20 common business acronyms every new startupper should understand

February 3, 2017
3 min read

Business acronyms have now become part of our everyday lives. However, some of us still struggle to understand the meaning and usage of these buzz words. If you are currently working with a startup or thinking in that direction, it is pertinent that you understand some of these business acronyms.

B2B – Business to Business

This refers to a transaction between businesses rather than between a business and a consumer. A typical example is transactions between a wholesaler and a retailer.

B2C – Business to Consumer


This is business transactions between a company and the end-user of its products.  This term is also used to describe online retailers or companies that sell products and services directly to consumers via the internet.

IPO – Initial Public Offering

This is the first sale of stock by a private company to the public. It is also known as stock market launch.

ISP – Internet Service Provider

This is a company that provide internet access to individuals and companies

KPI – Key Performance Indicators

This is a type of performance measurement that evaluates the success of an organization or an activity it engages in.

MSRP – Manufacturer’s Suggested Retail Price

Also known as recommended retail price (RRP) or suggested retail price (SRP), this is the amount of money the manufacturer of a product recommends the product be sold for in retail stores. The aim is to standardize prices in all locations but this may not be the price consumers pay in the end.

NDA – Non-Disclosure Agreement

This is a legally binding contract between at least two parties that outlines confidential material, knowledge, or information that should not be shared with a third party. It is also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA)

QC – Quality Control

This is a procedure or set of procedures put in place to ensure that a manufactured product or service rendered adheres to a defined set of quality criteria.

QA – Quality Assurance

This is a procedure or set of procedures designed to ensure that a product or service under development (before completion) meets specified requirements.

ROI – Return on Investment

This is a measuring tool investors used by investors to determine how well their investment in a particular company is faring. It helps investors make important decisions like whether to undertake an investment or not

R & D – Research and Development

This refers to the investigative activities conducted by a business to improve existing products and procedures or to lead to the development of new products and procedures.

OEM – Original Equipment Manufacturer

This a company that manufactures equipment's that are eventually re-branded and sold by other companies. Sometimes this term applies to the reseller as well.

POS – Point of Sale

This is the checkout point or cashier counter in retail stores. It can also apply to the hardware and software used at point of sale locations including electronic cash register systems, touch-screen display, barcode scanners and receipt printers.

FIFO – First in, First Out

This term is used both in computer programming  and accounting; it assumes that what comes first is handled first

LIFO – Last in, First Out

This term is used both in computer programming and accounting; it assumes that what comes last is handled first

VC – Venture Capital

A form of financing provided by investors to start-up companies  or small businesses that are deemed to have long-term growth potentials

SMEs -Small and Medium-sized Enterprises

These are business whose personnel numbers and turnover or balance sheet total fall below a certain limit.

CSR- Corporate Social Responsibility

This is a corporation's  initiatives to assess and take responsibility for the company's effects on environmental and social wellbeing. The corporation engages in actions that further some social good, beyond the interests of the firm and what is required by law.

CAC - Customer Acquisition Cost

Customer acquisition cost is the cost associated with convincing a consumer to buy a product or service. This cost is incurred by the organization and includes research, marketing, and advertising costs. It is a metric used to analyze return on investments(ROI) of acquisition and the value of the customer to the company.

XaaS - Everything as a service

Also known as "X as a service,"  or "anything as a service"  this term refers to the growing diversity of services available over the internet via cloud computing rather than being provided locally, or on site. Some of these services delivered to organizations via the internet include software (Software as a Service (Saas)), Communications (Communications as a service(CaaS)) and storage as a service.

Writer. Interested in EdTech and tech careers
Writer. Interested in EdTech and tech careers
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