Chapter 3

Question 1

Planning

Answer 1

Planning is the process of formulating objectives and determining how to achieve them

Question 2

Resource

Answer 2

A resource is any person or product that will help in the production of a good or service

Question 3

Human resources

Answer 3

Are the employees who provide their time, energy, skills and effort

Question 4

Physical resources

Answer 4

Refer to equipment such as a computer, cash register, machinery, motor vehicle, office equipment and stock

Question 5

Asset

Answer 5

Is any item of value owned by the business

Question 6

Establishment costs

Answer 6

Establishment costs include those costs involved in setting up the business

Question 7

Operating costs

Answer 7

Operating costs include those costs involved in the ordinary day-to-day running of the business

Question 8

Equity

Answer 8

Is the funds contributed by the owner(s) of a business to commence and build the business

Question 9

Debt

Answer 9

Is the funds provided by sources outside the business, which must be paid back over time, with interest

Question 10

Working capital

Answer 10

Is the funds available for the short-term financial commitments of a business

Question 11

Bank overdraft

Answer 11

With a bank overdraft, the bank allows a business or individual to overdraw their account up to an agreed limit for a specified time, to help overcome a temporary cash shortfall

Question 12

Bank bills

Answer 12

Are basically short-term securities issued by a business and brought by a bank. They are a type of exchange and are given for larger amounts for a period of 90-180 days

Question 13

Trade credit

Answer 13

When a supplier provides products to a business with an agreement to charge for the goods or services later

Question 14

Mortgage

Answer 14

A mortgage is a loan secured by the property of the borrower (the business)

Question 15

Leasing

Answer 15

Is a way of financing the purchase of assets without a large initial capital outlay

Question 16

Lessee

Answer 16

The lessee is the person or business to whom a lease is granted

Question 17

Lessor

Answer 17

A lessor is the owner of an asset that is leased under an agreement to the lessee

Question 18

Grants

Answer 18

Governments are also providers of finance in the form of grants for business development, and especially to promote exports

Question 19

Marketing

Answer 19

Is ‘the process of planning and executing the conception of ideas, goods and services to create exchanges that satisfy individual and organisational objectives’

Question 20

Marketing objectives

Answer 20

A marketing objective is a statement of what is to be achieved through the marketing activities

Question 21

Target marketing

Answer 21

The target market is the group of customers to which the business intends to sell its product

Question 22

Marketing strategies

Answer 22

Are actions undertaken to achieve the business’s marketing objectives

Question 23

Marketing mix

Answer 23

Refers to the combination of the four elements of marketing, the four Ps - product, price, promotion and place - that make up the marketing strategy

Question 24

Marketing management

Answer 24

Is the process of monitoring and modifying the marketing plan

Question 25

Enlightened self-interest

Answer 25

Is the belief that a business ultimately helps itself when it helps to solve society's problems

Question 26

Triple bottom line

Answer 26

Refers to the economic, environmental and social performance of a business

Question 27

Business plan

Answer 27

A business plan is a written statement of the business's goals and objectives, and the steps to be taken to achieve them