Business definitions

Question 1

Business

Answer 1

An organisation that exists to provide goods and services on a commercial basis.

Question 2

Entrepeneur

Answer 2

A person who organises, operates and assumes the risk for a business venture.

Question 3

Entrepeneur

Answer 3

A person who takes the risk in starting a new business.

Question 4

Start-Up

Answer 4

A new business enterprise, formed by one or more entrepreneurs.

Question 5

Liabilities

Answer 5

Anything that business owes e.g. money owed to a bank

Question 6

Limited Liability

Answer 6

A persons financial liability is a fixed sum.

Question 7

Unlimited liability

Answer 7

Your personal assets are at risk if the company is in debt.

Question 8

Sunk Costs

Answer 8

Initial costs that you cannot get back.

Question 9

Trade Creditors

Answer 9

The bills you need to pay

Question 10

Franchisee

Answer 10

A person who is responsible for the sale of goods for a franchise.

Question 11

Franchisor

Answer 11

Established entrepreneur with a licensed business model. Owns the franchise.

Question 12

Sales Maximisation

Answer 12

Where a business attempts to generate as much sales revenue as possible.

Question 13

Survival

Answer 13

A business aims to continue to trade.

Question 14

Employee Welfare

Answer 14

Business aims to keep the highest standards of health, happiness and care of their staff.

Question 15

Market Share

Answer 15

Where a business aims to have a larger portion of sales in the market in which they compete.

Question 16

Liquidity

Answer 16

The ease with which assets can be converted into cash.

Question 17

Assets

Answer 17

Resources that belong to a business e.g. machinery, stock or vehicles.

Question 18

Opportunity Cost

Answer 18

Can be measured as the cost of foregoing the next best alternative.

Question 19

Trade-Off

Answer 19

When less of one is exchanged for more of another. It is also known as a compromise.

Question 20

Mass Market

Answer 20

This is the market that is aimed at the general population

Question 21

Niche Market

Answer 21

This is a subset of the main market and addresses a specialist need

Question 22

Global Business

Answer 22

Companies operating internationally on a global scale

Question 23

Non-Current Assets

Answer 23

Owed and used for more than a year

Question 24

Current Assets

Answer 24

Already money or will soon be money

Question 25

Market Mapping

Answer 25

The process of plotting competitor products on a graph to visually illustrate a sector

Question 26

Marketing

Answer 26

The process of finding out, meeting and exceeding customer’s needs

Question 27

Added Value

Answer 27

The difference between the selling price and the cost price of a good or service

Question 28

Economies of Scale

Answer 28

A proportionate saving in costs gained by an increased level of production

Question 29

Working Capital

Answer 29

Current assets – current liabilities

Question 30

Promotion

Answer 30

The use of marketing tools to bring a product or service to the attention of potential buyers.

Question 31

Oligopolies

Answer 31

Market with just a few large businesses e.g. budget airlines