Business: keywords
Good
a physical product, such as a car
A service
An intangible product, such as financial advice or a bus journey.
A customer
someone who buys a product from a business
A consumer
Someone who uses goods and services produced by businesses
An entrepreneur
Someone who is willing to take the risks involved in starting a new business
Entrepreneurship
Refers to the ability to be an entrepreneur.
A social enterprise
A business that is set up to help society rather than to make a profit.
Factors of production
The inputs that are used to provide goods and services ( land, labour, capital and enterprise)
An enterprise
Another word for a business. It also refers to the skills of the people involved in the business to identify business opportunities and bring together resources to meet these opportunities.
Opportunity cost
The alternative that is given up whenever a decision is made to use resources in a particular way.
Interest
The money paid by banks as a reward to attract people to save with them.
The primary sector
Refers to organisations that extract the earth's natural resources.
The secondary sector
Refers to organtisations that use raw materials to manufacture goods or contstruct items.
The tertiary sector
Refers to organisations that provide services to consumers or other organisations
Interest rates
Refers to the cost of borrowinf money or the reward for saving money, expressed as a percentage
Inflation
Refers to the rate at which prices are increasing.
GDP
Gross Domestic Product - measures all the income earned in a country's economy in a year.
Demand
The amount of a product that customers wish to purchase at the current price over a period of time.
A sole trader
someone who sets up in business on his or her own.
Profit
Measures the difference between the values of a business's total revenue ( sales) and its total costs.
Profit = total revenue - total costs
Unlimited liability
The personal possessions of the owners of a business are at risk of being used to settle the business's debts. There is no limit to the amount of money the owners may have to pay out.
A partnership
Occurs when two or more people join together in a business enterprise to pursue profit.
A deed of Partnership
A deed of partnership is an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partneryship will be valued if someones wants to leave.
Stakeholders
Stakeholders are individuals and organisations that are affected by, and affect, the activities of a business.
A company
A company is a business that has its own legal identity. It can own items, owe money, sue and be sued.
A shareholder
A shareholder is a person or organisation that owns a 'share' of a company.
Limited liability
Limited liability exists when the owners' responsibility for the business's debts is only the amount they invested
Ltd
A private limited company is a business owned by its shareholders whose shares cannot be freely traded on the Stock Exchange.
plc
A public limited company is a large business owned by its shareholders and its share can be sold freely on the Stock Exchange.
The Stock Exchange
The stock exchange is a market for buying and sellings ahres of public limited companies. Large numbers of shares are being bought and sold all the time.
A flotation
A flotation occurs when a private limited company becomes a public limited company and has its shares listed on the stock exchange.
Directors
Directors are appointed by shareholders to lead the management of the company.
A share issue
A share issue occurs when a company sells additional share in the business.
A not-for-profit organisation
A not for profit organisation is set up to achieve objectives other than profit.
An asset
An asset is something that is owned by a business. Examples include land, buildings, vehicles and machinery.
Social objectives
Social objectives are the goals of a business intended to help society in general or specific groups of people.
An aim
An aim is a general goal of a business.
An objective
An objective is a specific target that is set for a business to achieve.
Management
Management is planning, organising and controlling a business.
Survival
Surivival is a business objective which requires the business to be able to continue trading.
Profit maximisation
Profit maximisation is an objective of businesses to achieve the largest possible surplus of revenues over expenditures.
Shareholder value
Shareholder value is the financial benefits received by a company's shareholders and can take the form of rising share prices and dividends paid.
Customer satisfaction
Customer satisfaction is the extent to which customers are pleased with the products they have bought and whether they would make repeat purchases.
Ethical objectives
Ethical objectives are targets set by a business to help it to ensure that its decisions are morally correct, for example in treating its staff fairly.
Private sector organisations
Private sector organisations are owned by indivividuals.
Public sector organisations
Public sector organisations are owned by the government.
The owners
The owners are the indivduals or organisations to whom a business belongs. In the case of a company they are the shareholders.
Dividends
Dividends are the part of a company's profits paid out to shareholders each year.
Employees
Employees are those people who work for a business.
Suppliers
Suppliers are individuals or businesses that provide goods or services to businesses.
A local community
A local community is the people and organisations in the area surrounding a business.
Negotiation
Negotitaion occurs when two sides discuss what they want to try to reach a solution.
Location
Location is the site or sites on which a business is based.
Proximity to the market
Proximity to the market refers to how close the business is located to its customers.
Raw materials
Raw materials are products such as oil, steel and cotton which are used in the production of other goods.
Protectionist measures
Protectionist measures are policies that governments use to protect their own businesses against foreign competition.
A tarrif
A tarrif is a tax on foreign goods imported into a country.
Imports
Imports are goods and services purchased from overseas by consumers of businesses.
A quota
A quota is a limit on the number of foreign goods imported into a country.
A business plan
A business plan is a document setting out what a business does and what it hopes to achieve in the future.
Business planning
Business planning is the process of producing a business plan.
A loan
A loan is an amount of money provided to a business for a stated purpose in return for regular repayments including interest charges
Uncertainty
Uncertainty occurs where there is a lack of information about a situtation. This means the outcome or consequences are very diffcult to predict.
A risk
A risk is the possibility of something going wrong.
Revenue
Revenue is the income that a firm receives from selling its goods or services. It is also referred to as a turnover. it is measuresd by the number of units sold multiplied by the price. Sales x Price
Total costs
Total costs are the fixed costs plus variable costs.
Total costs = fixed costs + variable costs.
Variable costs
Variable costs are the costs that vary directly with the business's level of output.
Business expansion
Business expansion occurs when an enterprise becomes bigger by increasing its output and sales.
Internal growth
Internal growth is also known as organic growth. This occurs when a business gets bigger by selling more of its products.
Organic growth
Organic growth occurs when a business increases its production and the sales of its products.
External growth
External growth occurs when a business gets bigger by joining or buying other businsses.
Integration
Integration is the process by which two or more businesses join together.
Market capitalisation
Market capitalisation of a company measures the values of all its shares. Market capitalisation = market price of a share x the number of shares.
A franchise
A franchise occurs when a franchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage of turnover.
A franchisee
A franchisee buys a franchise usually in return for a fee and percentage of turnover.
Franchising
Franchising occurs when one business sells the right to another business to use its name and sell its products.
A franchisor
A franchisor sells a franchise usually in return for a fee and percentage of turnover.
A channel of distribution
A channel of distribution describes the way in which ownership of a product is transferred from the producer to the consumer.
E-commerce
E-commerce is the act of buying or selling a product using an electronic system such as the internet.
Outsourcing
Outsourcing occurs when a business uses another business to produce for it.
A merger
A merger occurs when two or more businesses join together to form a new business.
A takeover
A takeover occurs when one businesses buys control of another one.
Economies of scale
Economies of sacle occurs when a businesse's unit costs of production fall as its output rises and business expands.
Diseconomies of scale
Diseconomies of scale occurs when the cost per unit increases as a business expands.