Key terms Flashcards
1
Q
Objective
A
the short-term steps a business needs to take to meet its overall aims
2
Q
Aim
A
the overall long-term target or goal of the business
3
Q
Example aims
A
make £120,000 profit
get a market share of 50%
4
Q
Business growth
A
Business growth is where a business grows organically or inorganically.
5
Q
Internal/organic growth
A
Internal/organic growth is where a business grows by selling more products/their service
6
Q
External/inorganic growth
A
External/inorganic growth is where a business grows by merging/taking over another business
7
Q
Backwards vertical growth
A
This is where the retailer purchases a supplier (Cadbury’s purchasing a cocoa farm)
8
Q
Forwards vertical growth
A
This is where a supplier purchases a seller (a cocoa farm purchasing Cadbury’s)
9
Q
Diversification
A
This is where a business invests in something it has no relation to
10
Q
Horizontal growth
A
Horizontal growth is where a business purchases another business at the same level as themselves.
11
Q
Business plan
A
A business plan is a document that outlines what a business wants to achieve and how it will achieve it.
12
Q
Capital
A
Capital is the money raised from selling shares
13
Q
Dividend
A
A dividend is money received by individuals from owning shares given by a business.
14
Q
Entrepreneur
A
An entrepreneur is someone who takes the risk of starting up a business.
15
Q
Characteristics of an entrepreneur
A
Risk taker
Determined
Creative
Confident
16
Q
Stakeholders
A
A stakeholder is someone with an interest in the running of a business they can be external where they are outside of the business and don’t work for them if inside the business and works for it.
17
Q
Examples of internal stakeholders
A
Owner(s)
Workers
Managers
18
Q
Examples of external stakeholders
A
Government
Local community
Customers
19
Q
Sole trader
A
Someone who runs a business by themselves.
20
Q
Advantages of sole traders
A
Keep all profits to yourself able to make own decisions
21
Q
Disadvantages of sole traders
A
Hard to get time off unlimited liability
22
Q
Partnership
A
Where 2-20 people run a business together.
23
Q
Advantages of Partnership
A
Shared workload
Easier to get time off
24
Q
Disadvantages of Partnership
A
Shared profits
May take longer to make decisions
Unlimited liability
25
Private Limited Company - LTD
Shares are given to people who you know
26
Advantages of LTD
Limited liability
No worry from a merger/takeover
27
Disadvantages of LTD
Dividends have to be payed.
Capital can't be easily raised
28
Public Limited Company - PLC
Shares are sold on the stock exchange
29
Advantages of PLC
Capital can be raised easily
Unlimited liability
30
Disadvantages of PLC
At risk of a takeover
Expensive to set up.
31
Limited Liability
Where the bank is limited to only taking business owned assets to pay of any bankruptcy a business may have incurred
32
Unlimited Liability
Where a bank can take personal assets to pay off any bankruptcy a business may have incurred
33
Limited Liability Partnership
Where a partnership has limited liability
34
Marketing
How a business advertises its products/services
35
Merger
Where two business agree to become one
36
Market Share
How much of the market they control/influence
37
Takeover
Where a company forcibly takes over another company by purchasing a controlling share of a business shares.
38
Operate
The activities, processes and systems that a company uses to deliver its products or services to customers and achieve its business objectives
39
Profit
How much money a business makes after costs have been included.
40
Providing a service
Where a business doesn't sell a physical product but offers something else like a gardening service.
41
Resources
What a business needs to operate successfully.
42
Satisficing
Where business is making enough profit to keep shareholders happy or it's sufficient for investors to maintain confidence in the management they appoint.
43
Shareholders
Someone who owns shares in a Public Limited Company or Ltd.
44
Sleeping partner
Someone who invests in a business but doesn't interfere with the running.
45
Spotting an opportunity
46
Survival
Where a business is bandy managing to survive and continue trading.
47
Success
Where the business owner is earning a good income to pay for utilities and leisure.
48
Market research
Where a company undertakes research to see if the market would like a certain product and to give them data on it.
49
Primary market research
Market research done by the company themselves
50
Advantages of primary market research
- More accurate and relevant to the business
- Higher quality
51
Disadvantages of primary market research
- More expensive
- Longer
52
Secondary market research
Market research where someone else has collected the data and you are using it.
53
Advantages of secondary market research
- Cheaper
- Shorter Time frame
54
Disadvantages of Secondary Market Research
- Less accurate
- less relevant to the business
55
Questionnaire
Where you ask people questions to determine what they think/want
56
Trials
A temporary offering to test the success of a new product and whether customers will buy it.
57
Focus groups
A research technique used to collect data through group interaction.
58
Census data
A document that counts the population of a nation, state, or other geographic region
59
Interview
Where you ask people face to face questions about a certain topic/a product.
60
Quantitative market research
Numerical data such as sales or revenue
61
Qualitative market research
Worded data such as answers to questions or reviews.
62
Marketing
How a business promotes a product.
63
The 4P's
Price
Promotion
Product
Place
64
Promotion
How a business creates awareness of their product
65
Advertising Campaign
What a business uses to launch their products and create awareness
66
Advertising media
What forms of media a business may use to promote their product
67
Point of Sale Promotion
Why a business is selling a product and what its for.
68
Price
How much a business charges for their product.
69
Competitor pricing
Where you charge the same as competitors with a simialar product.
70
Cost-plus pricing
Where you sell the product for the cost it was to make plus a percentage of the cost to manufacture it.
71
Penetration pricing
Where you price your product less than competitors products.
72
Price skimming
Where you charge a high initial price to begin with but gradually lower it over time.
73
Product
What your selling.
74
Design
What it looks like and how it works.
75
Innovation
Redesigning a pre-existing product.
76
Product life-cycle
The stages a product goes through before becoming obsolete.
77
Introduction
When a product is first launched.
78
Growth
Starting to get more sales for the product and advertising starting to decrease.
79
Maturity
The product is getting many more new sales and is nearing the decline.
80
Decline
When a product starts to lose popularity/sales and is removed from the market.
81
Extension strategy
What a business can do to keep the product going for longer before retiring it.
82
Place
Where you are going to sell your product.
83
Digital distribution
Where you sell a digital product and how you get that product to the customer.
84
Physical distribution
Where you sell a physical product and how you get that product to the customer.
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Market data
Information on the market.
86
Application form
What an applicant fills out to try and succeed in getting a job/accepted
87
Apprenticeship
Where an someone (generally a student) makes a deal with a business that means they pay for the persons university fees in payment for working at the business and bringing new skills in.
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Authority
The ability to give orders to others and have the orders followed out.
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Accountability
What you can be held responsible for.
90
Award scheme
How a business may motivate their employees to do even better and get something in return
91
Bonus
An extra amount of money on top of your wage/salary.
92
Chain of Command
Who you have authority over and are in charge of.
93
Communication
How a business relays different messages between employees.
94
Contract of Employment
A document stating what your job, roles and responsibilities and pay are in the business.
95
Customer Service
The service given to customers, including service at the time of sale and after the sale
96
CV
What you submit to an employer to try and convince them you are good for the job.
97
Delegation
Where you give someone else the job who is lower down the chain of command than you.
98
Development
The growth of a business to become larger and more well known.
99
Digital Communication
How a business communicates using digital devices (E-mails, Calls etc)
100
Discrimination
Where a business is unfair to an employee due to a disability, race, religion, gender etc
101
Employment agency
Where an external company employees people for a business on their behalf.
102
Employment Law
A law that protects employees from unfair treatment
103
Employment Tribunal
A panel that hears cases where employment laws may have been broken and which comes to a decision either in favour of the employer or employee
104
External communication
Where a business communicates with someone outside the business
105
External recruitment
How a business recruits someone who is outside the business.
106
External methods of recruitment
- Adverts
- Social Media
107
Feedback
The comments and opinions of customers on products/service
108
Flexible working
Being able to work with little-no rigidity
109
Skills gap
Where a business doesn't have the skills to keep the business running efficiently
110
Skills shortage
Where the business has a limited workforce who have the skills needed in the business.
111
Social media
The platform where companies are able to advertise their products easily.
112
Span of control
How much control over other employees someone has.
113
Statement of employment particulars
A document that summarises the main terms of employment for workers.
114
Subordinates
Who you are in charge of
115
Temporary working
Where you are not working for permanent but for a short period of time.
116
Tests
What a business may do to see if you are a suitable candidate.
117
Purpose of HR
To manage employees and workers
118
Trade union
A group of people within a business to ensure a fair pay and job.
119
Training
What a business may do to get more skills in the business.
120
Turnover of labour
The rate at which business employees leave the business and get replaced.
121
Verbal communication
Communication through speaking and talking.
122
Vertical communication
Communication up and down the chain of command
123
Website
A place on the internet a business owns and can advertise their products
124
Working environment
Where an employees works and the surroundings they work in.
124
Working time directive
The law in the UK that states an employee can only be made to work for 48 hours a week unless they agree to more
125
Mobile working
Where you work in multiple places and on the move.
126
Written communication
Communication through notes, letters and physical items.
127
Zero hour contracts
Where someone isn't guaranteed work but when its available they can do it.
128
After sales service
The service offered to customers once they have purchased a product.
129
As described
Where the product is the same as it is described in its product description.
130
Automation
Where you use robots and machines to do the work.
131
Batch production
Where you produce one lot of an item and then change it to something else.
132
Click and collect
Where you purchase a product online and collect it in person
133
Consumer law
What protects customers from faulty products
134
Customer engagement
Where you engage with the customer to try and get them to buy your product
135
Customer service
What you offer the customer to help with queries about a product.
136
E commerce
Online shopping and selling
137
Face to face selling
Where you sell a product in person to someone
138
Fit for purpose
Where a product is right for what it will be used for.
139
Flow production
Where products manufactured are built on a conveyer belt.
140
Job production
Where you produce unique one of a kind products.
141
Labour
How you build/make your products or servicd
142
Location
Where a business is located.
143
Logistics
The process of transporting goods around.
144
Procurement
Where you get something.
144
Product Knowledge
What you know about a product
145
Product Processes
The processes a product goes through to be manufactured
146
Proximity
How close you are to something
147
Quality
How well made a product is.
148
Quality assurance
The process that ensures a product is of good quality to the product.
149
Quality Control
Where you check a product is of high quality.
150
Raw materials
The basic materials needed to make a product.
151
Recalls
Where a business calls for its products to be brought back due to a fault.
152
Returns
Where a customer takes a product back because they have a problem with it.
153
Reputation
The image the business has to the public.
154
Robotics
Machines
155
Satisfactory quality of goods
Where the product is of a high standard relevant to what you paid.
156
Suppliers
Who supplies a business with materials.
157
Telesales
Where you sell a product over the phone.
158
Transport Infrastructure
The infrastructure available to transport goods.
159
ARR
A measure that can help a business see how profitable an investment would be.
160
Break even forecast
A prediction about the break even quantity based on estimates of future sales revenue and costs.
161
Breakeven quantity
How much a business needs to sell in order for its revenue to equal its costs.
162
Advantages of break even
-Gives a figure on how many products a business needs to sell before they make a profit.
-Establishing pricing
163
Disadvantages of break even
-Doesn't take into account other products
-Assumes production and sales are the same
-Time consuming
164
Cash
All money a business has available at any one time.
165
Cashflow forecast
A prediction that sets out how much will be spent and how much will be made.
166
Advantages of net cash flow forecast
-Gives you an idea of where you may struggle for finance
-Better cost control
167
Disadvantages of net cash flow forecast
-Not accurate
-Time consuming
168
Net cashflow
Difference between cash inflows and outflows
169
Opening balance
How much money a business has at the start of a given timeframe.
170
Closing balance
How much money a business has at the end of a given timeframe.
171
Crowdfunding
Where a business asks the public for money to finance investments
172
Expenditure
How much a business spends
173
Expenses
Costs of a business
174
Finance function
175
Financial information
Information related to a businesses money.
176
Fixed costs
Costs that stay the same regardless of output
177
Gross profit
Profit before wages are taken away.
178
Gross profit margin
Gross profit margin is the percentage of gross profit relative to revenue.
179
Difference between gross profit and gross profit margin
Gross profit is the amount of profit left over after subtracting the cost of goods sold from revenues.
Gross profit margin is the percentage of gross profit relative to revenue.
180
Interest
Money added on to a loan at a set rate to pay back a loan.
181
Income
The money a business earns from selling goods/services.
182
Liquidity
The ability to cover short term debts which must be paid in the near future.
183
Loans
Where you borrow a sum of money and pay it back with added interest.
184
Loss
Where costs>revenue
185
Margin of safety
The difference between what you sell and your breakeven point.
186
Negative cashflow
Where your cashflow is negative.
187
Net cash flow
Total inflow - total outflow.
188
Net profit
Gross profit after costs of running the business have been deducted.
189
Net profit margin
Measures how much profit a company makes as a percentage of its revenue.
190
Opening balance
How much a business starts with in their balance at the beginning at the year.
191
Overdraft
When a business takes out for money than they have in their balance.
192
Owners capital
The owners personal money.
193
Positive cashflow
Where your cashflow is generating a profit.
194
Profit
When revenue>total costs
195
Profitability ratios
Calculations such as net profit margin and gross profit margin that help a business interpret data.
196
Retained profit
Profit retained by a business from previous years.
197
Revenue
The money generated from selling products and services.
198
Sale of Assets
Where a business sells their assets (machines, vehicles etc) to generate finance.
199
Security
How secure a business is in their financial areas.
200
Share issue
Where a business issues shares to those who pay money to the business.
201
Short term debts
Bills a business needs to pay in the near future. For example electricity.
202
Taking on a new partner
Where someone joins a business to help a business succeed and make a profit.
203
Time period
A duration of time for which finance is needed.
204
Total Costs
The total costs for a business. It includes fixed cots (rent, gas, electricity etc) and variable costs (the cots to make all the products) added together.
205
Total Inflow
The total amount coming into a business from a business selling their products.
206
Total Outflow
The total amount of finance exiting a business from investments and procurement.
207
Trade Credit
A pay later scheme for new business'
208
Variable costs
The costs to manufacture one product.
209
Net cashflow
total cash inflow - total cash outflow
210
Opening balance
Previous closing balance
211
Closing balance
Opening balance + revenue - total costs
212
Revenue
Selling price per unit x total units sold
213
Variable costs (Total)
quantity x variable costs per unit
214
Variable costs (per unit)
total variable costs/total units sold
215
Total fixed costs
Total fixed costs added together
216
Average fixed costs
Total fixed costs / total years
217
Total costs
Fixed costs + variable costs
218
Profit/loss
Revenue - total costs
219
Gross profit
Revenue - cost of sales
220
Gross profit margin
(Gross profit/Revenue) x 100
221
Net profit
Gross profit - expenses
222
Net profit margin
(Net profit/Revenue) x 100
223
Breakeven
Total fixed costs/(selling price per unit - variable costs per unit)
224
Breakeven quantity
Total fixed costs/(selling price per unit - variable costs per unit)
225
Total profit from investment
Actual or estimated income from a project - actual or estimated costs
226
Average profit from investment
Total profit from investment / total years
227
ARR
(Average annual profit/cost of investment) x 100
230
Capital
Money raised to start or develop a business
231
Child labour
The use of young children below the legal age for employment in order to achieve low cost production.
232
Climate change
The process where average temperature rise and fall in patterns of weather change
233
Consumer income
The average income someone makes in a year
234
Customers
People who purchase something from a business
234
Distribution of incomre
How income is distributed between people.
235
Economic climate
Refers to how well a business is doing in terms of levels of income and employment
235
Economic growth
A period where GDP is rising, rising income and employment
236
Environmentally friendly
Where a business acts in a way that is beneficial to the environment
236
Ethical business
Businesses that act in a morally right way
236
Ethics
What is seen as right and wrong by society
237
Free trade
The absence of restrictions on trade between countries
238
Globalisation
The process by which business activity has become more interconnected
238
Global warming
The rise in average temperatures that scientists say is taking place
238
Gross domestic product
A measure of how much a country produces per year.
239
Income
The amount of money that people receive from work and assets they own.
239
International branding
Creating an image or values for a product that are communicated in countries across the world.
239
International economic climate
Refers to what is happening to income and employment globally.
239
Level of of employment
The number of people who work in a country
239
Level of income
The average income in a country
239
Quota
A limit in terms of weight or value on the amount of goods or services that can be imported.
240
Level of unemployment
How many people are unemployed in a country
240
Pollution
Causing harm to the environment.
240
Recession
A period where GDP is falling, causing income and employment to fall as well.
240
Multinational companies
Businesses that operate in multiple countries.
240
Non-renewable resources
Resources that can only be used once like oil
240
Productivity
A measure of how much work a worker does in a set amount of time.
241
Recycling
When previously used resources are used to create something else.
241
Sustainable production
When production does not lead to the depletion of natural resources.
241
Regulations
Rules about the goods and services that can and cannot be sold in a country.
241
Renewable energy
Resources that can be reused multiple times without damage to the environment.
242
Waste disposl
The process of getting rid of unwanted materials.
242
Tariff
A tax on goods and services that are imported.
242
Unit cost
The cost per unit produced. The greater the productivity of workers, the lower the unit cost.
242
Trade
The import and export of goods and services.
242
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