Small business jargon buster

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Don’t be bamboozled by business babble. Our jargon buster offers simple explanations for frequently used business terms and phrases, so you’ll never be confused by corporate speak again.

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Busting business jargon
Make sense of business jargon and corporate buzzwords with our down-to-earth A-Z guide.

Starting a business can be a wonderfully exciting adventure as you finally begin to live your dream. But sooner or later, you’ll find yourself presented with a document stuffed full of business jargon, at which point you may start to wonder if you belong in the business world at all. But don’t worry – you do, and with the help of a few simple definitions, you can easily translate business speak into plain English.

What is business jargon?

Business jargon is a befuddling medley of arcane expressions and unintelligible phrases that business insiders use as shorthand to refer to topics they discuss every day. Unfortunately, if you haven’t encountered this type of business talk before, it just comes across as incomprehensible babble (which is why you should avoid using it in general conversation).

A-Z of business jargon


24/7 stands for 24 hours a day, seven days a week. This is a shorthand way of referring to a service that is always available.

Accounts payable

Accounts payable is money that you owe to external contractors.

Accounts receivable

Accounts receivable is money that customers owe you.

After-sales marketing

After-sales marketing refers to any activity intended to enhance customer satisfaction and build relationships with clients after they have made a purchase. If done successfully, it can increase brand loyalty and encourage repeat sales.

Allowable business expenses

Allowable business expenses are costs that HMRC allows you to deduct from your turnover when calculating tax, such as the cost of equipment and materials used by your business.

AML (anti-money laundering)

Financial organisations carry out AML checks to ensure that any money customers deposit in a bank account has not been acquired illegally.


Auto-enrolment refers to pension legislation that requires employers to offer certain staff the chance to sign up for a pension and to make contributions on their behalf. Find out how to manage your auto-enrolment.

Balance sheet

A balance sheet is a financial statement that shows a company’s net value. It lists the company’s assets (e.g. buildings, equipment, stock, money owed, etc) and liabilities (debts). The company’s net worth is calculated by subtracting total liabilities from total assets.


Brand refers to the identity of a company or product. It includes visual aspects (such as colours, typefaces and logos), as well as the tone, language and messaging used in advertising and other forms of communication. Brand is how people recognise companies and products and distinguish them from their competitors.

B2B (business-to-business)

B2B refers to any activity conducted between businesses, as opposed to between a business and the general public.

B2C (business-to-customer)

B2C refers to any activity conducted between a business and the general public, as opposed to between businesses.

Bricks and mortar

Bricks and mortar is a way of describing something that exists as a physical structure in the real world as opposed to a digital entity in a virtual space. For instance, high street shops are often described as bricks-and-mortar outlets, whereas online retailers operate digital stores.

Business bank accounts

Business bank accounts provide essential banking services, including allowing you to make and receive payments. They work in a similar way to standard current accounts and are vital for keeping business and personal transactions separate. In addition to business bank accounts, you can also get business savings accounts.  

Business credit cards

Business credit cards work similarly to personal credit cards, but where personal credit cards are in the individual's name, business credit cards are registered under the company's name. Find out more about business credit cards.

Business finance

Business finance is a catch-all term for the management and raising of funds needed to fuel company growth. This funding can include business loans, grants, investor injections, and even crowdfunding. Find out how to get funding for your business.

Business insurance

Business insurance refers to a range of cover designed to financially protect your company if something goes wrong. Popular types of business insurance include public liability, professional liability and employers' liability, but more niche products exist that can cover your tools or provide income support if you can’t carry out your business for some reason. Explore business insurance options.

Business plan

A business plan is a comprehensive document detailing your business. It encompasses objectives, strategies, sales, marketing and financial forecasts. It helps clarify business ideas, identify potential problems, set goals and measure progress. You need a viable business plan to secure business funding.

CapEx (capital expenditure)

CapEx refers to the money a company spends on one-off purchases that are expected to help generate revenue in the future. Examples of CapEx for a small business could be new machinery, tools or even furniture. (Compare with OpEx.)

Cash flow

Cash flow refers to the movement of money into and out of your business. You have a positive cash flow if you have more coming in than going out. You have a negative cash flow if your expenses are higher than your income.

Card reader

A card reader (or card payment machine) is a device used to process in-person credit and debit card payments for goods or services. In addition to the machine's up-front cost, you usually have to pay a transaction fee for every sale and sometimes monthly charges too.

Find out how to take payments from customers

Class 2 and Class 4 NICs

NIC stands for National Insurance contributions. Traditionally, self-employed individuals had two classes of contributions to consider: Class 2 and Class 4. However, the system has now changed. From 6 April 2024, Class 2 contributions are no longer compulsory but can be paid voluntarily by those with profits of less than £6,725. Class 4 contributions are mandatory for self-employed individuals with profits over £12,750. You can find out more on the GOV.UK site.

Corporation Tax

Corporation Tax is a tax paid by limited companies operating in the UK (as well as foreign companies with UK branches). Although the main corporation tax rate was raised to 25% from April 2023, small businesses with profits under £50,000 can pay the small profits rate, which is set at 19%.


E-commerce refers to buying or selling goods or services via the internet. It encompasses a wide range of transactions, including online shops, auction sites and digital marketplaces. Transactions are handled digitally rather than face-to-face.


ESG, which stands for environmental, social, and governance, is a way of measuring a company’s sustainability. Investment funds frequently scrutinise a company's ESG performance when looking for ethical companies to invest in.

Financial year

A financial year is an accounting period that lasts 12 months. While it often coincides with the UK tax year, which runs from 6 April to 5 April, it doesn’t have to. Some companies have financial (or fiscal) years that align with the calendar year (1 January to 31 December), while others are based on the date the business started.


His Majesty’s Revenue and Customs is a government agency responsible for collecting taxes, enforcing customs and excise duties and administering other tax-related matters, such as tax credits. It is generally referred to as HMRC or the Tax Office.

KPI (Key performance indicator)

KPIs are ways of measuring success. They are often used in marketing to assess whether a campaign has achieved its goals – for instance, increasing website visitors or sales enquiries – but can be used in any area where it is useful to set and measure progress towards specific objectives.

Limited company

A limited company is considered a legal entity distinct from its directors and shareholders. This means that if the company faces financial losses or issues, you, as an individual, aren't personally responsible. Limited companies are registered with Companies House and bear 'Ltd' after their name.

Find out more about limited companies vs sole traders

NI (National Insurance)

National Insurance is a tax on your earnings or, if you're a small business owner, on the profits you generate. Part of this tax helps pay for the NHS, while the rest goes into a fund that finances the state pension, jobseeker’s allowance and incapacity benefit. (See Class 2 and Class 4 NICs)

OpEx (operational expenditure)

OpEx refers to the ongoing, day-to-day costs of running a business – for example, rent, stationery, utility bills, wages, etc. (Compare with CapEx)


Overheads are business expenses that are not directly linked to manufacturing goods, purchasing stock or providing a service.

PAYE (Pay As You Earn)

PAYE refers to the system that HMRC uses to collect income tax from employees. In practice, it involves employers deducting money due for tax and National Insurance contributions from their employees' salaries before paying them. People often refer to this as being taxed at source.

Payment on account

Payments on account are advanced payments that go towards settling your forthcoming Self Assesment tax bill. This bill is based on HMRC's estimation of your taxable profits for the coming year. You have to make two payments on account each year, in January and July, unless your last Self Assessment tax bill was under £1,000 or you’re an employee who pays over 80% of your tax through PAYE.

Q1 - Q4 (Quarter 1 to Quarter 4)

In business speak, a quarter refers to a three-month accounting period. There are four quarters in each financial year – Q1 is the first quarter, Q2 the second and so on. Depending on the context, the first quarter may begin at the start of the calendar year in January, the start of the tax year in April or the start of a company’s financial year. (See financial year) 


Revenue is the money a business generates from the sale of goods or services over a fixed period.

Self Assessment

Self Assessment is a way for self-employed people to report their profits and pay tax and National Insurance to HMRC. 

Find out more about Self Assessment


According to HMRC, you’re considered to be self-employed if you "operate your own business as an individual and work for yourself."

Importantly, being self-employed means that any profits earned after taxes are your own, and you are personally responsible for any debts incurred in the course of your business. Legally, you and your business are regarded as one entity, meaning your personal and business assets are intertwined. (This is not the case with limited companies, which is why directors of 'Ltd' business are not referred to as self-employed.)

Once self-employed individuals start earning more than £1,000 per year from their business, they are required to register as sole traders. This is why the terms ‘self-employed’ and ‘sole trader’ are often used interchangeably, along with ‘freelancer’.

Find out more on the GOV.UK website.

SEO (Search engine optimisation)

Search engine optimisation aims to improve a website's visibility on search engines like Google. It uses techniques like keyword research, content optimisation and link building to attract visitors to the site.

Find out more about SEO and marketing your business

SMEs (small and medium-sized enterprises)

SMEs is a term used to distinguish between small companies and large corporate operations. The government defines an SME as “any organisation that has fewer than 250 employees and a turnover of less than €50 million or a balance sheet total less than €43 million.”

Sole Trader

A sole trader is a self-employed individual who runs their own business. Unlike a limited company, a business that is registered as a sole trader is not classed as a separate legal entity. This means their owners are solely and personally responsible for all aspects of the business, including any profits and debts. 

Find out more about sole traders and how they compare to limited companies


A start-up typically refers to firms that have been operating for three years or less. They can benefit from the government-backed Help to Start-up scheme and are eligible to apply for start-up loans. In America, the term start up is increasingly used to describe dynamic and innovative up-and-coming firms that are poised for rapid growth.  

Tax year

The tax year is the 12-month accounting period HMRC uses. It runs from 6 April to 5 April. (Compare with financial year)


In the UK, turnover often means the same thing as revenue. However, it can also refer to the rate at which a company cycles through resources or completes a particular activity. For example, it can relate to how many products a company sells over a specific period, how quickly its invoices are paid or how many employees it gets through.

VAT (Value Added Tax)

VAT is a tax imposed on goods and services. VAT-registered businesses add this tax to the price of their products and pass the resulting revenue to HMRC. You must register your business for VAT if you sell £90,000 of taxable goods or services in a year. You can find out more about VAT on the GOV.UK website.

Business insurance is a way to protect your company against financial risk if things go wrong.

About Karen Levell

Karen is a self-employed writer, translator, project manager and editor. Something of an all-rounder, she has worked for numerous consumer magazines and websites including specialist media brands covering computing, technology, gaming, TV, film, sports and crafts. In addition to her other roles, she also works behind the scenes as a project co-ordinator for Money and teaches jewellery-making as a side hustle. Karen lives in Oxfordshire with her husband, a boomerang step-daughter and a crazy dog called Stanley.

View Karen Levell's full biography here or visit the press centre for our latest news.