bussiness Flashcards
aim
a general goal or ambition to be achieved
objective
a specific target that will enable the aim to be achieved
business objects ideally should be SMART
Specific
Measurable
Achievable
Realistic
Time-bound
business risks
bussiness failure
finiancial loss
lack of security
what might cause a business to fail?
drop in sale revenue
cash flow problems
unexpected costs
recession
problems with suppliers
competition
risks that lead to financial
risk that a competitor might do better
risk that a product may fail
risk of having insufficent money
lack of security
-being an entrepeneur and running a business may not be as secure as working for someone else
-wages, sick pay, pension etc may not be guaranteed
-personal saving may have to be invested in the business
-running a business can be very stressful and could effect an entrepreneurs health
enterprise
another word for business
goods
physical products that a customer is willing to pay for eg. bread
services
non-physical products that a customer is willing to pay for
3 purposes of a business
- to produce goods and services
-to meet customer needs
-to add value
added value
adding value is the increase in a products value as a result of a business producing that product
added value example
50=cost
95p=to make
49.05=added value
the size of the business
small businesses will have different aimed objectives to large one
the age of the business
new businesses will focus on survival more established business may focus on profit and market store
the purpose of the business
privately owned businesss will have different aims and objectives to there owned by the govenment or not for profit organisations
revenue
the amount of money a business recieves from sales
revenue equations
selling price times quantity
R=Sp times Q
total costs equation
fixed costs+variable costs
fixed costs
costs that do not change, no matter how many products or services a business sells
variable costs
costs that change depending on how many products or services a business sells
profit
the difference between revenue and costs
profit equation
revenue-total costs
break even
total costs=total revenue
break even equation
fixed costs divided by (selling price-variable)
Fc divided by (Sp-Vc)
break even equation
fixed costs divided by (selling price-variable)
Fc divided by (Sp-Vc)
credit terms
allow a business to purchase goods from a supplier and to pay for those goods at a later date
cash flow
the flow of money into and out of a business
forecast
prediction of estimate
brackets
minus/negative eg. -100=(100)
net cash flow
reciepts-payments
income stream
revenue from different groups of customers or customer segments
over draft
bank allows account holder to borrow money at short notice, but you have to pay back
trade credit
supplier allows a period of time to pay for goods and services. items are brought from suppliers on a buy now pay later basis
venture capital
a person or company who buys shares in a business that they hope will grow fast. in the long term they will sell the shares at a profit and often reinvest in other companys
share capital
selling part-ownership in the businesses. the share holder receives part of the annual profit in the form of a divide.
loan
money borrowed from the bank then repaid with interest over a set amount of time
retained profit
a source of finance that does not need to be paid back, but is only available once the business has been trading successfully for a period of time
crowd funding
provide valuable marketing benefits and media attention through the use of the internet
