1.5 Business key terms Flashcards
entrepreneur
an individual who sets up and runs a new business and takes on the risks accossiated with the business
intrapreneur
employees who use entrepreneurial skills, without having to risk their own money, to find and develop opportunities that will have financial benefits for their employers
profit maximisation
an attempt to make as much profit as possible in a given time period
profit satisfaction
making enough profit to satisfy the needs of business owner(s)
aims
what a business tries to achieve in the long term
objectives
the goals or targets set by a business to help achieve its long term purpose
sales maximisation
an attempt to sell as many goods and/or services in a given time period (to generate as much sales revenue as possible in a given time period)
articles of association
a document that provides details of the internal running of a limited company
certificate of incorporation
a document that declares a business is allowed to trade as a limited company
co-operative
a business organisation owned by its members, who have equal voting rights
deed of partnership
a binding (an agreement involving an obligation that cannot be broken) legal document that states the formal rights of partners
franchise
when a franchisor grants a licence (franchise) to another business (franchisee) to allow it trade using the brand / business format
lifestyle business
a business that aims to make enough money and provide flexibility needed to support a particular lifestyle for the owner
limited company
a business organisation that has separate legal entity from that of its owners
limited liability
a legal status which means that a business owner is is only liable for the original amount of money invested in the business
limited partnership
a partnership where some members contribute capital and enjoy a share of profit, but do not participate in the running of the business
at least one partner must have unlimited liability
unlimited liability
a legal status which means that the owner of a business is personally liable for all business debts
private limited company
a company whose shares are not sold on the stock exchange market, but can be sold to friends and family (external source of finance)
memorandum of association
a document that sets out the constitution and states key external details about a limited company these include: - company's name - name of its members - location of its registered office
mutual organisation
a business owned by its members, who are customers not shareholders
online business
a business that uses the global communications infrastructure of the internet as a trading base
partnership
a business organisation that is usually owned by between 2-20 people
primary sector
production involving the extraction of raw materials from earth
secondary sector
production involving the conversion of raw materials into finished and semi-finished goods
tertiary sector
the production of goods and services in the economy
sleeping partner
a partner that contributes to capital ad enjoys a share of the profit, but takes no active role in running the business
social enterprise
a business that trades with the objective of improving human or environmental well-being
- charities
- workers’ co-operatives
sole trader/sole proprietor
a business organisation that has a single owner
private equity company
a business usually owned by private individuals backed by financial institutions
public limited company
a company owned by shareholders where the shares can be traded openly on the stock exchange market
stock market
a market for second hand shares
stock market flotation
or
initial public offering (IPO)
the process of a company going public - making shares available to the public on the stock exchange market for the first time
(from ltd to plc)
choices
in business, deciding between alternative uses of resources
opportunity cost
when choosing between different alternatives, the opportunity cost is the benefit lost from the next best alternative to the one that has been chosen
(represents the benefits that could have been gained by taking a different decision)
trade-off
where a decision maker faces a compromise between two different alternatives - in which both cannot be achieved, having more of one thing results in having less of the other
e. g.
- choosing not to invest into proper market research in order to reduce costs, the trade off is the product being less successful as consumers needs and wants were not met adequately
