Key words Business GCSE Flashcards
Definition of adding value
How a business sells a product for more than it costs through the processes they apply
Definition of Aims and Objectives
Aim: long term goal of a business
Objective: the short term goals that will help a business achieve its aim
Definition of Business Environment
The external factors, i.e. the economy, that influence how a business operates
Definition of a Business Plan
A document produced by a new or existing company that shows what its objectives are and how it will meet them
Definition of Capital
The initial money that is needed to start a business that is linked to purchasing machinery and premises
Definition of cash flow
The money that flows in and out of a business
Definition of a cash-flow forecast
The prediction of how much money will come into and out of a business over a future time period
Definition of cash inflows
The money that comes into a business from sales and investment and other sources
Definition of cash outflows
The money leaving a business that it spends on raw materials, labour and other expenses
Definition of closing balance
The total cash - flow left at the end of a period
Definition of competition
Other businesses that produce the same or similar goods or services
Definition of competitive advantage
A business that has a marketing mix strategy which enables it to be more successful than its competitors
Definition of consumer income
How much money consumers have to spend on their needs and wants
Definition of consumer law
Legal restraints that protect the consumer from unfair business practice
Definition of consumer rights
Where consumers are protected by laws in terms of product quality, returning goods, repairs and replacements etc
Definition of consumer spending
The level of spending that consumers undertake related to their income
Definition of crowdfunding
Finance raised through internet appeals from a large number of small investors aka the general public
Definition of customer service
How a business looks after its customers before, during and after they make a purchase
Definition of Demographics
Factors related to the population, often used during segmentation
Definition of Discrimination
When an employer chooses its worker based on a particular characteristic, many of which are illegal. For example: age, gender, race etc
Definition of dividend
The share of the profit received by a shareholder
Definition of Employment Law
Legal constraints that protect the employees of a business from unfair business practices
Definition of Enterprise
A business that has the objective of making a profit
Definition of fixed costs
Business costs that do not vary with output
Definition of a focus group
A group of actual potential customers who discuss and take part in market research
Definition of a franchise
Where a business acquires the rights to use the name and products of another business
Definition of a franchisee
The business which runs a franchise in a specific area
Definition of a franchisor
The seller of a right to operate a franchise
Definition of a gap in the market
An opportunity for a business to provide a good or service that is not currently available
Definition of Insolvency
Where a business runs out of cash and is not able to obtain new finance
Definition of internal finance
Finance that is sourced from within the business i.e. retained profit
Definition of limited liability
The protection enjoyed by shareholders who can only lose the money they have put into the company
Definition of a loss
Where the costs of a business are greater than it income
Definition of Margin of Safety
The additional that a business produces or expects to produce more than it breakeven output
Definition of market research
Information from existing or potential customers about their reaction to the good or service
Definition of marketing mix
The “ingredients” needed for a business to be successful. Known as the 4P’s they are: Product, Place, Price and Promotion
Definition of market segments
A way of dividing up the market into different groups of potential customers
Definition of obsolete
When a type of product is no longer produced because it is no longer needed or has been replaced
Definition of overdraft
A source of finance for a business where it is allowed to take more money out of its account than it has deposited
Definition of overheads
Costs or expenses that a business incurs
Definition of a Partnership
Where a business is started and owned by more than one person, who then share the profits and the responsibilities
Definition of a Pressure group
A collection of individuals who have a common cause and campaign to achieve it
Definition of Primary research
First - Hand information gathered by a business about existing and potential customers, for example: surveys, questionnaires etc
Definition of a private limited company
A company where shares can only be sold to “family and friends”. (Known as Ltd)
Definition of a public limited company
The kind of limited company whose shares can be bought on the stock exchange. (Known as Plc)
Definition of Retained profit
A source of finance based on money that a business keeps back after paying shareholders dividends and giving owners a share of the profit
Definition of secondary research
Already existing information and existing and potential customers. For example, census, internet etc
Definition of segmentation
A way of dividing up the market into different categories of potential customers
Definition of selling assets
When a business sells its land, buildings, machinery, or equipment that are no longer needed to raise additional finance
Definition of share capital
The money raised by the business from selling shares
Definition of a shareholder
An owner of a company who receives a dividend as a return for their investment
Definition of a sole trader
Where a business is started and owned by one person who keeps all the profits, but holds all the responsibilities
Definition of a stakeholder
An individual or group that is directly or indirectly affected by the actions of the business. 9 types of stakeholders are: - Customers - Owners - Managers - Employees - Government - Local community - Pressure Groups - Suppliers - Shareholders
Definition of survival
A business objective where continuing in existence becomes the short term goal
Definition of Trade credit
Where a business orders and receives supplies, but pays them back at a later date
Definition of Unique Selling Point (USP)
What makes a business’ goods or services different from competitors
Definition of unlimited liability
If a business becomes bankrupt, sole traders and partnerships are personally liable for their business’s debts
Definition of variable costs
Business costs that change with output, such as raw materials
Definition of venture capital
A source of finance normally for small businesses where the venture capitalist takes a stake in the business
Define Sole Trader
One person who is the exclusive owner of the business, entitled to keep all profits after tax has been paid but liable for all losses
