Business-paper 1-Investigating a small business key words Flashcards

changes in technology

changes in consumer wants

products and services becoming obselete

someone who creates a business, taking on financial risks with the aim of making a profit from the business.

passion, strong people skills, determination, creativity, disciplined, resilience, confidence, self-driven

risk: the likely chance of a negative event occurring such as a business failing. Risks are business failure, financial losses, lack of security (no guaranteed income).

the positive outcome of running a business such as business success, profit, independence (being your own boss)

the difference between the selling price of a product and what it cost to produce

characteristics of a product that make it different/ stand out from other similar products being sold in the market

an act of choosing between two or more possibilities

things that customers require when purchasing a product or service.

a product or service’s ability to fit in with a customer’s lifestyle or routine. How easy some-thing is to use or how easy it is to access a location

Profit = Total revenue – total costs

When a business achieves its aims and objectives

Where a business fails to achieve its aims and objectives. Failure often refers to financial failure when a business makes a loss or becomes insolvent

Business runs out of cash and cannot pay their workers or bills from suppliers

Role of business enterprise is to produce goods or services that meet customer needs and add value

term used to describe both goods or services.

someone who buys and uses goods and services.

physical, tangible products such as a car, a pair of scissors or a smart phone.

non-physical, intangible products, e.g. a taxi journey, a haircut, a TV programme.

the wants and desires of the buyers of a product or the customers of a business. Typical needs are: affordable price, quality, choice, convenience

when a customer likes a product they return to buy a product again and again.

the process of gathering information about the market and customer needs to help inform business decisions Purpose of market research :

· Identify and understand customer needs

· Identify gaps in the market

· Reduce risk

· Inform business decisions

no business is currently serving the needs of customers for a particular product.

anything that alters the market (e.g. changing customer tastes/ fashions

any type of research that you collect yourself, the data has not been collected before eg- surveys, questionnaire, focus group, observation

The data has already been collected and published. eg, governments statistics, newspaper reports, Internet research, reports from market re-search groups, sales records

this is non-numeric data that and aims to find out people’s opinions and what they think. information about consumer opinions, judgements and attitudes.

data that can be expressed as numbers and statistically analysed.

communication among people in which they create, share, and/or exchange information and ideas in virtual communities and online platforms. e.g. Twitter, Facebook, Instagram.

breaking down a market into smaller groups, which are called segments. (businesses can segment customers by: location, demographics, lifestyle , income and age)

statistical data relating to the population and particular groups within it.

the way in which customers live their lives, including the things they like to do in their spare time such as hobbies

the process of creating a diagram that maps all of the products in a market against two com-mon features, for example price and quality. (NB market mapping can help identify a gap in the market or level of competition)

a specific group of customers (segment) at which a business aims its products.

an advantage a business has that enables it to perform better than its rivals in the market and which is both distinctive and defensible.

is a market where there are many businesses selling similar goods and services, - in a competitive markets firms may have to charge lower prices to compete it is important to understand strengths and weaknesses of competitors based on price, quality, location, product range and level of customer service in order to compete

how a business supports and helps a customer before, during and after they purchase a product.

a study undertaken to identify the strengths, weaknesses, opportunities and threats of a business.

making a product stand out from the competition eg branding, packaging, USP

a group of similar products made by a business

the long-term goals of an organisation.

short-term steps taken by an organisation to help it achieve a long-term aim.

short-term steps taken by an organisation to help it achieve a long-term aim.

a percentage of the total market occupied by a business in terms of sales revenue or prod-ucts sold.

a percentage of the total market occupied by a business in terms of sales revenue or prod-ucts sold.

an aim for an business to generate enough revenue to keep trading in a competitive environment (especially important for new businesses, profit may come later)

a business owner generates enough income from their business to meet their needs

a business owner generates enough income from their business to meet their needs

a business owner generates enough income from their business to meet their needs

a business owner generates enough income from their business to meet their needs

the amount of money coming into a business from selling products over a period of time ( Price x quantity)

Costs that do not change in the short-term with the level of output. e.g. salaries, advertising, rent

costs that change as level of output changes e.g. raw materials, electricity, temporary worker wages.

when fixed costs and variable costs are added together.

the level of output where total revenues are equal to total costs; this is where neither a profit or loss is being made, i.e. how many units need to be sold to cover all costs but not yet make a profit.

Break Even Point (BEP) = Fixed costs / price – variable cost per unit. The quantity of products or amount of revenue a business needs to produce and sell in or-der to break even.

when outgoings (costs) are higher than revenue (income).

The difference in the level of output (or sales) and the break even point.

costs that a business has to pay for only once, e.g. buying machinery.

the number of goods or services being produced by an organisation.

how much each product made and sold contributes to fixed cost, then profit. Contribution = selling price per unit - variable costs per unit.

a charge (%) on loaned (borrowed) money or the return paid on savings.

funds available in the bank for a business to pay short-term running costs. NB if a business runs out of cash it cannot pay suppliers or workers and this is called insol-vency and the business fails

the flow of cash into and out of a business over a period of time.

any flow of cash into a business, e.g. from sales/sale of assets/raising capital.

any flow of cash out a business , e.g. to pay salaries, rent, suppliers, interest on loans

a table used to calculate the cash position of a business over time by predicting future cash inflows and cash outflows of a business,

the amount of money a business has in its account at the end of a period of time, e.g. a month, a financial year.

the amount of money a business has in its account at the beginning of an accounting period, e.g. a month, a financial year.

when a business does not have enough cash to pay its bills when they are due.

A source of finance which has to be repaid in under a year. (e.g. trade credit and overdraft)

Purchasing stock or raw materials from a supplier with the option to pay for the goods at a later point. I.e. paying 30 or 60 days after delivery

An overdraft is a buffer that allows a business to overspend (have a negative balance) on its bank account. (Interest is charged by the bank on the amount overdrawn)

A source of finance to be repaid in more than one year.

Borrowing from a bank to be paid back over an agreed period and with an agreed rate of interest.

Investment from an individual or business for a share of a company or agreed return on their investment.

Money saved by the owner or borrowed from friends or family that can be invested in the business

profit reinvested back into the business instead of being returned to shareholders.

business sells something physical of value to raise capital, e.g. machinery, vehicles, equipment.

Investment into a private limited company by its owners (shareholders) buying a share of the business

Small investments into a business project or start-up from a large number of investors through an online crowdfunding platform.

the legal responsibility that a business owner has to pay the debts of the business.

where the level of risk is limited to the amount of money that has been invested in the business. NB Ltd or PLC shareholders have limited liability because the business and the owners are different legal identities.

where the level of risk goes beyond the amount invested in a business, so the personal assets of the business owner can be used to pay off the business’s debts. NB Sole traders & partnerships both have unlimited liability because the business and the owner(s) are deemed to be one and the same legal entity

the different legal structures of a business. I.e. Private Limited Company (Ltd) / Public limited Company (PLC) / sole trader / partnership

a type of unincorporated business that is owned by one person and who has unlimited liability.

a business that is owned by a group of two or more people who share the financial risk, the decision-making and the profits. (they also have unlimited liability)

an incorporated business that is owned by shareholders who have limited liability. Shares are not traded on a public stock exchange.

people who have bought shares in a business to receive a share in future profits.

in the UK, the official government organisation that keeps a record of all UK companies and information about them. A company that wishes to become a limited company must, by law, be registered with Companies House.

when one business gives another business permission to trade using its name and products in return for a fee and share of its profits.

an entrepreneur who pays a fee to trade using the brand name and products of an established business

an established business that gives permission to a local entrepreneur to trade using its brand name and products - in return for a fee and royalty payments. (eg McDonalds, Subway, KFC etc)

the place where a business operates. A good location might be dictated by proximity to market, skilled labour, materials and competitors/competition (NB the internet & e-commerce has changed location decisions)

substances used as an input to a production process for manufacturing into finished goods.

the costs associated with producing goods and services.

decisions made by a business to attract customers: a combination of decisions linked to price, product, place and promotion Price – the amount a customer needs to pay to receive the product. Product – the actual good or service that the business is offering for sale. Promotion – the range of activities a business uses to make customers aware of its products and to encourage customers to buy them. Place – where a customer can buy the product a business sells. This could be online, in a store, from a vending machine etc.

any form of communication from a business that is carried out using email, social media or text message and websites.

using the internet to carry out business transactions, i.e.. the activity of buying and selling goods and services online.

promotion of a positive image about a product or business through giving positive information to the general public, other businesses or to the press.

a business which specialises in selling goods in small quantities to the consumer.

a business that buys in bulk from a manufacturer or other supplier and then sells the stock on in smaller quantities to retailers.

a document that outlines how an entrepreneur is going to set up a new business. Includes info about: the business idea; business aims and objectives; target market (market research); forecast revenue; cost and profit; cash-flow forecast; sources of finance; location; marketing mix

goals for a business that are Specific, Measurable, Achievable, Realistic and Time-bound.

the predicted amount of money coming in and going out of the business over a period of time.

a fixed sum of money lent by a bank to an individual or a business for a specific purpose

any person who has an interest in a business and/or is affected by the activities of a business. (Stakeholder groups include: owners/shareholders, employees, customers, managers, suppliers, local community, pressure groups, the government)

when different stakeholders seriously disagree on business decisions that affect them. (e.g. owners want to increase profit and workers want higher wages)

businesses that sell (or supply) products to other businesses

the people and organisations given the authority to pass laws and govern a country.

a group of people who live /work in a geographical area in which a business operates.

individuals who are in charge of a certain group of tasks or group of people.

the people that a business belongs to.

groups of people who join together to try and influence businesses or the government for a particular cause e.g. ethically in relation to the environment/animal welfare/human rights.

a person who is hired for a wage, salary, fee or payment to perform work for an employer or business.

the consumer or person who ultimately uses a product.

a sum of money paid regularly by a company to its shareholders out of its profits.

· Different types of technology used by business: e-commerce, social media, digital communication, payment systems.

· Technology influences business in terms of: sales, costs, marketing mix.

communication among people in which they create, share, and/or exchange infor-mation and ideas in virtual communities and online platforms. e.g. Twitter, Facebook, Instagram, Tik Tok,

communication between people using SMS (text messaging), email and online social media platforms.

when a business uses social media to encourage the public to share information about its goods and services

electronic ability to transfer payments quickly & safely from one bank account to another. (to pay for products and services by businesses and its customers.)

security devices used to verify a person's identity through their unique biological traits e.g. optical, fingerprint, and voice recognition.

the amount of products or services that are being sold.

the expenses and bills a business has to pay.

laws set by governments that set out a strict set of rules which businesses and individuals can must comply with Two strands: principles of consumer law: quality and consumer rights principles of employment law: recruitment, pay, discrimination and health and safety.

an Act that protects the public's buying rights when purchasing goods and services

the person who ultimately uses (or consumes) a product.

people are unlawfully treated differently based on a particular characteristic, such as their: ethnicity, age, race, religion, gender, disability.

the lowest legal rate of pay for employees, depending on their age and their type of employment

concerned with protecting the safety, health, and welfare of people in a business.

The impact of the economic climate on businesses: unemployment, changing levels of consumer income, inflation, changes in interest rates, government taxation, changes in exchange rates.

the number of people of working age who are able to work but are not currently in work

all activity related to production, consumption, and trade of goods / services in an area

the amount of money that a consumer earns from either work or investment

the amount of money consumers have to spend.

a measure of the increase in prices over a period of time.

the amount charged for borrowing money or as a reward for savings.

a percentage of profits, income or revenue collected by a government to fund public services such as schools, hospitals, police etc.

the general state of the regional, national, or global economy.

a measure of the value of one currency against the value of another currency. SPICED- Strong Pound means IMPORTS are CHEAP and UK EXPORTS are DEAR (Expensive)

a factor that is outside the control of a business

an estimate of the total value of goods and services produced in a country.

a body that ensures all advertising claims are accurate and true so consumers are not misled.

a body that checks that businesses adhere to strict rules when selling goods and services in order to protect the public from being sold counterfeit products