Business Ownerships Flashcards
Supplier
A business which sells (or supplies) products to another business.
customer
any customer or organisation which buys or is supplied with a product or by a business
Consumer
The person who ultimately uses (or consumes) a product.
Customer Needs
Value for money Disability access Good quality Safe environment
Primary (or field) research
The gathering of new information which has not been collected before. E.g Survey, focus group, interview
Research involving asking questions of people or organisations.
Survey
Those who provide data for a survey usually by answering questions in a questionnaire or interview.
Respondents
A list of questions to be answered by respondents, designed to gather information about consumers’ tastes.
Questionnaire
In market research, a group of people brought together to answer questions and discuss a product, brand or issue.
Focus group
Secondary (or desk)
research
Information that has already been gathered e.g sales records, government statistics, newspaper articles
Information about opinions, judgements and attitudes. E.g interviews, focus groups, questionnaires
Qualitative data
Data that can be expressed as numbers and can be statistically analysed. E.g survey, sales data
Quantitative data
Part of a market that contains a group of buyers with similar buying habits, such as age or income.
Market segment
Price sensitive
When the price is very important in the decision about whether or not to buy.
A diagram that shows the range of possible positions for two features of a product, such as low to high price and low to high quality.
Market Map (Perceptual
Map or Positioning Map)
Occurs when no business is currently serving the needs of customers for a particular product.
Gap in the market
Product range
A group of similar products made by a business like a number of different soap products.
Brand
A named product which customers see as being different from other products and which they can associate or identify with.
Added Value
The increase worth that a business creates for a product; it is the difference between what a business pays to its suppliers and the price that is able to charge for the product/ service.
A characteristic of a product that make it different from other similar products being sold in the market such as design, quality or image.
Unique selling point or
USP
The right given by one business to another to sell goods or services using its name.
Franchise
A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.
Franchisee
The business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment.
Franchisor
Entrepreneur
A person who owns and runs their own business and takes risks.
A willingness by an individual or a business to take risks, show initiative and undertake new ventures.
Enterprise
Goods
Physical, tangible products like a car, a pair of scissors or a television set.
Non-physical, intangible products like a taxi journey, a haircut or a television programme.
Services
Competitive Advantage
An advantage a business has that enable it to perform better than its rivals in the market and which is both distinctive and defensible.
Thinking differently to try and find new and unexpected ideas.
Lateral Thinking
A technique of creative thinking where participants are encourage to think of as many ideas as possible about an issue or a problem.
Blue Skies Thinking
Invention
The discovery of new processes and potential new products, typically after a period of research.
Innovation
The process of transforming inventions into products that can be sold to customers.
Patent
Right of ownership of an invention or process when it is registered with the government.
Legal ownership of material such as books, music and films which prevents these being copied by others.
Copyright
Trademarks
The symbol, sign, or other features of a product or business that can be protected by law.
Calculated Risk
The probability of a negative event occurring.
Targets expressed in money terms such as making a profit, earning income or building wealth.
Financial Objectives
Specific, measurable, achievable, realistic and timed
SMART
Revenues
Sales Revenue
Turnover
Sales Turnover
The amount of income received from selling goods or services over a period of time
TR = P x Q Total Revenue = Price x Quantity
Total Revenue
The number of items or products or services sold by a business over a period of time.
Sales volume
Costs which do not vary with the output produced such as rent, business rates, advertising costs, administration costs and salaries.
Fixed costs
Total Costs
All the costs of a business; it is equal to fixed costs plus variable costs.
Variable Costs
Costs which change directly with the number of products made by a business such as the cost of buying raw materials.
Occurs when the revenues of a business are greater than its costs over a period of time. TR - TC = P
Profit
Cash Flow
The flow of cash into and out of a business
The cash flowing into a business, its receipts
Inflow
Outflow
The cash flowing out of a business, its payments
Net Cash Flow
The receipts of a business minus its payments Inflows – Outflows = Net Cash Flow
Insolvency
When a business can no longer pay its debts.
Cash Flow Forecast
A prediction of how cash will flow through a business in a period of time in future
The amount of money in a business at the start of the month
Opening Balance
The amount of money in a business at the end of the month
Closing Balance
Where a supplier gives a customer a period of time to pay a bill (or invoice) for goods or services once they have been delivered
Trade Credit
Materials that a business holds. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers.
Stocks
Sources of money for businesses that are borrowed or invested typically for more than a year e.g Mortgage, Venture Capitalist
Long term finance
Short term finance
Sources of money for businesses that may have to be repaid with immediately or fairly quickly, such as an overdraft, usually within a year.
Personal Savings
Money that has been set aside and not spent by individuals and households.
Share Capital
The monetary value of a company which belongs to its shareholders, for example, if five people each invest £10,000 into a business, the share capital will be £50,000
