Definitions Flashcards
ENTREPENUER
A person who takes the risk in starting a new business
ENTERPRISE
The creation of a business to meet the needs and wants of customers
RISK
The probability that things might not go as well as planned
OPPORTUNITY COST
The opportunity cost of a decision is the cost of missing out on an alternative, e.g. Loosing a well paid job to start own business
PATENTS
- difficult to obtain
- protection for up to 20yrs
- expensive & time consuming to obtain
TRADEMARKS
Something that identifies a product by symbol, name or logo. Protection lasts for up to 10yrs
COPYRIGHT
Particularly used in startup creative or knowledge industries. Protection is automatic for any original work. Lasts for 70yrs after authors death.
ADDED VALUE
The difference between the price of a finished product and the cost of inputs making it
NICE MARKET SEGMENT
A smaller, specialist part of a larger market where customers have particular needs and wants
FRANCHISEE
The business which is granted the right to operate a franchise on behalf of the franchisor
FRANCHISOR
The ultimate owner of the franchise format
MARKET RESEARCH
Information that helps explain the size, structure and nature of a market
QUALITATIVE RESEARCH
Provides useful insight into opinions and attitudes of target new customers from relatively little research
QUANTITATIVE RESEARCH
Based on proper samples and provides insight based on numerical data
MARKET
Is any location where buyers and sellers come together to transact with each other
SOLE TRADER
An individual owning the business on their own. They can employ people but those employees don’t have ownership of the business.
PARTNERSHIP
Where a business is started and owned by more than one person.
PROFIT
The difference between total revenues and total costs
CONTRIBUTION
This is the difference between sales revenue & variable costs of production
LOCATION
The physical place from which a business is operated and controlled
CONTRIBUTION PER UNIT
This is the difference between the selling price of one unit and the variable cost of producing one unit
BREAK EVEN POINT
The output at which total revenues equal total costs
CASH FLOW
The total cash payments (inflows) into a business minus the total cash payments (outflows)
LIQUIDATION
This is turning assets into cash and may be insisted on by courts of suppliers haven’t been paid.
BUDGETS
Financial targets for the future covering revenue (income) and expenditure over a certain time period
BANK LOAN
A fixed amount loan from a bank which is enter ally used to finance long term assets
BUSINESS ANGEL
A particular type of investor, usually a successful entrepenuer, who is willing to invest in high-risk, high growth businesses at a very early age
ELASTICITY OF DEMAND
The responsiveness of demand to a change in price
FULL TIME EMPLOYEE
An employee who works more than 30 hours a week in a business
LIMITED LIABILITY
Shareholders are only liable for the money they have invested - not for the overall debts and liabilities of their company
MARGIN OF SAFETY
The difference between the actual level of output and the break even output
MARKET SEGMENTATION
The process of dividing a market into smaller sections (segment) which contains customers with similar wants and needs
MARKET SHARE
The share of a total market that is owned by a particular business, product or brand
MARKET SIZE
The total value or quantity of demand in a specific market, over a specific period of time. Can be measured in terms of value or quantities
QUALITITATIVE RESEARCH
Market research concerned with collecting data on attitudes, beliefs, opinion etc
QUANTITATIVE RESEARCH
Market research concerned with collecting data that can be quantified, e.g. Sales, statistics
REVENUE
The income or sales that a business achieves in a period
RISK
The probability or chance that hoped-for outcomes will not occur
SUPPLIER
A business that provides goods and services to another firm
TRADE CREDIT
Amounts owed to suppliers of a business
UNLIMITED LIABILITY
Describes the potential risks that sole traders and partnerships face. They are liable for the debts of the business
WORKING CAPITAL
The amount of money that a business has available to conduct its day to day activities
