3.1.1 - what is business? Flashcards
why do businesses exist?
create new products, create employment, create wealth, enhance a country’s reputation
what’s the difference between a B2B business and a B2C business?
B2Bs sells goods/services to other businesses.
B2Cs sells goods/services to consumers.
what is the primary sector?
the extraction of raw materials
what is the secondary sector?
transforming raw materials into finished goods
what is the tertiary sector?
providing services such as retailing, transport and banking
what is a mission?
the overall aim of the business/reason for its existence.
what is a business objective?
a measurable target that will help achieve the mission.
what are the 6 common business objectives?
profit, cash flow, growth, survival, diversification and social/ethical.
what does SMART stand for?
Specific, Measurable, Achievable, Realistic, Time-bound.
why are business objectives set?
managers can ensure that everyone is working towards the same goal, to motivate employees, to revue the success of a business’ plans, managers can measure achievement
what is revenue?
the income a business receives in return for the sale of goods and services
what are fixed costs?
costs which do not vary directly with the level of output
what are variable costs?
costs which vary directly with the level of output
what is profit?
the difference between costs and revenue
