AQA AS Business Unit 1 Definitions

The definitions for the exam on 11th January 2012

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  • Created on: 03-01-12 19:22

Unit 1

Adviser - this is an external contact who provides a business with support and advice, sometimes for free.

Bank loan - a fixed amount loan from a bank which is usually used to fund long term assets.

Bank overdraft - borrowings from a bank on a current account which are payable on demand. 

Break even - the point at which the total sales of a business equal total cost, where the business is not making a profit or a loss.

Budget - a detailed plan of expected income and expenses over a period of time.

Business plan - a detailed description of a business, including is strategy, aims and objectives, marketing and financial plans.

Cash flow - the movement of cash in and out of a business.

Cash flow forecast - a prediction of cash inflow and outflow of a business over a certain period of time.

Contribution - the difference between total sales and total variable costs.

Costs - the amounts incurred by a business as a result of its trading operations.

Demand - the amount of a product customers are willing and able to buy at a given price level.

Demographic segmentation - defining a market by factors such as age, income, class etc

Elasticity of demand - how responsive demand is to change in price or income.

Enterprise - the process by which new businesses are formed in order to offer products and services to a market. 

Entrepreneur - an individual who sets up and runs a new business and takes the risk associated with creating a business

Fixed cost - cost which do not change with output

Franchisee -  a company that operates as a franchised business format under a licence from a franchisor.

Franchisor - the owner of a business which licenses out to other businesses.

Inputs - the resources that go into producing goods and services (land, labour, capital and enterprise).

Limited liability -  shareholders are only liable for the money they have incested, not for overall debts of the company.

Margin of safety - this is the actual output minus break even output.

Market growth - the growth of in the size of a market. 

Market research - the process of planning, collecting, and analysing data relevant to help make marketing decisions.

Market segmentation - the process of dividing a market into smaller segments which containt customers with similar needs and wants.

Market share - the shre of a total market that is owned by a particular business, product or brand. 

Opportunity cost - the cost of a decision by the benefits foregone for the next best alternative.

Patent - the right to be the only producer of a specified product or process.

Primary research - new market research done for a new purpsoe.

Profit - total sales minus total cost.

Qualitative research - market research concerned with collecting data in the form of opinions, beliefs etc.

Quantitative research - market research taken in the form of number, statistics etc.

Return - the reward to the enterprise.

Risk - the chance that the hoped for outcome will not occur.

Sample - a subset of a population.

Sole trader - a one person business with unlimited libaility.

Total cost - total variable cost and fixed cost together.

Trade credit - amounts owed to suppliers of a business.

Trademark - a word, symbol, phrase or something to identify a praticular companys products.

Unlimited liability - where the business owner is liable for the debts of the business.

USP - the unique selling point, which makes the product stand out.

Variable costs - costs that vary depending on your output.

Venture capital - investment made by specialist funds to finance a business for a part of the business.

working capital - amount of money that a business has available to operate on a daily basis.

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