Business Studies Unit 1

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A business that sells (supplies) products to another business.
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Using raw materials, labour and machinery to make products.
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A person or organisation that buys the product or service.
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The person that uses (consumes) the product.
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A business
An organisation whose purpose is to produce goods and services to meet the needs of customers.
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Market Segment
A group of buyers with similar characteristics and buying habits.
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Ways to Compete
Wider range of products, better after-sales service, stronger brand image, better product features, higher quality, better design.
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A names product that customers see as being different from other products, and that they can associate or identify with.
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Added Value
The increased worth that a business creates for a product; it is the difference between what a business pays its suppliers and the price that is able to charge for the product.
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Ways to add value
Unique selling point, better design, improved quality, branding, greater speed of service, more convenience.
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Unique Selling Point (USP)
Another way to add value to a product, such as the lowest cost, the highest quality or the first-ever product of its kind.
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The business that gives franchisees the right to sell its product or service.
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A business that agrees to manufacture, distribute or provide a branch of product, under licence of franchisor.
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What does franchisee get when they buy a franchise?
Access to goods and services, advertising and promotion, operate in an exclusive area, ongoing support, equipment, training, an established brand name.
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Drawbacks of a franchise
Start-up costs can be expensive, royalty payment, complicated application process, lack of control, limited flexibility to make your own decisions.
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A person who own and runs their own business and takes risks.
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The initial spark and idea for a business and the willingness by an individual to show initiative, take a risk and undertake a new venture.
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Another word used for businesses.
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Blue Skies Thinking
Coming up with as many ideas as possible to solve a problem.
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Lateral Thinking
Thinking differently to try to find new and unexpected ideas (thinking outside the box).
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Deliberate Creativity
The intentional creation of new ideas through recognised and accepted techniques eg. lsits, ming mapping, brainstorming.
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Right of ownership of an invention, design or process when t is registered with the government.
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The logo, symbol, sign, or other features of a product or business that cannot be copied by others.
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Calculated Risk
A chance of failure, the probability of which is estimated before some action is undertaken.
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Specifications, design, packaging, function.
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Advertising, PR brochures, direct mail, sales promotions.
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Direct/ Online retail, wholesaler.
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Premium (high), discounted (low), price match (same).
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Goals that a business is trying to achieve.
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Financial Objectives
Survival, profit and income, wealth, financial security.
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Non-financial Objectives
Person satisfaction, independence and control, helping others.
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The action of leading a group of people or an organization, or the ability to do this
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The act of coming to a decision or of fixing or settling a purpose.
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Revenue, Sales Revenue, Turnover
The amount of income received from selling goods or services over a period of time.
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Fixed Costs
The costs that do not vary with the output produced by a business eg. salaries.
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Variabe Costs
Change directly with the number of products made.
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Total Costs
All the costs of the business. FIXED COSTS + VARIABLE COSTS = TOTAL COSTS
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Occurs when revenues of a busines
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Occurs when revenues of a busines
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Occurs when revenues of a business are greater than its total costs. TOTAL REVENUE - TOTAL COSTS = PROFIT/LOSS
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Ways to increase profit
Lower variable costs, lower fixed costs, increase the sales price, increase the quantity of sales.
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Money coming into a business. Eg. money from the owners, bank loans or cash from sales.
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Money coming out of a business. Eg. wages, raw materials, interest on loans, advertising or bills.
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Opening Balance
The amount of money in a business at a start of a month.
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Closing Balance
The amount of money in a business at the end of a month. NET CASH FLOW + OPENING BALANCE
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Cumulative Cash Flow
The sum of cash that flows into a business over time.
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What Goes Into A Business Plan
Overview, objectives, market research, personnel, finances, production.
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Long-term sources of finance
Share capital, personal savings, venture capital, grants, loans, mortgage, leasing.
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Short-term sources of finance
Bank overdraft, delayed payment, credit cards, factoring, trade credit.
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Unlimited Liability
The owner is legally responsible for any debts of the business. Eg. sole trader.
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Limited Liability
The owners and the business are separate legal entities. Any debts incurred by the business belong to the business and the owners can lose only up to the amount that they have invested.
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Taxes on Small Businesses
Value Added Tax (VAT), Income Tax, National Insurance (NIC), Corporation Tax.
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The amount that sellers and willing and able to sell at any given price.
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The amount that buyers are willing and able to purchase at any given price.
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Where byers and sellers meet to exchange products or services.
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Commodity Market
Markets for raw materials, such as oil, steel and wheat, used in the production of other products.
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Goods Market
Markets for everyday products, such as clothes and food.
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Goods and services coming into a country.
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Goods and services going out of a country.
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Business Cycle
A cycle or series of cycles of economic expansion and contraction.
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Stages of a Business Cycle
Boom, Slowdown/Downturn, Recession, Recovery/Upturn.
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An individual or a group that has an interest in and is affected by the activities of a business.
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Who Can Be a Stakeholder
Managers, workers, customers, competitors, the local community, government, suppliers, owners (shareholders).
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Card 2


Using raw materials, labour and machinery to make products.



Card 3


A person or organisation that buys the product or service.


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Card 4


The person that uses (consumes) the product.


Preview of the back of card 4

Card 5


An organisation whose purpose is to produce goods and services to meet the needs of customers.


Preview of the back of card 5
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