Chapter 1: Starting a Business Flashcards
Business
an activity that requires the organisation of resources to achieve a reward, whilst running a risk
Entrepreneur
an individual with an idea or business
Gap in the market
a business opportunity that is either a completely new idea or adds something different to an existing product or service.
Franchise
The legal right to use the name and logo of an existing firm and sell the same products.
Business Aim
A stated target for the future. For example, a new business may have the aim to survive its first year of trading.
Business Objective
A clearly defined target for a business to achieve over a cetain period of time.
Growth
An increase in turnover(sales), market share or profit.
Profit
What is left after costs have been deducted from revenue.
Profit Margin
Profit made as a proportion of sales revenue.
Sales
The amount sold or the value sold.
Market Share
The proportion of total market sales sold by one business.
Customer Satisfaction
How happy the customer is with the product or service.
Ethics
The moral questions on which decisions are made and the impact the business has on its internal and external environment.
Turnover
The value of sales made during the trading period, also called revenue.
Stakeholder
An individual or group with an interest in a business, such as employees, customers, managers, shareholders, suppliers, competitors and the local community.
Business Plan
A statement showing how a business sets out to achieve its aims and objectives.
Funding
The capital provided for the various stages of business growth by different sources of finance, either on a short- or long-term basis.
Forecast
A technique where the business attempts to estimate future sales, or other financial variables.
Risk
The potential for loss but rewards in business make it a calculated gamble.
Uncertainty
Not knowing the future, or what is going to happen.
Sole Trader
The most common form of business organisation, often just one person
Partnership
The simplest way two or more people can be in business together where partners are jointly and personally responsible for debts.
Unlimited liability
Unincorporated businesses, such as sole traders and partnerships, have unlimited liability, which means that the owners are responsible for all the business’s debts.
Incorporation
The process of forming limited liability company such as a private limited company or PLC.
Limited Liability
Investors (shareholders) in a limited company can only lose their investment in the business if it fails; they cannot be forced to sell assests to pay off the firm’s debts.
Technology
In relation to business location, this refers to the use of e-technology, such as the Internet and email, to create a virtual market between the business and the consumer.
Logistics
The process of buying, managing and delivering goods, from the point of manufacture to the end customer.
