Business Ownerships

Question 1

Supplier

Answer 1

A business which sells (or supplies) products to another business.

Question 2

customer

Answer 2

any customer or organisation which buys or is supplied with a product or by a business

Question 3

Consumer

Answer 3

The person who ultimately uses (or consumes) a product.

Question 4

Customer Needs

Answer 4

Value for money Disability access Good quality Safe environment

Question 5

Primary (or field) research

Answer 5

The gathering of new information which has not been collected before. E.g Survey, focus group, interview

Question 6

Research involving asking questions of people or organisations.

Answer 6

Survey

Question 7

Those who provide data for a survey usually by answering questions in a questionnaire or interview.

Answer 7

Respondents

Question 8

A list of questions to be answered by respondents, designed to gather information about consumers’ tastes.

Answer 8

Questionnaire

Question 9

In market research, a group of people brought together to answer questions and discuss a product, brand or issue.

Answer 9

Focus group

Question 10

Secondary (or desk)

research

Answer 10

Information that has already been gathered e.g sales records, government statistics, newspaper articles

Question 11

Information about opinions, judgements and attitudes. E.g interviews, focus groups, questionnaires

Answer 11

Qualitative data

Question 12

Data that can be expressed as numbers and can be statistically analysed. E.g survey, sales data

Answer 12

Quantitative data

Question 13

Part of a market that contains a group of buyers with similar buying habits, such as age or income.

Answer 13

Market segment

Question 14

Price sensitive

Answer 14

When the price is very important in the decision about whether or not to buy.

Question 15

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.

Answer 15

Market Map (Perceptual

Map or Positioning Map)

Question 16

Occurs when no business is currently serving the needs of customers for a particular product.

Answer 16

Gap in the market

Question 17

Product range

Answer 17

A group of similar products made by a business like a number of different soap products.

Question 18

Brand

Answer 18

A named product which customers see as being different from other products and which they can associate or identify with.

Question 19

Added Value

Answer 19

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.

Question 20

A characteristic of a product that make it different from other similar products being sold in the market such as design, quality or image.

Answer 20

Unique selling point or

USP

Question 21

The right given by one business to another to sell goods or services using its name.

Answer 21

Franchise

Question 22

A business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.

Answer 22

Franchisee

Question 23

The business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment.

Answer 23

Franchisor

Question 24

Entrepreneur

Answer 24

A person who owns and runs their own business and takes risks.

Question 25

A willingness by an individual or a business to take risks, show initiative and undertake new ventures.

Answer 25

Enterprise

Question 26

Goods

Answer 26

Physical, tangible products like a car, a pair of scissors or a television set.

Question 27

Non-physical, intangible products like a taxi journey, a haircut or a television programme.

Answer 27

Services

Question 28

Competitive Advantage

Answer 28

An advantage a business has that enable it to perform better than its rivals in the market and which is both distinctive and defensible.

Question 29

Thinking differently to try and find new and unexpected ideas.

Answer 29

Lateral Thinking

Question 30

A technique of creative thinking where participants are encourage to think of as many ideas as possible about an issue or a problem.

Answer 30

Blue Skies Thinking

Question 31

Invention

Answer 31

The discovery of new processes and potential new products, typically after a period of research.

Question 32

Innovation

Answer 32

The process of transforming inventions into products that can be sold to customers.

Question 33

Patent

Answer 33

Right of ownership of an invention or process when it is registered with the government.

Question 34

Legal ownership of material such as books, music and films which prevents these being copied by others.

Answer 34

Copyright

Question 35

Trademarks

Answer 35

The symbol, sign, or other features of a product or business that can be protected by law.

Question 36

Calculated Risk

Answer 36

The probability of a negative event occurring.

Question 37

Targets expressed in money terms such as making a profit, earning income or building wealth.

Answer 37

Financial Objectives

Question 38

Specific, measurable, achievable, realistic and timed

Answer 38

SMART

Question 39

Revenues Sales Revenue Turnover Sales Turnover

Answer 39

The amount of income received from selling goods or services over a period of time

Question 40

TR = P x Q Total Revenue = Price x Quantity

Answer 40

Total Revenue

Question 41

The number of items or products or services sold by a business over a period of time.

Answer 41

Sales volume

Question 42

Costs which do not vary with the output produced such as rent, business rates, advertising costs, administration costs and salaries.

Answer 42

Fixed costs

Question 43

Total Costs

Answer 43

All the costs of a business; it is equal to fixed costs plus variable costs.

Question 44

Variable Costs

Answer 44

Costs which change directly with the number of products made by a business such as the cost of buying raw materials.

Question 45

Occurs when the revenues of a business are greater than its costs over a period of time. TR - TC = P

Answer 45

Profit

Question 46

Cash Flow

Answer 46

The flow of cash into and out of a business

Question 47

The cash flowing into a business, its receipts

Answer 47

Inflow

Question 48

Outflow

Answer 48

The cash flowing out of a business, its payments

Question 49

Net Cash Flow

Answer 49

The receipts of a business minus its payments Inflows – Outflows = Net Cash Flow

Question 50

Insolvency

Answer 50

When a business can no longer pay its debts.

Question 51

Cash Flow Forecast

Answer 51

A prediction of how cash will flow through a business in a period of time in future

Question 52

The amount of money in a business at the start of the month

Answer 52

Opening Balance

Question 53

The amount of money in a business at the end of the month

Answer 53

Closing Balance

Question 54

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

Answer 54

Trade Credit

Question 55

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.

Answer 55

Stocks

Question 56

Sources of money for businesses that are borrowed or invested typically for more than a year e.g Mortgage, Venture Capitalist

Answer 56

Long term finance

Question 57

Short term finance

Answer 57

Sources of money for businesses that may have to be repaid with immediately or fairly quickly, such as an overdraft, usually within a year.

Question 58

Personal Savings

Answer 58

Money that has been set aside and not spent by individuals and households.

Question 59

Share Capital

Answer 59

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