1-what is a business?

Question 1

goods

Answer 1

physical or tangible products

Question 2

services

Answer 2

non physics or intangible items

Question 3

B2B-business to business

Answer 3

one business selling products/services to another

Question 4

B2C-business to consumer

Answer 4

one business selling products/services to consumers

Question 5

business

Answer 5

an organisation that makes goods or provides services to satisfy customers needs

Question 6

transformation process

Answer 6

transformation of inputs into outputs. this process adds value to inputs

Question 7

added value

Answer 7

amount added to the value of inputs or to a product or services

Question 8

4 key factors

Answer 8

land, labour, capital, enterprise

Question 9

primary sector

Answer 9

extract or develop natural resources

Question 10

secondary sector

Answer 10

make use of extracted primary materials to build, manufacture or develop finished goods

Question 10

mission statement

Answer 10

written statement of a business’ purpose, reason for existence and long term vision

Question 10

tertiary sector

Answer 10

provide the services needed to meet the needs of the end users

Question 10

corporate objectives

Answer 10

target or goals for the business as a whole that are set to achieve its mission

Question 11

cash flow

Answer 11

movement of money in and out of the business

Question 11

functional objectives

Answer 11

targets or goals for the business set for each business function

Question 11

an effective mission statement

Answer 11

differentiates the business from its competitors
defines the market or business in which the business wants to operate
is relevant to all major stakeholders,
excites, guides and motivates

Question 12

objectives

Answer 12

targets that help a business achieve its mission, set at various levels

Question 13

smart objectives meaning

Answer 13

specific, measurable, agreed, realistic, time bound

Question 14

profit maximisation

Answer 14

try to make the most profit possible to reward the owners, investors or shareholders

Question 15

short termism

Answer 15

arises when a business prioritises short term profit rather than long time performance

Question 16

profit satisficing

Answer 16

try and make enough profit to keep the owners comfortable

Question 17

sales growth

Answer 17

where the business tries to grow in size to make as many sales possible- objective is to become a large business to be able to benefit from economies of scale

Question 18

cash flow

Answer 18

having sufficient reserves of money immediately available to pay day to day debts

Question 19

ethics

Answer 19

when setting objectives some businesses ensure that stakeholders and the environment are not harmed by the business’ activities

Question 20

social

Answer 20

some businesses are run to not only generate a profit but to provide a service to the public- this service will need to meet the needs of the less well off in society

Question 21

profit

Answer 21

amount of money left once all costs have been payed- profit=revenue-total costs

Question 22

revenue

Answer 22

money received from sales- num of units x price of 1 unit

Question 23

variable/direct costs

Answer 23

costs that vary with the level of output

Question 24

total variable costs

Answer 24

num of units x variable/direct costs per unit

Question 25

fixed/direct costs

Answer 25

costs that dont vary with level of output

Question 26

total costs

Answer 26

fixed costs+total variable costs