Running a business doesn’t mean you need to become a numbers expert, but having a basic grasp of how your business operates behind the scenes can help you make better choices, talk more confidently with professionals, and avoid common missteps.
At Infinity & Beyond Business Inc., we believe that a clear understanding leads to confident leadership. So here’s a simple guide to 15 essential business terms every entrepreneur should get familiar with—broken down in plain language and real-life examples.
- Sales Total
What it means: The full amount earned from selling your product or service.
Example: You sell $10,000 worth of handmade furniture in June. That’s your sales total for the month. - Operating Costs
What it means: The money you spend to keep your business running day to day.
Example: Things like rent, internet, wages, or advertising fall into this category. - What You Keep (After Costs)
What it means: What’s left after you’ve covered your operating costs.
Example: If you bring in $10,000 and spend $7,000 on operations, you’ve got $3,000 left. - What You Earn Per Sale
What it means: The amount you keep from each sale after subtracting direct product costs.
Example: Sell something for $100 that costs $60 to make? You earn $40 on that sale. - Product or Service Costs
What it means: What it takes to make or deliver what you sell.
Example: For a bakery, this includes flour, eggs, and packaging. - What Your Business Owns
What it means: Everything your business has that can be used or sold.
Example: Computers, tools, stock, and even your business bank account. - What Your Business Owes
What it means: Any money your business needs to pay back.
Example: This includes things like credit card balances or bills waiting to be paid. - Your Share in the Business
What it means: What’s yours after subtracting what the business owes from what it owns.
Example: If your business owns $100,000 in stuff and owes $40,000, your share is $60,000. - Unpaid Customer Orders
What it means: The money customers owe you for products or services you’ve already delivered.
Example: If you’ve sent a $1,500 invoice that hasn’t been paid yet, that’s an unpaid order. - Bills You Still Need to Pay
What it means: The money your business needs to pay suppliers or service providers.
Example: If you received a $1,200 bill from a vendor, it’s on your to-do list until paid. - Money Coming In and Going Out
What it means: How much money moves through your business, and whether it’s flowing smoothly.
Example: If more is coming in than going out, things are looking healthy. - Your Business’s Organizer List
What it means: A structured list that keeps track of every area where money is moving.
Example: This might include categories like sales, spending, equipment, or bills. - Wear and Tear Over Time
What it means: The way your tools or gear lose value over time as you use them.
Example: A $10,000 laptop used over five years might “drop” in value by about $2,000 per year. - Quick Check-In Report
What it means: A simple way to make sure your records are balanced.
Example: Think of it like a final checklist before closing the books for the month. - Your Business Year
What it means: The 12-month period you use to track your results.
Example: It could run January to December, or April to March—whatever works best for you.
Grasping these basics gives you more clarity about how your business runs—and helps you have more meaningful conversations with your support team.
At Infinity & Beyond Business Inc., we’re here to simplify the complex and support you in building a business you understand and trust. Whether you want a full-service team or just a quick boost of guidance, we’re always just a call or email away.
Ready to get clearer on your business operations?
Contact Infinity & Beyond Business Inc. today for friendly, expert support in North Vancouver that meets you where you are.
