Business definitions

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The process by which new businesses are formed in order to offer products and services in a market
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An individual who sets up and runs a new business and takes on the risks associated with the business
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The probability or chance that hoped for outcomes will not occur
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Opportunity cost
The cost of missing out on the next best alternative
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The right to be the only user of producer of a specified product or process
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A word,symbol or phrase used to identify a particular company's product and make it seem different from other companies products
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The exclusive and assignable legal right given to the originator for a fixed number of years to print,perform,publish ,film or record literacy ,artistic or musical material
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Added value
The difference between the price of a finished product and cost of inputs used in making it
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Niche market
A smaller,specialist part of a larger market where customers have particular needs and wants
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The business format which a franchisor allows a franchisee to use under licence
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The ultimate owner of the franchise format
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The business which is granted the right to operate a franchise on behalf of the franchisor
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Market research
Information that helps explain the size, structure and nature of a market
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Primary research
Information collected first hand for a specific research purpose (field research)
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Secondary research
Information that already exists (desk research)
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Qualitative research
Research based on opinions,attitudes, beliefs and intentions - asks questions
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Quantitative research
Based on proper sales and provides insights based on numerical values and data
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A market is any location where buyers and sellers come together to transact with each other
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How much customers are prepared and willing to buy at a given price
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Market share
Proportion/ percentage of a market owned by each competitor or product
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Market growth
The percentage growth in side of a market over a period of time
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Sole trader
a business owned by a single individual
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Where a business is wonder by two or more people
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Limited company
A separate corporation owned by shareholders
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Unlimited liability
The owner is liable for all the debts of the business
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Limited liability
The liability of the owners is limited to the amount in which they initially invested
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The physical place from which a business is operated and controlled
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Quantitative factors
Market research concerned with collecting data that can be quantified - sales statistics
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Qualitative factors
Market research concerning collecting data on attitudes ,opinions ,beliefs and intentions
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Full time employee
Contracted employee who works more than 30 hours per week
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Part time employee
Person contracted to work less than 30 hours per week
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Temporary employee
Employment is for a specific period and once complete the employment is terminated or renewed
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Permanent employee
Employed by the business for a non-specified open-ended period of time
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Individuals and businesses external to the business that provide specific services and advice
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Employees choose the hours they work outside a standard set of hours set by the employer
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Job sharing
Two workers share a full-time job
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Term time working
Normal permanent contract, but the employee can take unpaid time off in school holidays
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Zero hour contracts
Staff work only the hours in which they are needed - not set
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Incurred in the making and delivery of products and services
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Amounts earned by a business by selling products and services
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The difference between total revenues and total costs
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Variable costs
Costs which change as a result of changes in output
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Fixed costs
Costs which do not change in relation to changes in outputs
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Breakeven point
The output at which total revenues are equal to total costs
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The difference between revenues and variable costs
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Contribution per unit
Selling price per unit minus variable cost per unit
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Margin of safety
The difference between actual output and the break-even output
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Cash flow
The movements of cash into and out of a business
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Cash flow forecast
A projection ,usually weekly or monthly , of the likely cash inflows and outflows in a business
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A detailed plan of income and expenses expected over a certain period of time
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Income (sales) budget
Takes into account factors such as size of the market,existing competitors and their response and the capacity of the business
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Expenditure (costs) budget
What it will cost to deliver the planned product and support the business
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Profit budget
The difference between the sales budget and the expenditure budget
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Business plan
A detailed description of a new or existing business including the company's strategy,aims,objectives,marketing and financial plan
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Card 2


An individual who sets up and runs a new business and takes on the risks associated with the business



Card 3


The probability or chance that hoped for outcomes will not occur


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Card 4


The cost of missing out on the next best alternative


Preview of the back of card 4

Card 5


The right to be the only user of producer of a specified product or process


Preview of the back of card 5
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