Key Words Flashcards
What is a Shareholder
A person who has invested in a business. Bought a share of the business for a sum of money.
What is Limited Liability
A person only lose what they invest in the business
e.g if I invest £250 I can only lose £250
What is Unlimited Liability
Partners and sole traders are responsible for paying off all of the company debts personally if the company can’t make payments.
What is LTC
Private limited company
What is PLC
Public limited company
What is Land
Natural resources e.g forest, sea
What is Labour
Mental and physical effort
What is Enterprise
An enterprise is someone who organises the 3 factors of production
What is Capital
Manufactured goods used to make other goods and services eg machinery
3 factors of Production
Land, Labour and capital
What is a Primary Sector Business
Extracts raw material from natural resources eg farming
What is a Secondary Sector Business
Take raw materials (steel) and turn them into the final product (cars) eg factories
What is a Tertiary Sector Business
Provide a service. Provide the final product
Unique Selling Point (USP)
Something about your product or service that’s different from competitors. It makes your product or service standout
Stakeholder
A stakeholder is anyone with an interest in a business. Stakeholders are individuals, groups or organisations that are affected by the activity of the business.
E.g employee, suppliers, customer
Entrepreneur
Someone who is willing to take risks involving in starting a business.
Social Entrepreneur
A business that is set up to help society rather than to make money
Consumer
A purchase of a good or service in retail. A user of the product
USP
Unique selling point
Franchisor
Selling the rights to the business name
Franchisee
Buying the rights to the business name
Friendly takeover
Shareholders are agreeable to takeover
Hostile Takepver
Shareholders are opposed to takeover
Horizontal merges
Occurs between business in the same industry at the same stage of production
Vertical merges
Occurs between business in the same industry but at different stages of productions
Diversification/Conglomerate merges
Occurs when business completely different industries merge
Diversification/Conglomerate merges Advantages
Risks is reduced, works when a business is very successful one market and need to expand
Horizontal merges Advantage
Economies of scale less competition greater share of market power
