Unit 1: Setting Up A Business Flashcards
1
Q
Business
A
An activity that requires the organisation of resources to achieve a reward, whilst running a risk
2
Q
Entrepreneur
A
An individual with an idea or business
3
Q
Gap in the market
A
A business opportunity that is either a completely new idea or adds something different to an existing product or service.
4
Q
Franchise
A
The legal right to use the name and logo of an existing firm and sell the same products.
5
Q
Business Aim
A
A stated target for the future. For example, a new business may have the aim to survive its first year of trading.
6
Q
Business Objective
A
A clearly defined target for a business to achieve over a certain period of time.
7
Q
Growth
A
An increase in turnover(sales), market share or profit.
8
Q
Profit
A
What is left after costs have been deducted from revenue.
9
Q
Profit Margin
A
Profit made as a proportion of sales revenue.
10
Q
Sales
A
The amount sold or the value sold.
11
Q
Market Share
A
The proportion of total market sales sold by one business.
12
Q
Customer Satisfaction
A
How happy the customer is with the product or service.
13
Q
Ethics
A
The moral questions on which decisions are made and the impact the business has on its internal and external environment.
14
Q
Turnover
A
The value of sales made during the trading period, also called revenue.
15
Q
Stakeholder
A
An individual or group with an interest in a business, such as employees, customers, managers, shareholders, suppliers, competitors and the local community.
16
Q
Business Plan
A
A statement showing how a business sets out to achieve its aims and objectives.
17
Q
Funding
A
The capital provided for the various stages of business growth by different sources of finance, either on a short- or long-term basis.
18
Q
Forecast
A
A technique where the business attempts to estimate future sales, or other financial variables.
19
Q
Risk
A
The potential for loss but rewards in business make it a calculated gamble.
20
Q
Uncertainty
A
Not knowing the future, or what is going to happen.
21
Q
Sole Trader
A
The most common form of business organisation, often just one person
22
Q
Partnership
A
The simplest way two or more people can be in business together where partners are jointly and personally responsible for debts.
23
Q
Unlimited liability
A
Unincorporated businesses, such as sole traders and partnerships, have unlimited liability, which means that the owners are responsible for all the business’s debts.
24
Q
Incorporation
A
The process of forming limited liability company such as a private limited company or PLC.
25
Limited Liability
Investors (shareholders) in a limited company can only lose their investment in the business if it fails; they cannot be forced to sell assets to pay off the firm's debts.
26
Technology
In relation to business location, this refers to the use of e-technology, such as the Internet and email, to create a virtual market between the business and the consumer.
27
Logistics
The process of buying, managing and delivering goods, from the point of manufacture to the end customer.
28
Market Research
Research that enables a firm to find out about its market, its customers and its potential customers
29
Primary Research
Gathering new information specifically for the purpose identified by the business
30
Secondary Research
Research that uses information that has already been gathered for another purpose
31
Questionnaire
A set of questions designed to discover information relating to a product or service. These may be left for consumers to complete themselves, carried out by using face-to-face interviews by researchers or from the basis of a telephone or postal survey
32
Internet Research
Using information that has already been published on the internet to gather information about the market for a firm's products or services
33
Telephone Survey
A series of set questions delivered over the telephone to consumers as a method of primary research
34
Supplier Feedback
Gathering information from companies that supply products or services on their forecasts for what is likely to happen in the market in the future
35
Customer Feedback
Formal or informal responses from customers to the product or service offered by a business
36
Focus Group
In-depth discussion with a small group of consumers (8-10), which probes their feelings towards a product or service.
37
Marketing Mix
The 4 major variables for which decisions must be made when marketing a product
38
Product
The service or physical good being sold by the company
39
Price
The amount charged by a business for its product or service
40
Promotion
All the ways a business communicates to consumers with the aim of selling products.
41
Place
The methods used by a firm to sell its products or services to consumers
42
Product range
The collective term given to all the products made or sold by a business
43
Product differentiation
Attempting to make your products stand out from those of your rivals through advertising, design or different product features
44
Demand
The quantity that consumers are willing and able to buy at the current price level
45
Marketing budget
The amount to be spent on marketing and promotion over a certain period of time
46
Advertising
Communication to consumers, using television and other media, to encourage them to buy a product
47
Publicity
Gaining press coverage for your business
48
Word-of-mouth recommendations
Getting customers to talk to their friends and family about your product or service
49
Direct mail
Sending promotional material directly to consumers
50
Personal selling
Employing a person to visit potential customers to persuade them to buy your goods and services
51
Website
Many businesses now have their own website on the Internet to provide information about their business for consumers
52
Banner
An Internet advert shown on another firm's website in the form of horizontal bar across the page
53
Pop-up
An Internet advert that 'pops-up' in a new window when visiting another company's website
54
Channel of distribution
The method used to transfer goods or services from the producer to the final consumer
55
e-Commerce
Transactions between people and business carried out entirely via the Internet
56
Wholesaler
Buys large quantities of a product from producers and break them down into more manageable batches for retailers or consumers
57
Retailers
Offer consumers a convenient and comfortable environment in which to buy products
58
Profit
What is left after costs have been deduced from revenue
59
Loss
When revenue is less than costs
60
Costs
The expenses a business pays for in producing goods and services
61
Revenue
The amount of money a business receives from selling goods or services
62
Cash
Money that the business has available to it straight away, such as money in its bank account
63
Forecast
A technique where the business attempts to estimate
64
Cash Flow Forecast
A prediction of a business's future cash inflows and outflows, showing the closing balance
65
Bank Loan
Finance provided by the bank that will be paid back over a set period
66
Loan From Friends and Family
Finance provided by friends or family where the interest rate and repayment periods are agreed with them
67
Overdrafts
A flexible arrangement that allows a business to spend more money than it has in its bank account, as and when it needs the finance
68
Mortgage
Long-term finance loan for purchasing a building
69
Trade Credit
Suppliers who allow debts for goods and services to be paid one or two months after delivery
70
Grant
Money given to a business by a government or organisation
71
Net Cash Flow
Difference between cash in and cash out of a business over a time period
72
Opening balance
The money the business has at the start of the month. It is the closing balance from the previous month.
73
Closing balance
The amount of cash the business has at the end of each month
74
Recruitment
Attracting people to apply for a job vacancy
75
Part-time Workers
Working for a proportion of the full working week
76
Internal Recruitment
Appointing an existing employee of the business to fill a vacancy
77
Full-time Workers
Working for the normal full working week
78
Wage
When an employee is paid a fixed amount for each hour or the day they work
79
Salary
When a worker is paid a fixed amount per month or year, no matter what hours they work
80
Pension
Payments made to retired workers in addition to the state pension
81
Non-Monetary Rewards
Rewards to employees that do not involve the direct payment of money to them
82
Commission
When the employee gets a percentage of the amount they sell
83
Equal Pay Act 1970
Men and women should be paid the same for the same job.
84
Minimum Wage Act 1998
The minimum amount that a business is allowed to pay a worker per hour
85
Race Discrimination Act 1976
A business can not discriminate against a person in the workplace based upon their race
86
Disability Discrimination Act 1995
A business can not discriminate against a person in the workplace based upon their disability
87
Maternity Pay
Pay given to expectant mothers for having a child
88
Paternity Pay
Pay given to expectant fathers for having a child
89
Sick Pay
Pay given to workers for being off sick (anything longer than 3 days requires a doctor's notice)
90
Holiday
Length of time a worker is allowed off work on full pay
91
Health and Safety Act
Employees have the right to work in a safe and healthy environment
92
Job production
Making one-off, specialised products for each customer.
93
Batch production
Groups of identical items that pass through different stages of the production process at the same time.
94
Operational efficiency
Producing goods and services to an acceptable standard with as few resources as possible to keep costs per unit low.
95
Unit costs
The average cost of making each unit.
96
Specialisation
Work is divided into separate tasks or jobs that allow workers to become skilled at one of them.
97
Information communication technology
The use of electronic technology to gather, store, process and communicate information.
98
Robot
A computer-controlled machine able to perform a physical task.
99
Computerised stock-control programs
The use of computers to keep records of all stocks and recorder necessary stock automatically.
100
Computer-aided design
Using computer-based tools to design products, such as buildings, cars and clothes.
101
Quality product
A good or service that meets customers' expectations and is therefore 'fit for purpose'
102
Customer expectations
The minimum quality standards for a product or service that is acceptable to consumers.
103
Quality assurance
A system of agreeing and meeting quality standards at each stage of production.
104
E-commerce
The buying and selling of goods and services over the internet.
105
Customer Service
Providing services to customers before, during and after purchase to standards that meet their expectations
106
Customer protection
Laws that protect the interests of consumers when buying goods or services
107
Sales of Goods Act 1979 and Supply of Goods and Services Act 1982
Goods and services must be as described, fit for purpose and made to a satisfactory quality
108
Consumer Protection Act 1987
Compensation must be paid to a consumer who suffers injury or damage to property when correctly using the good
109
Competition Act 1998
Businesses must not agree to fix prices at a high level with other similar businesses
110
Consumer Protection 2000
Protects consumers who purchase goods not in person and so businesses must give clear information and a cooling off period
111
Consumer Protection from Unfair Trading Regulations 2008
Advertisements must not be misleading or deceive and allow consumers to check price using comparison websites
