Unit 1 Key Terms Flashcards
Enterprise
Spotting an opportunity to provide a product or service that people are willing to pay
Initiative
The ability to use your judgement to make decisions and do things without needing to be told what to do
An entrepreneur is someone who…
Undertakes new ventures, takes risks and shows initiative
Businesses exist to …
Meet the needs of customers in order to make profit
Potential business rewards include…
Financial, self-satisfaction and independence
Business Plan
This sets out how the owners/managers of a business intend to achieve its objectives. Without such a plan, a business is more likely to fail.
Sole trader
A sole trader describes any business that is owned and controlled by one person.
Sleeping Partner / Limited Partner
They invest money into the business but do not take part in the day to day running of the business or any decision making
Limited Liability
This is where the responsibility for the debts of the company is limited to a certain amount that the shareholder has put in
Partnership
When is a business is owned and run by 2 or more people
LLP
Partnerships that pay the liability to the amount you put in when investing money into the business
Ltd
Private Limited Company
PLC
Public Limited Company
Survival
A short term objective, typical for start up businesses, or when a new firm enters the market or at a time of crisis.
Profit Maximisation
To make the most profit as possible. Other objectives businesses may have which are linked to this are increasing revenue or decreasing costs.
Growth
To expand the business possibly be opening new locations in this country or abroad.
Market Share
To increase the volume or value of sales, measured as a percentage or the entire market.
Customer Satisfaction
An objective to keep customers happy through good service or better products than the competition.
Stake Holder
Somebody who has an interest or concern in the business.
Growth
The business increasing in size/ expanding/ getting bigger.
Organic Growth
Increasing sales of products and services. It is internal as in it grows by increasing its own size rather than taking over another business.
External Growth
This is growth of a business by takeover of merger.
Merger
Two or more firms to create a new business
Takeover / Aquisition
This is when one business buys another business. In a case of a limited company, this means buying more than 50 percent of shares.
Primary Sector
The first stage of production.
Secondary Sector
The second stage of production. These businesses use the raw materials to manufacture products.
Tertiary Sector
Concerned with providing a service.
Horizontal Growth
A business joins another business at the same stage of production.
Backwards vertical
A business joins with its suppliers.
Forward Vertical
A business joins with its distributors.
Diversification
A business joins another business in the same market.
Deed of partnership
A legal document involving responsibilities: investments and profits shared
Capital
Profit made
Continuity
The business will need to be handed to family, friends if the owner dies or needs to retire
Dividend
Getting a share of a profit each year
Profit
Difference between revenue an costs
Satisficing
Making just enough profit to provide the business owner with a decent living
Shareholder
Owns the business so is therefore a stakeholder
