Business definitions Flashcards
What is added Value
the difference between the cost of
production and the price the finished
goods are sold for
What is creating value?
increasing the difference between the cost of purchasing bough-in materials and the price the
finished goods are sold for
What is an entrepreneur
An entrepreneur is someone who takes the financial risk of starting and managing a new venture
What is primary production?
Production where raw materials are extracted. For instance: Coal mining, digging potatoes up, timber oil
What is secondary production?
Production where raw materials are turned into a good. For instance, potatoes into French Fries.
What is tertiary production?
Production were manufactured goods are retailed to the general public. I.e McDonald’s sells the manufactured fries
Opportunity cost
the benefit of the next most desired
option which is given up.
Public sector
comprises organisations accountable to and controlled by central or local government (the state).
Private Sector
comprises of organisations accountable to and controlled by indiviuals
Mixed Economy
economic resources are owned and controlled by both private and public sectors with some state/ govt intervention
Free-market economy
Economic resources are owned largely by the private sector with very little state intervention
Command economy
economic resources are owned, planned and controlled by the state.
What is the common features of a Social Enterprise?
Directly produces products and services.
Have social aims and se ethical ways of achieving them
Need to make surplus or profit to survive as they can’t rely on donations like charities do.
Triple Bottom Linear objectives
- Economic
- Social
- Environmental
Partnerships
Businesses owned by two or more people with shared capital investment and usually share responsibilities i.e. Dentist, Lawyers/ solicitors.
Sole Traders
Business in which one person provides the permanent finance and in return has full control of the business and keeps all of the profits i.e. Window cleaner, plumber, Florist
Social Enterprise
business with mainly social
objectives that reinvests most of its profits into benefiting
society rather than maximising returns to owners
Consumer goods
the physical and tangible goods sold to
the general public
Consumer services
the non-tangible products sold to
the general public – they include hotel accommodation,
insurance services and train journeys
Limited Liability
the only liability – or potential loss – a
shareholder has if the company fails is the amount invested
in the company, not the total wealth of the shareholder.
Public limited
a limited company, of en a large
business, with the legal right to sell shares to the general
public – share prices are quoted on the national stock
exchange.
Private Limited
a small to medium-sized
business that is owned by shareholders who are family members or friends, it cannot sell
shares to the general public
Franchise
a business that uses the name, logo and
trading systems of an existing successful business
Joint Venture
two or more businesses agree to work
closely together on a particular project and create a
separate business division to do so
Ethical Code
A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees
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