Theme 1 Flashcards
Added value
The difference between the cost of the materials taken to make a product and the price
that is charged for the product.
Aims and objectives
The goals of a business. These may be financial or non‐financial.
Breakeven
The number of products a business must sell so that its total revenue is the same as its
total costs. At this point the business will make no profit or loss.
Business plan
A plan for the development of a business, giving details such as the products to be
made, resources needed, and financial forecasts.
Business success
A measure which could be sales, market share or profit related.
Cash flow
The flow of money into and out of a business over a period of time.
Cash inflow (Receipts)
Money coming into the business. E.g. Revenue, a loan or another source of
finance.
Cash outflow (Payments)
Money leaving the business. E.g. Wages, suppliers, loan repayments or
advertising.
Choice
A range of products aimed at differing needs and segments.
Closing balance
The amount of money left at the end of the current time period.
Competition
When companies produce comparable products or services within the same market.
Competitive advantage
The advantage one company has over another, or several others.
Competitive environment
A market which has many competitors.
Consumer
The person who uses the product.
Consumer income
The amount a person or household has to spend, after paying tax.
Consumer rights
What the consumer is entitled to by law.
Crowdfunding
Where a large number of individuals invest into a business project on internet sites
such as Kickstarter.
Customer
The person who buys the product.
Customer needs
What the customer wants, these can change over time. E.g. Price, quality, choice or
convenience.
Customer service
Having a clear understanding of customer expectations and delivering.
Demographics
The characteristics of the population in terms of age and gender.
Digital communication
Communicating with customers electronically through things such as a
website, social media and email.
Discrimination
Judging someone based on their age, gender, race, religion or disability.
Dynamic business
Businesses responding to what consumers want.