front 1 New business ideas arise from; | back 1 changes in technology changes in consumer wants products and services becoming obselete |
front 2 Entrepreneur | back 2 someone who creates a business, taking on financial risks with the aim of making a profit from the business. |
front 3 entrepreneur characteristics | back 3 passion, strong people skills, determination, creativity, disciplined, resilience, confidence, self-driven |
front 4 Risk | back 4 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). |
front 5 Reward: | back 5 the positive outcome of running a business such as business success, profit, independence (being your own boss) |
front 6 Add value | back 6 the difference between the selling price of a product and what it cost to produce |
front 7 Unique selling point (USP) | back 7 characteristics of a product that make it different/ stand out from other similar products being sold in the market |
front 8 Choice | back 8 an act of choosing between two or more possibilities |
front 9 Customer needs | back 9 things that customers require when purchasing a product or service. |
front 10 Convenience | back 10 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 |
front 11 Profit | back 11 Profit = Total revenue – total costs |
front 12 Success | back 12 When a business achieves its aims and objectives |
front 13 Failure | back 13 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 |
front 14 Insolvent | back 14 Business runs out of cash and cannot pay their workers or bills from suppliers |
front 15 Enterprise | back 15 Role of business enterprise is to produce goods or services that meet customer needs and add value |
front 16 Product | back 16 term used to describe both goods or services. |
front 17 Consumer | back 17 someone who buys and uses goods and services. |
front 18 Good | back 18 physical, tangible products such as a car, a pair of scissors or a smart phone. |
front 19 Services | back 19 non-physical, intangible products, e.g. a taxi journey, a haircut, a TV programme. |
front 20 Customer needs | back 20 the wants and desires of the buyers of a product or the customers of a business. Typical needs are: affordable price, quality, choice, convenience |
front 21 Repeat purchase | back 21 when a customer likes a product they return to buy a product again and again. |
front 22 Market research | back 22 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 |
front 23 Gap in the market | back 23 no business is currently serving the needs of customers for a particular product. |
front 24 Market trends | back 24 anything that alters the market (e.g. changing customer tastes/ fashions |
front 25 Primary research | back 25 any type of research that you collect yourself, the data has not been collected before eg- surveys, questionnaire, focus group, observation |
front 26 secondary research | back 26 The data has already been collected and published. eg, governments statistics, newspaper reports, Internet research, reports from market re-search groups, sales records |
front 27 qualitative data | back 27 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. |
front 28 Quantitative data | back 28 data that can be expressed as numbers and statistically analysed. |
front 29 Social media | back 29 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. |
front 30 Market segmentation | back 30 breaking down a market into smaller groups, which are called segments. (businesses can segment customers by: location, demographics, lifestyle , income and age) |
front 31 Demographics | back 31 statistical data relating to the population and particular groups within it. |
front 32 Lifestyle | back 32 the way in which customers live their lives, including the things they like to do in their spare time such as hobbies |
front 33 Market map | back 33 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) |
front 34 Target market | back 34 a specific group of customers (segment) at which a business aims its products. |
front 35 Competitive advantage | back 35 an advantage a business has that enables it to perform better than its rivals in the market and which is both distinctive and defensible. |
front 36 Competitive environment | back 36 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 |
front 37 customer service | back 37 how a business supports and helps a customer before, during and after they purchase a product. |
front 38 SWOT analysis | back 38 a study undertaken to identify the strengths, weaknesses, opportunities and threats of a business. |
front 39 Differentiation | back 39 making a product stand out from the competition eg branding, packaging, USP |
front 40 Product range | back 40 a group of similar products made by a business |
front 41 Aims | back 41 the long-term goals of an organisation. |
front 42 Objectives | back 42 short-term steps taken by an organisation to help it achieve a long-term aim. |
front 43 SMART objectives | back 43 short-term steps taken by an organisation to help it achieve a long-term aim. |
front 44 Market share | back 44 a percentage of the total market occupied by a business in terms of sales revenue or prod-ucts sold. |
front 45 Sales | back 45 a percentage of the total market occupied by a business in terms of sales revenue or prod-ucts sold. |
front 46 survival | back 46 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) |
front 47 Financial security | back 47 a business owner generates enough income from their business to meet their needs |
front 48 capital | back 48 a business owner generates enough income from their business to meet their needs |
front 49 social objectives | back 49 a business owner generates enough income from their business to meet their needs |
front 50 Personal satisfaction | back 50 a business owner generates enough income from their business to meet their needs |
front 51 Revenue | back 51 the amount of money coming into a business from selling products over a period of time ( Price x quantity) |
front 52 Fixed costs | back 52 Costs that do not change in the short-term with the level of output. e.g. salaries, advertising, rent |
front 53 Variable costs | back 53 costs that change as level of output changes e.g. raw materials, electricity, temporary worker wages. |
front 54 Total costs | back 54 when fixed costs and variable costs are added together. |
front 55 Break-even | back 55 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. |
front 56 Break even level of output | back 56 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. |
front 57 Loss | back 57 when outgoings (costs) are higher than revenue (income). |
front 58 Margin of safety | back 58 The difference in the level of output (or sales) and the break even point. |
front 59 One-off costs | back 59 costs that a business has to pay for only once, e.g. buying machinery. |
front 60 Level of output | back 60 the number of goods or services being produced by an organisation. |
front 61 Contribution per unit | back 61 how much each product made and sold contributes to fixed cost, then profit. Contribution = selling price per unit - variable costs per unit. |
front 62 Interest | back 62 a charge (%) on loaned (borrowed) money or the return paid on savings. |
front 63 Cash | back 63 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 |
front 64 Net cash flow | back 64 the flow of cash into and out of a business over a period of time. |
front 65 Cash inflow | back 65 any flow of cash into a business, e.g. from sales/sale of assets/raising capital. |
front 66 Cash outflow | back 66 any flow of cash out a business , e.g. to pay salaries, rent, suppliers, interest on loans |
front 67 Cash flow forecast | back 67 a table used to calculate the cash position of a business over time by predicting future cash inflows and cash outflows of a business, |
front 68 Closing balance | back 68 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. |
front 69 Opening balance | back 69 the amount of money a business has in its account at the beginning of an accounting period, e.g. a month, a financial year. |
front 70 Insolvency | back 70 when a business does not have enough cash to pay its bills when they are due. |
front 71 Short-term sources | back 71 A source of finance which has to be repaid in under a year. (e.g. trade credit and overdraft) |
front 72 Trade credit | back 72 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 |
front 73 Overdraft | back 73 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) |
front 74 Long-term finance sources | back 74 A source of finance to be repaid in more than one year. |
front 75 Loan/loan capital | back 75 Borrowing from a bank to be paid back over an agreed period and with an agreed rate of interest. |
front 76 Venture capital | back 76 Investment from an individual or business for a share of a company or agreed return on their investment. |
front 77 Personal savings | back 77 Money saved by the owner or borrowed from friends or family that can be invested in the business |
front 78 Retained profits | back 78 profit reinvested back into the business instead of being returned to shareholders. |
front 79 Sale of assets | back 79 business sells something physical of value to raise capital, e.g. machinery, vehicles, equipment. |
front 80 Share capital | back 80 Investment into a private limited company by its owners (shareholders) buying a share of the business |
front 81 Crowdfunding | back 81 Small investments into a business project or start-up from a large number of investors through an online crowdfunding platform. |
front 82 liability | back 82 the legal responsibility that a business owner has to pay the debts of the business. |
front 83 Limited liability | back 83 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. |
front 84 Unlimited liability | back 84 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 |
front 85 Business ownership | back 85 the different legal structures of a business. I.e. Private Limited Company (Ltd) / Public limited Company (PLC) / sole trader / partnership |
front 86 Sole trader | back 86 a type of unincorporated business that is owned by one person and who has unlimited liability. |
front 87 Partnership | back 87 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) |
front 88 Private Limited Company (Ltd) | back 88 an incorporated business that is owned by shareholders who have limited liability. Shares are not traded on a public stock exchange. |
front 89 Shareholders | back 89 people who have bought shares in a business to receive a share in future profits. |
front 90 Companies house | back 90 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. |
front 91 Franchise | back 91 when one business gives another business permission to trade using its name and products in return for a fee and share of its profits. |
front 92 Franchisee | back 92 an entrepreneur who pays a fee to trade using the brand name and products of an established business |
front 93 Franchisor | back 93 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) |
front 94 Business location | back 94 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) |
front 95 Raw materials | back 95 substances used as an input to a production process for manufacturing into finished goods. |
front 96 Production costs | back 96 the costs associated with producing goods and services. |
front 97 The marketing mix | back 97 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. |
front 98 Digital communication | back 98 any form of communication from a business that is carried out using email, social media or text message and websites. |
front 99 E-commerce | back 99 using the internet to carry out business transactions, i.e.. the activity of buying and selling goods and services online. |
front 100 Public relations | back 100 promotion of a positive image about a product or business through giving positive information to the general public, other businesses or to the press. |
front 101 Retailer | back 101 a business which specialises in selling goods in small quantities to the consumer. |
front 102 Wholesaler | back 102 a business that buys in bulk from a manufacturer or other supplier and then sells the stock on in smaller quantities to retailers. |
front 103 Business plan | back 103 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 |
front 104 SMART objectives | back 104 goals for a business that are Specific, Measurable, Achievable, Realistic and Time-bound. |
front 105 Cash-flow forecast | back 105 the predicted amount of money coming in and going out of the business over a period of time. |
front 106 Bank loan | back 106 a fixed sum of money lent by a bank to an individual or a business for a specific purpose |
front 107 Stakeholder | back 107 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) |
front 108 Stakeholder conflict | back 108 when different stakeholders seriously disagree on business decisions that affect them. (e.g. owners want to increase profit and workers want higher wages) |
front 109 Suppliers | back 109 businesses that sell (or supply) products to other businesses |
front 110 Government | back 110 the people and organisations given the authority to pass laws and govern a country. |
front 111 Local community | back 111 a group of people who live /work in a geographical area in which a business operates. |
front 112 Managers | back 112 individuals who are in charge of a certain group of tasks or group of people. |
front 113 Owners | back 113 the people that a business belongs to. |
front 114 Pressure groups | back 114 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. |
front 115 Employees | back 115 a person who is hired for a wage, salary, fee or payment to perform work for an employer or business. |
front 116 End user | back 116 the consumer or person who ultimately uses a product. |
front 117 Dividend | back 117 a sum of money paid regularly by a company to its shareholders out of its profits. |
front 118 Technology and business | back 118 · 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. |
front 119 Social media | back 119 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, |
front 120 Digital communications | back 120 communication between people using SMS (text messaging), email and online social media platforms. |
front 121 Viral marketing | back 121 when a business uses social media to encourage the public to share information about its goods and services |
front 122 E-payment systems | back 122 electronic ability to transfer payments quickly & safely from one bank account to another. (to pay for products and services by businesses and its customers.) |
front 123 Biometrics | back 123 security devices used to verify a person's identity through their unique biological traits e.g. optical, fingerprint, and voice recognition. |
front 124 Sales | back 124 the amount of products or services that are being sold. |
front 125 Costs | back 125 the expenses and bills a business has to pay. |
front 126 Legislation | back 126 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. |
front 127 Consumer rights act | back 127 an Act that protects the public's buying rights when purchasing goods and services |
front 128 Consumer | back 128 the person who ultimately uses (or consumes) a product. |
front 129 Discrimination | back 129 people are unlawfully treated differently based on a particular characteristic, such as their: ethnicity, age, race, religion, gender, disability. |
front 130 Minimum wage | back 130 the lowest legal rate of pay for employees, depending on their age and their type of employment |
front 131 Health and safety | back 131 concerned with protecting the safety, health, and welfare of people in a business. |
front 132 The economy and business | back 132 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. |
front 133 Unemployment | back 133 the number of people of working age who are able to work but are not currently in work |
front 134 The economy | back 134 all activity related to production, consumption, and trade of goods / services in an area |
front 135 Consumer income | back 135 the amount of money that a consumer earns from either work or investment |
front 136 Consumer spending | back 136 the amount of money consumers have to spend. |
front 137 Inflation | back 137 a measure of the increase in prices over a period of time. |
front 138 Interest rate | back 138 the amount charged for borrowing money or as a reward for savings. |
front 139 Tax | back 139 a percentage of profits, income or revenue collected by a government to fund public services such as schools, hospitals, police etc. |
front 140 Economic climate | back 140 the general state of the regional, national, or global economy. |
front 141 Exchange rate | back 141 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) |
front 142 External influence | back 142 a factor that is outside the control of a business |
front 143 Gross domestic product (GDP) | back 143 an estimate of the total value of goods and services produced in a country. |
front 144 Advertising Standards Authority (ASA) | back 144 a body that ensures all advertising claims are accurate and true so consumers are not misled. |
front 145 Trading Standards Authority (TSA) | back 145 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 |