As a freelancer, knowing every single business term probably isn’t on the top of your to-do list.

While you don’t necessarily need to know all of the terms, there are some that you should know.

Millo has a fantastic article that explains 6 different business terms, puts them in words you can understand, and then gives great examples of how they are used.

Production Capacity

The volume of services you can produce utilizing current resources.

In layman’s terms: How much work you can produce.

Example: There is a finite amount of work each of us can do – and therefore a finite amount of money we can earn. Eventually you’re going to hit that ceiling, officially called your production capacity.

When you do, you have to decide whether to outsource projects or portions of projects, charge more (everyone is clamoring after your services, after all), improve your productivity (if possible), or be satisfied with the maximum amount of money you can currently make.”

Check out the other 5 business terms you should know at Millo.