1.4 definitions

Question 1

entrepreneur

Answer 1

a person who sets up a business and takes on financial risk in the hope of profit

Question 2

royalties

Answer 2

percentage of the sales revenue to be paid to the overall franchise owner

Question 3

Franchising

Answer 3

paying a franchise owner for the right to use an established business name, branding and methods

Question 4

b2b

Answer 4

business to business

Question 5

b2c

Answer 5

business to consumer

Question 6

cashflow forecast

Answer 6

plan cash inflows cautiously

and out flows on the high side

Question 7

target market

Answer 7

focus on the market trends rather than size

Question 8

business plan

Answer 8

a detailed document setting out the marketing and financial thinking behind a proposed new business

Question 9

private limited company

Answer 9

a small family business in which shareholders enjoy limited liability

Question 10

limited liability

Answer 10

restricting the losses suffered by owners to the sum they invested in the business

Question 11

unlimited liability

Answer 11

an individual responsible for all the debts of a failed business

Question 12

sole trader

Answer 12

a business run by one person, that person has unlimited liability

Question 13

bankrupt

Answer 13

when an individual is unable to pay their debts, even after all personal assets have been sold for cash

Question 14

price

Answer 14

how much customers pay

Question 15

place

Answer 15

the point where products are made and are available to customers

Question 16

promotion

Answer 16

how customers are informed about products

Question 17

product

Answer 17

the features and appearance of goods and services

Question 18

marketing mix

Answer 18

the combination of factors which help a business sell a product. This is known as the 4 p's
price
place
promotion
product

Question 19

dividends

Answer 19

a payment that a shareholder gets if the company makes a profit

Question 20

partnership

Answer 20

a business ownership structure in which a small number of people own an unincorporated company

Question 21

stock market

Answer 21

a market where shares of public limited companies can be bought and sold

Question 22

shareholder

Answer 22

any person that owns shares in a company and therefore own part of it.

Question 23

Incorporated

Answer 23

the process of becoming a corporate body.

meaning the business has a separate legal entity from is owner