Unit 1 - What is Business? Flashcards
Goods/Inventory
Physical products that are either produced or purchased by a company for the purpose of selling them. (Stock)
Services
A service business provides a skilled service, personal labor, or expertise instead of a physical product.
Products
A product is an object, or system, or service made available for consumer use as of the consumer demand.
Mission statement
A brief statement that outlines an organisation’s purpose, goals, and values.
Aims
The long-term strategy for the business.
Objectives
A measurable step that a business takes to achieve its aim.
Profit
The money you have left after paying for business expenses.
Cash-flow
A measurement of the amount of cash that comes into and out of your business in a particular period of time.
Stakeholders
Anyone that has an interest in a company and can either affect or be affected by the business.
Revenues
The total amount of money received from carrying out the business operations.
Fixed costs
Expenses that a company pays that do not change with production levels. e.g Rent
Variable costs
Costs that change as the quantity of the good or service that a business produces changes.
Total costs
The sum of fixed costs and variable costs.
Average costs
The cost per unit manufactured in a production run.
Sole trader
A self-employed person who owns and runs their own business as an individual.
Unlimited liability
When owners are personally liable for any business debts.
Incorporation
The formation and registration of a limited company.
Shareholder
Someone that owns at least one share of the companies stock and doesn’t act on the day-to-day business activities.
Limited liability
The company is a separate legal entity to its owner or owners so debts won’t affect owners personally.
Privatisation
The process of transferring an enterprise or industry from the public sector to the private sector.
Market conditions
The characteristics and the situation of a particular market at a particular point of time.
Demand
A consumer’s desire to purchase goods and services and willingness to pay a specific price for them.
Gross domestic product
Measures the total value of all of the goods made, and services provided, during a specific period of time.
Real incomes
Measure the amount of disposable income available to consumers
