplifies sales, payments, and management - anytime, anywhere.