Definitions Flashcards
Business
A business is a organization designed to supply a product or service
Product
A product is anything that is capable of satisfying a customers need, it is a physical thing that you can touch.
Service
A service is an act that a business person carries out for you in exchange for money
4 factors of production
-Land
-Labour
-Capital
-Enterprise
Primary sector
The primary sector extracts raw materials from the planet
Secondary sector
In the secondary sector goods are from raw materials into finished goods
Teritary Sector
The teritary sector is all the support services for business
Sole Trader
A self-employed person who owns and runs their own business as an individual
Partnership
A legal arrangement that allows two or more people to share a responsibillity for a business (2-20 people)
LTD
A private type of corporation that limits the personal liability of the corporations shareholders
PLC
A public company that is legally allowed to offer its shares for sale to the public
Companies House
Any limited company or partnership business has to register with Companies House. These records are public and there is usually a fee to register.
Deed Of Partnership
A document that is signed by all of the owners of a business setting out the terms they must abide by and their obligations as owners.
Dividents
A sum of money paid regularly by a company to its shareholders out of its profits.
Economies of scale
Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.
Grant
A grant is money given to a business, usually by the government or lottery fund, that does not need to be paid back
Hostile Takeover
A takeover of one company (called the ‘target company’) by another (called the ‘acquirer’) that is accomplished without the agreement of the target company’s management. Instead, the acquirer approaches the company’s shareholders directly or fights to replace the management to get the takeover approved.
Income Tax
Tax that someone pays based on their personal income (the money that they earn).
Limited Liability
When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.
Profits
The amount of money made after all costs are deducted.
Share Capital
The money raised when a business becomes a public limited company by offering shares in the business in return for capital.
Shareholders
A part owner of a private or public limited company.
Shares
A percentage or portion of a company.
Stock Market
A centralised market where business shares are traded.
Unlimited Liability
When the business owner or owners are personally responsible for all the debt of the business, no matter what the value.
Survival
Keeping a business operating for a certain amount of time
Make profit
Making a profit is essential for a business that desires to expand it operations
Maximise profit
A process buisiness firms undergo to ensure the best output and price levels are achived
Maintain sales
Change product slightly and adapt in order to increase demand
Increase Market share
Higher market share can help improve sales when existing, brand loyal customers buy more of a companys product
Value of shares
Share value is calculated based on the demand for the companys stock
Growth
Owners and managers may want the business to open more stores (domestically or internationally)
Customer satisfaction
Defined as a measurment that determines how happy customers are with a companys product
Ethical
Fix ethical problems that can arise in business enviromemt
Stakeholders
A person with an intrest or concern in a business
Business planning
A business plan states what a business is trying to achieve over the next few years and how it intends to accomplish these aims
Tariff
A tariff is a tax on foreign goods imported into a country
R E C I P F.
Raw materials
Employment
Competitors
Infrastructure
Proximity
Finance
Ethics
Moral principles that govern business behavior or the conducting of an activity
Ways a business could become more ethical
-Paying wokers higher wages
-Improve working conditions
-Reduce pollution
-Buying fairtrade supplies
-Reduce packaging
What is a market
A market exists where there are buyers and sellers. Buyers and sellers come together to exchange goods and services and to set prices for goods and services.
What is competition
Competition exists when more than one business is attempting to attract the same customers.
What is a monopoly
A monopoly exists when a business does not face any competition in a particular market.
What is market share
Market share is the percentage of sales in a particular market recorded by a business.
Production
The process of changing inputs such as labour services into goods and services that can be sold
Production management
Refers to all the activities in managing the transformation process
Production management
Refers to all the activities in managing the transformation process
Job production
A method of production in which a product is supplied to meet the exact reauirements of a customer
Flow production
Occurs when a item moves continously from one stage of the process to another
Specialisation
Occurs when individuals focus on a limited number of tasks
Lean production
An approach to production that aims to minimise waste
Just-in-time
Holds as little stock as possible.Items are ordered just in time to be used
Kaizen
Continous improvement
Procurement
Involves selecting suppliers, estsblishing the terms of payment and negotiating the contract
Logistics
Movement of products, services and information
Purchasing economies of scales
When you buy loads of products so each one is cheaper
Just In Case (JIC), Just In Time (JIT)
Just in case keeps excess stock, Just in time does not
