Business Studies unit 1

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Entrepreneur
Individual with an idea for a business
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Business
organisation that provides a good/service that people are willing to pay for
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social enterprise
an activity that achieves a reward for society
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Gap in the market
Business opportunity that is completely new or adds something different to existing product/service
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Franchise
Legal right to use the name and logo of an existing firm and sell the same products
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Business aim
Broad target for the future e.g to increase sales growth/survive
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Business objective
Clearly defined target for a business to achieve over a certain period of time
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profit margin
profit made as a proportion of sales revenue
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market share
proportion of total market sales sold by one business
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ethics
moral qu on which decisions are made ad the impact the business has on its internal and external environment
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Stakeholders
people with an interest in a business: Gov. employees, managers, customers, community, suppliers and shareholders
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Business plan
a statement showing how a business sets out to achieve its aims and objectives
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Forecast
when the business attempts to estimate future sales and other finance variables
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Sole trader
Responsibility of business lies with one person. independent.
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Partnership
Two or more people in business together (max 20) and partners are jointly responsible for debts
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Unlimited Liability
Unincorporated business - owners are responsible for all of the business' debts
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Advan of sole trader
Simple quick and cheap to set up. Profit kept by owner and owner has complete control. hours can be tailored
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Disadvantages of sole trader
Unlimited liability. Reliant on health of owner. Owner may not have much expertise. Difficult to raise additional finance individually
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Advantages of partnership
Few procedures to set up, expertise of no. of people. More sources of finance
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Disadvantages of partnership
Unlimited liability, profits shared, other decisions must be honoured, more disagreements and partnership ends when one leaves
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Incorporation
forming a ltd liability company
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Limited liability
Shareholders/investors in a business can only lose their investment if the business fails, Cannot be forced to sell shares to pay off the firms debts
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Marketing mix
Four major variables for which decisions must be made when marketing a product: place, price, product, promotion
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Product differentiation
attempting to make your products stand out from your rivals through advertising, design or different product features.
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channel of distribution
Method used to transfer goods/services from the producer to the final customer
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cash flow forecast
prediction of business future cash inflows and outflows showing he closing balance
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net cash flow
difference between cash in and cash out of a business over a time period
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wage
when an employee is paid a fixed amount for each hour or day they work
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salary
when is worker is paid a fixed amount per month/year no matter the hours they work
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pension
payments made to retired workers - business offer their own pension schemes
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non non monetary rewards/ fringe benefits
Rewards to employees that do not involve the direct payment of money to them
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commission
when the employee gets a percentage of the amount they sell
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job production
making one off specialised products for each customer
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Batch production
Groups of identical items that pass through different stages of the production process at the same time
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Unit costs
average cost of making each unit
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Operational efficiency
Producing goods and services to an acceptable standard with as few resources as possible to keep unit costs low
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specialisation
work is divides int separate tasks/jobs that allow workers to become skilled at one of them.
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ICT
Use of electronic technology to gather store, process and communicate information
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Robot
computer controlled machine able to perform a physical task
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computer aided design CAD
Using computer bases tools to design products (buildings/cars etc)
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Computerised stock control programs
use of computers to keep records of all stocks and reorder stock automatically
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quality product
Meets customers needs/expectations therefore fits its purpose
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customer expectations
minimum quality standards for a products/service that is acceptable to consumers
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quality assurance
system of agreeing and meeting quality standards at each stage of production
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customer service
providing a service to customers before and after purchase to standards that meet their expectations
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Customer protection
laws that protect the interest of consumers when buying goods/services
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Other cards in this set

Card 2

Front

organisation that provides a good/service that people are willing to pay for

Back

Business

Card 3

Front

an activity that achieves a reward for society

Back

Preview of the back of card 3

Card 4

Front

Business opportunity that is completely new or adds something different to existing product/service

Back

Preview of the back of card 4

Card 5

Front

Legal right to use the name and logo of an existing firm and sell the same products

Back

Preview of the back of card 5
View more cards

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