Business Terms You Must Know Before You Start
¡Conectemos!
8 Business Terms You Must Know Before You Start
Hello awesome human, are you ready to get shit done!
Here’s a real secret about entrepreneurship that most of your college professors won’t tell you…
You don’t need an MBA. You need to move.
I am so, so, so grateful for the years it took me to get my marketing degree. Seeing the tears of my mother being so proud that her son graduated — that meant more than you will ever know.
But here’s the truth:
The road to entrepreneurship? It can be a dark, lonely, and uncertain place.
Even after college.
There were so many things I wish I had understood — and had someone or something to be a guide to me when it felt like no one else could.
That’s why YOU are here.
And I’m here to tell you:
Before you jump into your first product launch, first sale, or your first “What the hell am I doing?” moment — learn these 8 terms.
Not from a professor.
From someone who’s built brands, lost sleep, and still showed up the next day.
If you want to run your business like a BUSINESS, burn these into your brain.
Let’s do this. 💥
1. Profit Margin
Example: You sell a bag of coffee for $20. It costs you $10 to make. Your profit is $10. Your profit margin is 50%.
Why it matters: A high margin means more cash in your pocket. A low margin? You’re working hard for pennies. Know your numbers or get played by them.
Now think about something like a Coquito Latte at 787 Coffee.
It’s not just about how good it tastes — it’s about how well it performs as a product to our caffeinated humans.
Behind the scenes, every item on the menu gets analyzed — not just for flavor, but for profit margin. That means digging deep into ingredient costs, packaging, labor, overhead — all the invisible stuff that adds up fast.
our WOW drinks might be wildly popular, but if the margin is slim, it won’t grow the business.
But if something tastes amazing and earns a strong margin? That’s gold.Bottom line: Profit margin isn’t just about math — it’s about perceived value.
I could say McDonald’s is “too expensive” for me personally — not because of the price, but because of how it makes me feel afterward.
For someone else? It’s an affordable, filling meal that gets them through the day.That’s huge.
Your customer’s perception of value directly affects your ability to price — and affect your profits.
2. Burn Rate
What it really means: How fast you're spending money.
Example: If your business costs $5,000 a month to run and you're not making any money yet, your burn rate is $5,000/month.
Why it matters: If you don’t know your burn rate, you don’t know how long you’ve got before the money runs out. Most businesses die not from lack of ideas — but lack of available resources.
Real-world Example: Quibi
In 2020, Quibi — a short-form video streaming app — raised $1.75 billion before launch. It had major Hollywood backing, big-name stars, and a flashy launch plan.
But its burn rate was brutal. Millions were being spent monthly on marketing, salaries, and content. Yet… they had no traction. User growth stalled. People didn’t stick around.
Within just 6 months, Quibi shut down — despite having nearly $1 billion still in the bank. Why? Because their burn rate outpaced their ability to course-correct. They couldn’t pivot fast enough, and the cash was flying out the door.
EXTREMely Important: Money in the bank doesn’t mean security — not if you’re burning through it with no return.
Burn rate is all about allocating your funds properly to have more time for your business to run.
3. Operating Expenses (OPEX)
What it really means: The everyday costs of running your business.
Example: Rent, salaries, marketing, software, supplies, inventory. These are your operating expenses — the money it takes just to stay open.
Why it matters: If you don’t track your numbers, they’ll quietly kill your business.
Keeping your operation tight, and knowing your expenses gives you breathing room when things get tough.
Ruthless budgeting for an entrepreneur is a skill, not a punishment.
This is where young entrepreneurs — or those who reach success early on — either become cautionary tales or build legacies.
I’ve seen it too many times.
Money starts coming in.
You feel like you’ve earned the right to relax. Sit back. Sip piña coladas. Soak up the sun.
Living la vida loca like Ricky Martin.
But if you don’t have the discipline to budget and respect the humans who pay your bills, YOUR REAL BOSS, the customers that support your business, pay your teams salaries, puts money for your rent, and gives YOU the dream life. You’ll lose it all faster than it took you to get there.
Real-World Examples
Let’s talk about people who had it all — and lost it, fast.
Mike Tyson made over $400 million. Mansions, cars, tigers, jets, an entourage the size of a small village. His OPEX was insane. He filed for bankruptcy in 2003.
MC Hammer was pulling in $30 million a year. But with 200 people on payroll, luxury everything, and no brakes on his spending — he lost it all.
Johnny Depp reportedly spent $2 million a month — including $30K on wine and $300K on a 40-person staff. His team warned him. He didn’t listen. By the time it hit court, the damage was done.
They had enough to be set for life.
But operating expenses ate it alive.
It’s not about the money, the money will come. As long as you put humans 1st. Your customers 1st.
4. MVP (Minimum Viable Product)
What it really means: The simplest version of your product or service that actually solves a problem.
Not perfect.
Not pretty.
Make shit happen — by real people, with real feedback, in the real world.
Why it matters:
A lot of people get stuck in “build mode.”
They spend months (or years) trying to perfect the product, the logo, the brand, the packaging, the website…
But here's the truth:
someone else is going to launch YOUR idea, by then, you launched too late.
Your MVP is not your dream version.
It’s the starting version.
It’s what gets you in the game fast — so you can see what actually works.
Real-world example:
Before Uber had a slick app, they were just texting people black car drivers in San Francisco.
Before Airbnb had a global platform, the founders were literally renting out an air mattress in their apartment to pay the rent.
Those were MVPs. Not the most polished or ideal version that we known them today. but they worked.
Focus on either being the solution or developing the solution to your customers problems.
The image will come later.
Perfection is the enemy of progress.
You don’t need more time — you need more action, and get feedback.
Because feedback doesn’t come from your head. It comes from jumping in the water with no floaties.
Fall fast, but get back up faster. This is how you level up.
That’s how real businesses grow.
5. ROI (Return on Investment)
What it really means: Did it pay off?
Example: You spend $100 on ads. You make $300 in sales. Your ROI is 200%.
Why it matters: Every dollar you spend should have a job. If it’s not bringing value back — cut it.
Let’s break it down like Monopoly:
You land on Boardwalk, and you decide to buy it for $400
Now fast forward — a few turns later, someone lands on your property, and they owe you $100 in rent. Then another player hits it… again and again.
Suddenly, you’ve made back your $400 — and then some.
That’s ROI.
You made an investment (buying the property), and over time, it paid you back more than you spent.
Let’s say now no one landed on it and you made nothing…
Then that was a Bad ROI. You tied up your cash for no return.
If your money isn’t working for you, you have to pivot your strategy.
ROI helps you measure whether your actions are actually building your business.
Everything is money. From your lights, your team, tables, dish water. EVERYTHING has a cost.
Ask yourself:
"Is this providing value — or just draining money?"
If it’s not delivering, let it go.
6. Customer Acquisition Cost (CAC)
What it really means: How much it costs you to get one paying customer.
Example: You spend $500 on ads and get 10 new customers.
That means each customer cost you $50 to get. That’s your CAC.
Why it matters:
Let’s say you make $30 profit from each customer, but you invested $50 to acquire customers
from marketing and adds
You’re not making money. You’re losing it.
Do that long enough, and your business will run out of money — fast.
Real-World Example: Blue Apron
When Blue Apron launched their meal kit delivery service, they were everywhere — Instagram, podcasts, YouTube ads, subway billboards.
They were spending millions to get customers through the door.
In fact, at one point, Blue Apron was spending over $400 just to get one new customer.
That might sound fine — but here’s the problem:
Each customer was only worth about $250–$300 to them.
So every time they got a new customer, they were losing money.
Even worse — a lot of those customers did not come back. They tried it once and never came back.
That made their CAC (Customer Acquisition Cost) too high and their profits too low.
What happened?
Blue Apron went public in 2017 with a big valuation… and then crashed.
They couldn’t lower their CAC fast enough.
They were stuck in a cycle of spending more to get customers than they were earning from them.
Bottom line:
If it costs more to get a customer than you make from them — you're not making money.
You’re just spending it.
The best rule of thumb to avoid this is create an organic, loyal customer base by creating value and genuine care for customer needs.
If it costs more to get them than you earn from them, that’s a problem.
Focus on one customer at a time. Reputation earns more in the long term than a quick sale.
7. LTV (Lifetime Value)
What it really means: How much a customer is worth over time.
Example: If your average customer buys from you 5 times at $40 each, their LTV is $200.
Why it matters: Focus on keeping your customers, not just getting them. A loyal customer prints money.
Real-World Example: Howard Schultz and Starbucks
When Howard Schultz bought Starbucks in the 1980s, it wasn’t the giant we know today.
It was a small coffee bean shop in Seattle.
But Schultz didn’t just see coffee —He saw a lifestyle. A daily habit.
A brand people would return to again and again.
He focused on creating a place that felt like a “third home” — not just a transaction, but an experience.
He knew that if people came in once, they’d come back again.
And over time, those repeat visits would be worth way more than one big sale.
Why this worked:
The average Starbucks customer doesn’t just come in once.
They might stop by 3–4 times a week, spend $5–10 each time, and stay loyal for years.
That means one happy customer could easily bring in hundreds or thousands of dollars over their lifetime.
That’s LTV.
Shultz genius was that he believed in the power of what I call the human element. He cared more for experience and developing relationships, that over time built deep trust with his customers.
This is the ultimate responsibility to any entrepreneur.
8. Break-Even Point
What it really means: When your business starts paying for itself.
Example: If it cost you $10,000 to start and you’ve made $10,000 in profit, you just broke even.
Why it matters: Every founder needs to know when they’re out of the red and into the green. It’s your first major milestone. Celebrate it.
Real World Example: Spanx by Sara Blakely
In 2000, Sara Blakely launched Spanx with just $5,000 of her own savings. No business degree, just the courage to bet on herself.
She used that money to:
Create a prototype
Patent her design
Build basic packaging
And get her product on shelves at Neiman Marcus
She was strategic with every dollar — no fancy office, no huge ad budget, all on her own.
Her goal? Break even. Fast.
By making early sales and reinvesting profits to spanx,, she reached her break-even point quickly — covering her startup costs without debt or outside funding.
From there, everything she earned became reinvested to grow her empire.
She kept reinvesting into inventory, marketing, and distribution — all without raising a single dollar of outside capital.
Why it worked:
Sara didn’t scale first and hope for profit later. She made sure her product paid for itself early.
And once she hit that break-even point, she had freedom.
No loans. No pressure from investors. No debt to dig out of.
Just momentum.
Fast forward:
Spanx became a billion-dollar brand
Sara became the youngest self-made female billionaire in the U.S.
And she did it debt-free
You don’t necessarily need to knock on doors, or go to Wall Street and ask for a venture capitalist to loan you money. You just need to believe your solution is valuable enough your customers will use it.
The key is knowing your audience, understanding their needs, and strategically planning and reinvesting in your business — so you can breathe easier and move on to the next project.
Your Future Starts Now.
Starting a business isn’t about knowing everything. It’s about knowing the right things
There are so many other things that you will learn along the way in your steps to building your business,
but these 8 points well get you ready for what is to come
Take action. Make mistakes, but make progress.
many of the top CEOs I have been honored to get know aren't always the ones with perfect plans —
They're the ones who show up, stay hungry, and figure shIT out along the way.
So don’t wait to feel ready. Be real. Be resourceful. Be relentless.
These are building blocks to understand this journey of entrepreneurship. You got this.
Let’s build something legendary.
Let's get to work. 💯
Want the insider playbook that's helping thousands build wealth without traditional degrees?
Every two weeks, I share the exact strategies, mindset shifts, and real-world tactics that successful entrepreneurs use to create financial freedom—including interviews with millionaires who started with nothing but ambition.
Join 15,000+ game-changers getting the SoyBrandon newsletter. No fluff. No theories. Just proven methods that work.
[Subscribe free here →] Because your breakthrough moment could be in the next email.
3 Easy Steps to Apply CEO Thinking in Your Life Right Now
Step 1: Create Your Personal Vision & Communicate It Just like a CEO needs a clear company vision, you need to know where YOU'RE going. Write down what you want to achieve in the next 1-3 years (school, work, relationships, personal growth) and make it specific. Then start talking about it! Share your goals with friends, family, teachers, or coworkers. When you can clearly explain your vision and get others excited about supporting you, opportunities start showing up. Whether you're applying for college, looking for a job, or starting a side hustle, people want to help humans with clear direction and passion.
Step 2: Take Full Ownership of Your Problems Stop making excuses and start looking for solutions. Bad grade on a test? Don't blame the teacher—figure out how to study better next time. Drama with friends? Address it directly instead of talking behind their backs. Not getting the opportunities you want? Ask yourself what skills you need to develop or what actions you need to take. CEOs can't pass the buck, and neither can you if you want to level up your life. Every problem is a chance to prove what you're made of.
Step 3: Invest in Others & Build Your Team Success isn't a solo game. Start helping classmates with projects, mentoring younger students, supporting your friends' goals, or volunteering in your community. When you genuinely care about other people's success and push them to be their best, they'll do the same for you. Build relationships with teachers, coaches, mentors, and peers who share your values and ambition. Your "team" might be study partners now, but these relationships often become your business partners, job references, and lifelong supporters later.
The bottom line: Start thinking like a leader now, even if you're not "in charge" of anything yet. These habits will set you apart and prepare you for bigger opportunities.
Let’s simplify the concepts:
A CEO is like the main player in a huge, multiplayer video game. Their job is to guide the team and make sure everyone works together to win.
Setting the Quest: The CEO decides the main quest or mission for the game. Are they trying to rescue a princess, build a giant city, or defeat a dragon? That's the company's vision and strategy. They set the goal so everyone knows what they're fighting for.
Building the Team: The CEO can't do it alone. They're in charge of finding all the best players for the team—the warriors, the healers, the mages—and making sure they all have the best gear to do their jobs. This is like hiring top talent and creating a great company culture.
Managing the Gold: In every game, you need money to buy stuff. The CEO is in charge of the team's gold and coins. They make sure there's enough to pay for all the gear and power-ups, and they make smart choices about where to spend it to get the biggest advantage. This is like managing the company's finances and securing funding from investors.
Making the Big Moves: The CEO has to make the most important decisions in the game. Do they go left or right? Do they attack the monster or try to sneak past? These are the big calls that can change everything. They listen to what the other players say, but ultimately, they have to press the button to make the final move.
Being the Team's Face: When the game is in the news, the CEO is the one who talks to everyone and tells the world how awesome their team is and what they're trying to accomplish. They're the face of the company, like the main character on the cover of the video game box.
The CEO is the leader of the game, making sure the team is ready for anything and that they have what it takes to WIN!