Someone new to the world of entrepreneurship will notice right away that entrepreneurs have an interesting way of speaking. From “unicorn” to “bootstrapping” to “foodpreneur,” entrepreneurs use a lot of strange language to describe what they do. By combining words, or by assigning new meaning to old ones, they have created a whole new vocabulary to better communicate their needs and ideas in an ever-evolving ecosystem. The EntrepreLingo Series is an effort to fill our readers in on some of the weirder—or less straightforward—terms you’re sure hear in an entrepreneurial environment. Last time we covered the letter A. This week’s installment is brought to you by the letter B.
B2B (or B-to-B)
B2C (or B-to-C)
Stands for Business-to-Consumer. This term describes a model in which businesses focus on selling products directly to consumers. This is the most common model of commerce; examples can be found in companies such as Starbucks, Spotify and Taco Bell.
Bandwidth describes the capacity at which your business can operate. Just like actual bandwidth, it is a limited resource; it can be limited by your team’s energy, current workload, finances or lack of resources.
Benchmarks are set goals used to measure a company’s success; for example, a benchmark could be for a business to reach $X in revenue by its second year. Benchmarks are particularly important for investors who need to see a business’s growth and success rates before investing.
This term is used to describe companies at the forefront of technological development. These technologies are described as “Bleeding Edge” when they have been released in beta to early adopters but are still too unreliable for the general public.
Board (of Directors)
A board of directors is a group of investors and mentors who have been officially elected to oversee a business’s affairs.
Taken from the expression, “Pull yourself up by your bootstraps,” this means a founder is funding the business with his or her own money or through small investments from family and friends. Bootstrapping is beneficial for slow-growth startups whose founders wish to retain total ownership of their companies.
These are short-term loans that are given to “bridge the gap” between financing.
The amount of money your company “burns through” every month in excess of income.
Your business model describes how the different parts of your business—such as key partners, revenue streams, value propositions and customer segments—interact with one another. A business model is less formal than a business plan and is easier to adapt in changing environments.
This is a formalized plan that outlines how your business works. It includes financial models, industry research, target markets, market opportunity, competitive analysis, exit strategies and more. They are typically used when communicating with potential investors, partners, loan officers, etc.
A buyout occurs when someone purchases a company’s shares, and as a result, gains controlling interest in the company.