Section 1- What Is Business? Flashcards
What is the difference between aims and objectives?
A business aim is the overall long-term target or goal of the business, whereas business objectives are the short-term steps a business needs to take to meet its overall aims.
What is a mission statement?
A businesses overall purpose and their intentions for the future of the company. They can also reveal a businesses values, standards and strategies.
i.e. Google: “To organize the world’s information and make it universally accessible and useful.”
What is a corporate objective?
The goals of the business as a whole. These depend on the size of the business.
i.e. A new business = to survive
vs.
A big international company = growth
What are functional objectives (departmental objectives) ?
Detailed objectives that are specific to each department.
What are functional objectives (departmental objectives) ?
Detailed objectives that are specific to each department.
What is a SMART objective?
A specific, measurable, agreed, realistic and time-bound objective.
What is revenue?
Money a business makes from sales before tax or costs have been subtracted.
What is the equation for revenue?
revenue = selling price per unit x quantity of units sold
What is a fixed cost?
They don’t change with output.
e.g. salaries or rates
What are variable costs?
They rise and fall as output changes.
e.g. wages, raw material costs or packaging costs
What is the equation for variable costs?
Total variable cost = variable cost per unit x number of units sold
What is profit?
The surplus money left over after costs have been payed.
What is the ‘private sector’?
The part of the economy that is made up of private enterprises- owned or controlled by individuals or groups of individuals.
What is a ‘ corporate business’ ?
A business with a legal identity separate to that of the owner/s.
What does it mean to have ‘limited liability’ ?
The financial responsibility is restricted to the amount an individual has invested.
What is a private limited company ( Ltd)?
Relatively small companies that tend to be family owned. Shares to the business cannot be sold via the stock market.
e.g. plumber or hairdresser
What is a public limited company (plc)?
Tend to be larger companies that are able to sell their stock on the market. Plc’s have to publish much of their data and information to the public as per government demands.
e.g. Royal Mail Plc or Tesco Plc
What is a sole trader?
Businesses owned by an individual ( unlimited liability). The owner is able to receive all the profits.
What is a partnership?
A group of 2-20 people, there are many people capable of contributing expertise and capital. Disagreement is common.
What is a partnership?
A group of 2-20 people, there are many people capable of contributing expertise and capital. Disagreement is common.
What is meant by the ‘public sector’?
Organisations that are owned and run by the government.
e.g. the NHS
What is a ‘not-for-profit’ ( social enterprise) business?
A business that has objectives other than making a profit.
Charities= British Red Cross
What is a mutual?
Businesses run for the benefit of their members.
e.g. Yorkshire Building Society
