component 1 defintions business oportunities Flashcards
unlimited liability
situation where the owners of a business are personally resposible for all the debts and liablities of the business and if the business cant pay its debts the owners personal assets may be used to cover the debts
limited liability
where owners or shareholders of a company arent personally responsible for the companys debts and liabilities therefore personal belongings will not get repossesed if debts cant be paid
cooperatives
organisations that are owned and operated by a group of indivduals who come together to meet a common need or goal.
societies
a group of people who come together to start a club/ gorup sharing the same interests and not for benefits or profits
fixed costs
costs that do not vary with output no matter how much is sold fixed costs have to be paid for example rent, insurance tax
variable costs
vary in direct proportion to output, as output increases variable costs increase and vise versa for example raw materials and labour
semi variable costs
costs that contain both fixed and variable elements
direct costs
costs that arrise specifically from the produvtion of s product or provision of a service for example rent on a shop, materials, direct labour
overhead costs/ indirect costs
costs not directly related to the production of a specific product or service- rent, utliities
break even
point where a business makes neither a profit or incures a loss where total revenue = total costs
contribution
the difference between the selling price per unit and the variable cost per unit
margin of safety
difference between output level and break even output when output is above break even, thee amount by which demand can fall before a business incures losses.
demand
quantity off a good or service consumers are willing and able to purchace at a given price within a specific period of time
supply
quantity of a good or service that a producer is willing and able to supply at a given price during a given period of time
working capital
money needed to finance the day to say running of a business, allows stock to be bought and wages and bills to be paid.
investment capital
helps the business grow. funds businesses allocate for investment purposes
capital expenditure
money to invest in fixed assets such as buildings and equipment
market research
processs of collecting information about a businesses customers, the market place and the activities of competitors within the market place for exmaple quantitive and qualititve data
primary research
field research, gathers first hand information directly relevant to the needs of a business for example, questionaires and focus groups
secondary research
information not gathered specifically for the business but adapted for use, easily avaliable, for exmaple: official publications and online desk research
sample
a group of respondants to a market research exercise who are selected to be representitive of the views of a target market as a whole
random sampling
every member of the population has an equal chance of being chosen
quota sampling
population is segmented into a number of groups that share the same characteristics
market segmentation
a process of breaking down a market into sub- groups known as segmants that share similar characteristics for exmaple, income level, lifestyle and location
business plan
a statement that outlines the way in which a business will attempt to achieve its objectives a clear ide of operation and direction
market orientated
responding to competitive pressure and understanding market in which a business is operating in and monitoring competitors activities
equilibrium price
In a free market, demand and supply equal the equilibrium price this is where the quantity demanded is equal to quantity supplied
Demand
The amount of product consumers are willing and able to purchase at a given price
Supply
The quantity of a product that suppliers are willing and able to supply at a given price
market
a meeting place between buyers and sellers where goods and services are exchanged usually for money
enterprise
a company or organisation involved in commercial actitvities
competition
rivalry between organisations operating in the same market
sme’s
small and medium enterprises, fewer employees and lower revenue ( add stats)
costs
expenses incurred by a business or indivifual in the process of producing goods or providing a service
reveunue
total amount of money that a business or organisation earns from its primary activities such as sales.
income generatef before deducting expenses tax and costs
profits
financial gains or earnings a business generates from their operations/investments
contribution
