Unit 1 Key Terms Flashcards

1
Q

Enterprise

A

Spotting an opportunity to provide a product or service that people are willing to pay

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2
Q

Initiative

A

The ability to use your judgement to make decisions and do things without needing to be told what to do

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3
Q

An entrepreneur is someone who…

A

Undertakes new ventures, takes risks and shows initiative

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4
Q

Businesses exist to …

A

Meet the needs of customers in order to make profit

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5
Q

Potential business rewards include…

A

Financial, self-satisfaction and independence

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6
Q

Business Plan

A

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.

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7
Q

Sole trader

A

A sole trader describes any business that is owned and controlled by one person.

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8
Q

Sleeping Partner / Limited Partner

A

They invest money into the business but do not take part in the day to day running of the business or any decision making

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9
Q

Limited Liability

A

This is where the responsibility for the debts of the company is limited to a certain amount that the shareholder has put in

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10
Q

Partnership

A

When is a business is owned and run by 2 or more people

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11
Q

LLP

A

Partnerships that pay the liability to the amount you put in when investing money into the business

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12
Q

Ltd

A

Private Limited Company

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13
Q

PLC

A

Public Limited Company

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14
Q

Survival

A

A short term objective, typical for start up businesses, or when a new firm enters the market or at a time of crisis.

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15
Q

Profit Maximisation

A

To make the most profit as possible. Other objectives businesses may have which are linked to this are increasing revenue or decreasing costs.

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16
Q

Growth

A

To expand the business possibly be opening new locations in this country or abroad.

17
Q

Market Share

A

To increase the volume or value of sales, measured as a percentage or the entire market.

18
Q

Customer Satisfaction

A

An objective to keep customers happy through good service or better products than the competition.

19
Q

Stake Holder

A

Somebody who has an interest or concern in the business.

20
Q

Growth

A

The business increasing in size/ expanding/ getting bigger.

21
Q

Organic Growth

A

Increasing sales of products and services. It is internal as in it grows by increasing its own size rather than taking over another business.

22
Q

External Growth

A

This is growth of a business by takeover of merger.

23
Q

Merger

A

Two or more firms to create a new business

24
Q

Takeover / Aquisition

A

This is when one business buys another business. In a case of a limited company, this means buying more than 50 percent of shares.

25
Primary Sector
The first stage of production.
26
Secondary Sector
The second stage of production. These businesses use the raw materials to manufacture products.
27
Tertiary Sector
Concerned with providing a service.
28
Horizontal Growth
A business joins another business at the same stage of production.
29
Backwards vertical
A business joins with its suppliers.
30
Forward Vertical
A business joins with its distributors.
31
Diversification
A business joins another business in the same market.
32
Deed of partnership
A legal document involving responsibilities: investments and profits shared
33
Capital
Profit made
34
Continuity
The business will need to be handed to family, friends if the owner dies or needs to retire
35
Dividend
Getting a share of a profit each year
36
Profit
Difference between revenue an costs
37
Satisficing
Making just enough profit to provide the business owner with a decent living
38
Shareholder
Owns the business so is therefore a stakeholder