Business Basics Flashcards
What is a business?
a person’s regular occupation, profession, or trade
What do businesses do?
Businesses exist to provide goods and services on a commercial basis to customers
What are some benefits of business to society?
They create employment and develop Human Capital
Drive innovation through R&D and New Products
Pay Taxes on profits earned and collect taxes for Govt.
Create wealth by providing returns on investment
What is an Entrepreneur
A person who takes the risk to start up a new company
Difference between public sector companies and public sector organizations?
Public sector companies:
Relatively small number of companies are owned by or controlled by the government
E.g. RBS
Public sector organisations:
There are more organisations that provide goods and services which are owned and operated by public bodies
These are funded by central & local government, but may still levy charges for some services.
E.g. NHS, highways agency
What does USP mean
Unique selling point - A feature in a product which allows it to be different from everyone else
Doesn’t have to be about product, could be about lead time (delivery), service or other aspects.
What does CELL stand for
Capital, Enterprise, Land, Labour
What is an SME business (small and medium sized enterprises)
A business with fewer than 250 employees
What is an SME business (small and medium sized enterprises)
A business with fewer than 250 employees
What does OS stand for?
Official Statistics
What is the word for a Business failing?
Insolvent
How to improve profit?
Either, make more revenue
Or, reduce costs
Or both
What is the difference between cash and profit?
Profit is total revenue - costs in a business - what is left once all the bills have been paid
Cash is money available in the business to pay the bills, cash may not come in the same month as it goes out. This could be cash, cheque, cards or other payment methods (PayPal etc.)
What does Trade credit mean?
Agreement between a buyer and a seller where the buyer does not have to pay for a certain period of time
How can cash flow make profitable companies become insolvent?
If money has not yet been paid because of a trade agreement, but costs need paying, companies can become insolvent because they cannot pay the costs, despite being profitable on paper.
