1. Business in the Real World Flashcards
Entrepreneur
A person who organizes, manages, and takes on the risks of a new business.
Qualities: Risk taker, leadership, Creative and resilient.
Opportunity Cost
The cost of the next best alternative foregone when making a decision.
e.g. If you choose to scroll on your phone for an hour, the opporunity cost is the time you could have spent revising for your exam.
Stakeholders
Individuals or groups with an interest in the activities and performance of a business (e.g., employees, customers, suppliers).
Sole Trader
A business owned and run by one person.
Partnership
A business owned by two or more people who share responsibility.
Limited Liability
A form of business ownership where the owner’s financial responsibility is limited to the amount they invested.
Franchise
A business based on the use of the brand name and business model of an existing successful business.
Such as McDonalds, Subway
Economies of Scale
Cost advantages that a business can achieve as it increases production.
e.g. Making a one off chair may be more expensive than making 10 because you can get a discount when you buy the materials (wood) in bulk.
Mission Statement
A formal summary of the aims and values of a company.
Business Plan
A document setting out a business’s future objectives and strategies for achieving them.
What is the formula for:
Profit
Total Revenue - Total Costs
What is the formula for:
Market share %
(Business Sales ÷ Total Market Sales) × 100
