3.1.1 - - Understanding the nature and Purpose of business Flashcards
What is a business?
A business is an organisation that exist to provide goods and services on a commercial basis to customers
What is the relationship between mission and obectives?
A mission shares the purpose of the business and its objectives are short term steps or strategies that are made in order to achieve longer term aims.
Name a common business objective
Anticipated end results of a programme activity.
Why do business’s set objectives?
They set them to enable them to achieve their mission.
What are the measurements of profit?
Revenue, Total variable costs, profit, Total costs and Break Even
Revenue Calc
Selling price x no. units sold
Total Variable Cost Calc
Variable costs per unit x units sold
Profit Calc
Total Revenue – Total Costs
Total Costs Calc
Variable costs + fixed costs
Break Even Calc
Fixed Costs / Selling price- variable cost per unit
What are the most effective objectives?
Those that are SMART Objectives
