Chapter 1
Profit
The income or revenue left over after all costs and expense are paid.
Revenue
The money a business receives for products and services or from investments.
Expenses
The expenditures involved in the running of a business.
Costs
The total ammount to produce a product or service.
Solvency
The ability to pay all debts and grow your business.
Non-profit
Does not seek profit, but instead raises money for a specific goal. They operate for the good of the community. (Charities)
Profit Formula
Revenue - Expenses = Profit
Not for profit
Does not seek profit. Any surplus funds are used to improve the services offered. Involves a specific group of indoviduals with the same goal.
Co-operative
An indepent association of persons who come togther in order to meet a specific goal. They do this by creating a joilty owned and democratically contirlled business.
Franshise
An of shoot of a larger company that runs under the same business plans. They have a formal relationship with the franchisor. They are the franchisee.
SMB
Any business that in not a SOHO(Small ofiice, Home office), but employs fewer than 500 people.
Goods
An item that can be seen an touched
Sevices
Assitance provided in return for payment. It satifies needs and wants.
Producer
An individual or business that makes a product
Consumer
A person who uses the purchased items or goods.
Marketplace
Any location where producers and consumer come together to engage in the buying and selling of goods
Competition
A situation in which two or more busnesses try to sell the same type of product or service to the same customer.
Obsolete
A product or sevices that customers no longer need or want.
Skimming
A products pricing strategy by which a business charges the highest initial price and lowrers it over time.
Pricing power
When businesses are in control of the price or the product.
Purchasing power
The value of a currency expressed in the amount of goods or services the unit of money can buy.
Consumer purchasing power
When consumersbhave the power to choose where they will buy goods and srvices and how much they will pay for them.
Entrepreneurs
A person who takes risks. Someone whi provides and innovative produxct or services satisfying consumer needs and wants.
Needs
Items needed for survival
Wants
Items that provide pleasure
inventory
Goods and materials kept on hand
Decision maikng model
A 5-step procedure that assists in making the most appropriate choice among competing alternatives.
Economic resources
The meansbthrough which good and services are made available to Consumers.
Natural Resources
The rawaterials that we get from the earth the water and the air.
Human Resources
People who workto produce goods and services aka Worforce or Labour
Capital Resources
A resources such as equipment, a building, or money, that is used to produce goods and services.
Interdependence
Businesses that rely on one another
Economic System
The ways business work together
Demand
The quantity of a good or service that consumers are willing and able to buy.
Law of Demand
The principle the when demand goes up price comes down, and demand goes down when price comes up.
Supply
The quantity of a good or service that producers can provide
Law of supply
The principle the supply goes up when prices goes up and comes down when orice goes down.
Price
the value of a product or service expressed in currency.
Economy of sale
The cost advantages companies gain from increasinh their output