Business definitions

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Asset
Any item of value that a business owns, such as machinery or land.
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Bank overdraft
A facility offered by a bank that allows an account holder to borrow money at short notice.
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Biased
Unbalanced or inclined to agree with a particular judgement or idea rather than presenting the evidence fairly.
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Brand loyalty
A customer's willingness to buy a product from a particular business rather than from its competitors.
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Business plan
A document that outlines how an entrepreneur is going to set up and operate a new business.
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Competitive advantage
An advantage a business has over its rivals that is unique and sustainable.
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Consumer
Someone who buys and uses goods and services.
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Convenience
A product or service's ability to fit in well with a customer's lifestyle or routine, the ease with which it can be used and/or its easy-to-reach location.
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Customer base
The clients who buy the products/services of a business, a proportion of whom are repeat customers.
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Demographics
Relating to the structure of a population.
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Differentiate
Shows that a product is different from similar products.
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E-commerce
Using the internet to carry out business transactions.
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Enterprise
A person/organisation with the purpose of producing goods/services to meet the needs of customers.
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Entrepreneur
Someone who creates a business, taking on financial risks with the aim of making a profit from the business.
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E-tailing
Retailing to customers through the internet.
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Exports
The flow of goods and services out of a country and into another.
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Imports
The flow of goods and services into a country from another.
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Innovation
Changing an exisiting product or process.
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Interest
The cost of borrowing, or a percentage of the amount of money borrowed that must be repaid in addition to the original amount borrowed.
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Invention
Creating something completely new.
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Investment
Putting money into a business with the intention of making a profit.
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Legislation
The laws that a business must comply with.
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Logistics
The organisation and management of the transport of raw materials and goods.
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Marketing mix
The 4 ps of marketing, which are product, price, promotion and place.
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Market research
The process of collecting infomation about the market and customers' needs and wants in order to inform business decisions, including product design and marketing.
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Market share
The protortion of sales in a market that are taken by one business.
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Motivated
When an employee has reasons for working well and increasing their productivity.
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Multinational
A business with operations in more than one country.
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Obsolete
Out of date or no longer used.
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Partnership
A business that is owned by a group of 2 or more people, who share the financial risk, decision-making and the profits.
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Pressure group
A group of people who join together to try to influence government policy or business policy for a particular cause.
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Price point
The point on a scale of possible prices at which a business fixes the price of its products.
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Private limited company
An incorporated business that is owned by shareholders who invest in the business in return for a share of the profits and voting rights at the AGM.
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Profit
The amount of revenue left over once costs have been deducted.
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Profit margin
The proportion of revenue left over once costs have been deducted.
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Public limited company
An incorporated business that can sell shares to the public.
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Qualitative
Concerning the quality of something that cannot be measured in numbers.
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Quantitative
Concerning the quantity or amount of something that can be measured in numbers.
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Reasonable care
Taking enough care to ensure that a produc/service is suitable for customers.
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Redundancy procedures
The process through which a business stops employing some of its staff because their roles are no longer needed.
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Reliable
(Of data) representative of a wider group or the population as a whole.
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Repeat purchase
Products/services that are repeatedly purchased by the same group of customers (these can be seen as a measure of customer loyalty)
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Retailing
Selling products/services to customers in a physical shop.
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Retained profit
Money that a business keeps rather than paying out to its shareholders, it can then be reinvested.
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Revenue
The money that comes into a business from sales.
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Reward
The money that an entrepreneur or investor recieves when a business succeeds.
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Risk
The possibility that an enterprise will have lower than anticipated profits or experience a loss.
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Roles
The different jobs within a business.
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Share-capital
Money that is raised by a business issuing shares that it then sells to those who wish to invest in the business.
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Shareholders
Investors who are part-owners of a company.
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Social media
Websites that allow users to interact with other users, by sharing text-based messages, pictures or links to online content.
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Sole trader
A type of unincorportated business that is owned by just one person.
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Span of control
The number of employees that are managed by a manager.
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Start-up
A new business, usually with only a small number of employees.
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Stock
The products held by a business in a shop or warehouse, usually for sale to customers.
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Stock exchange
A place where shares in PLCs can be bought and sold.
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Trade credit
A credi arrangement that is offered to a business by suppliers.
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Unique selling point
Something that makes a product/service stand out from its competitors.
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Venture capital
Money that a business sources from individuals, or groups of people, who wish to invest their own money into a new business.
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Break-even
The output at which total costs and revenue are the same.
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Fixed costs
Costs that do not vary with the amount purchased.
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Variable costs
Costs that do vary with the amount produced.
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Total costs
Fixed costs and variable costs added together.
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Inflows
Money in.
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Outflows
Money out.
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Liquidadtion
When a business has to sell all of its assets to turn into cash, to then pay off any debts.
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Cash flow
The movement of cash in and out of the business.
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Franchise
A franchisor allows you to use their brand and business format, and you the franchisee then pay the franchisor an upfront fee and then a share of the profits you make.
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Unlimited liability
When 1 person is responsible for the debts of the business. This means their personal possessions are at risk.
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Creditor
Someone the business owes money to, such as a bank.
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APR
Annual percentage rate
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Internal finance
Comes from inside the business, such as selling unwanted assets.
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External finance
Comes from outside the business, such as a bank loan.
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Bank loan
Where money is borrowed from a bank and repaid under agreed terms and conditions.
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Leasing
The ability to have an asset such as machinery without actually buying it.
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Mortgage
A long term loan, often used to buy a house or car.
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Owners funds
Money invested by the entrepreneur.
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Grant
A sum of money that does not have to be repaid must must be used for the purpose it was intended for e.g. a new school playground.
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Hire Purchase
An agreement that allows use of an asset but ownership does not occur until the final payment is made.
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Adding value
The difference between the price of the finished product/service and the cost of the inputs involved in making it.
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Bankruptcy
Means you can: lose control of your bank accounts, you can't borrow money, you can't be a company director, you can't set up another business, and you can't be a JP/MP/accountant or lawyer.
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Primary research
Get the information yourself.
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Secondary research
Using data that already exists.
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Market segment
A sub group of a market, made up of customers who have similar wants and needs.
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Competition
Where a business operates in a market where there are other businesses producing the same or similar products/services.
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Stakeholder
Any individual or organisation that is affected by the activities of a business.
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Statutory legal rights
Rights derived from laws passed by parliament, and apply to everyone.
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Contractual legal rights
Rights agreed between an employer and the employee and are stated in a contract of employment.
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Expressed terms
Terms which are expressed in the contract of employment.
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Implied terms
Terms which are not written down but are taken to be agreed.
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VAT
Value added tax.
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Income tax
Tax on wages.
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Corporation Tax
Tax on profits.
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Benefits
payments made by the government to those who are unable to work.
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Critical consumer
Someone who thinks carefully about a decision to buy something.
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Debt
Money that is owed, and that is expected to be payed back, by an individual, business or country.
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Demand
The quantity of goods or services that people want.
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Inflation
When prices for goods and services are rising.
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Structural unemployment
The reduction in demand for certain types of industries.
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Classical unemployment
benefits are to high and generous so people chose not to work.
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Cyclical unemployment
Jobs are lost due to a recession.
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Frictional unemployment
People that are between jobs.
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Seasonal unemployment
People may be out of work because of seasons.
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Other cards in this set

Card 2

Front

A facility offered by a bank that allows an account holder to borrow money at short notice.

Back

Bank overdraft

Card 3

Front

Unbalanced or inclined to agree with a particular judgement or idea rather than presenting the evidence fairly.

Back

Preview of the back of card 3

Card 4

Front

A customer's willingness to buy a product from a particular business rather than from its competitors.

Back

Preview of the back of card 4

Card 5

Front

A document that outlines how an entrepreneur is going to set up and operate a new business.

Back

Preview of the back of card 5
View more cards

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