Key terms - Planning and Financing a business
- Created by: Zoe
- Created on: 29-12-12 19:06
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- Key terms - Planning and Financing a business
- Entrepreneur
- Someone who makes a business idea happen, either through their own efforts, or by organising others to do the work.
- Opportunity cost
- Cost of missing out on the next best alternative; e.g leaving a full time job to start own business would mean no annual salary
- Franchise
- When a franchisee pays a franchisor to trade under its brand name, this may include a percentage profit or startup fees.
- Copyright
- makes it unlawful for people to copy an authors original written work
- Patent
- provides an inventor of a technical breakthrough with the ability to stop anyone copying the idea for up to 20 years
- Trademark
- Protects any image, logo or sign that can distinguish the goods and services of one trader from those of another
- Business plan
- a document setting out the business idea, showing how it is to be financed, marketed, and put into practice
- Sectors
- Primary
- Companies and people working to extract raw materials from the earth or sea e.g fishing/farming
- Secondary
- Businesses the transform raw materials into finished goods e.g car manufacturing/food processing
- Tertiary
- Companties that provide services to the public e.g retailing or other businesses e.g banking
- Primary
- Limited liability
- Owners are not liable for the debts of the business; they lose no more than the sum they invested
- Sole Trader
- A one-person business with unlimited liability
- Research
- Primary
- Finding out information first hand - more specific. E.g making and handing out a questionnaire
- Secondary
- finding out information that has already been collected e.g government estimates or mintel
- Qualitative
- Open questions involving opinions or feelings about a product- hard to pick out themes and manipulate
- Quantitative
- research that can be manipulated easily - usually involves numbers or yes/no questions
- Primary
- Venture capital
- high risk capital invested in a combination of loans and shares, usually in a small, dynamic business.
- Break even
- Compares firms revenue with its variable and fixed costs to identify the minimum level of sales to cover costs
- Margin of safety
- The amount by which current output exceeds the level of output necessary to break even
- Entrepreneur
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