Business Key Terms

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An individual who has the skills and knowledge to set up their own business and is willing to take risks.
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Primary Research
First hand information gathered about a market (research done by you).
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Secondary Research
Information that has been collected by other organisations
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Qualitative Data
Information about opinions, judgements and attitudes.
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Quantitative Data
Data that can be expressed as numbers and can be statistically analysed.
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Market Segment
A part of a market that contains a group of buyers with similar buying habits.
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Market Mapping
A market map illustrates the range of positions that a product can take in a market based on two dimensions that are important to customers. E.g. High price vs low price and basic quality vs high quality.
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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 it is able to charge for its product/service. E.g. Adding additional ingredients to chocolate adds value.
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A marketing arrangement allowing another business to trade in the same style as an existing business.
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The person or business who offers to franchise to other businesses its trading methods, products and business logos.
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A person or business buying the franchise.
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A payment made to the franchisor based on the sales turnover of the franchise.
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Deliberate Creativity
It is used by businesses to solve problems, fill gaps in the market and develop products. Ideas are merged together to create business solutions. E.g. GHDs turn off automatically.
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Lateral Thinking
Thinking outside of the box and coming up with new and unexpected ideas.
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This involves generating new and creative ideas or ways of doing things.
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This involves acting on creative/new ideas (inventions) to improve business performance. This is when you develop a product. E.g. Growth/ improve efficiency/ productivity
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Protects a name. This stops others from using the company's name.
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Protects content. This is used to stop people from copying and sharing content. E.g. Books, films, music, literature
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Protects ideas. It is used to stop people from recreating ideas for their own gain.
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Anyone with an interest in a business or organisation.
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Sales Volume
The number of items or products or services sold by a business over a period of time.
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Fixed Costs
Costs which do not change with the output produced or the services provided. E.g. Rent, insurance
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Variable Costs
Costs which change directly with the level of production or service provided. E.g. Fuel costs, raw materials.
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Cash-flow Crisis
When a business lacks the cash to pay its costs and therefore stops trading.
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Short-term Finance
This is needed to cover day-to-day running costs of the business. It will be paid back in a short period of time (max 1 year) so it is less risky for the lender.
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Long-term Finance
A large amount of money that is borrowed and paid back over a longer period of time. It is more risky so lenders ask for some form of insurance or security.
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An agreement with the bank allowing you to withdraw money from your bank even after you have no money left. You can usually withdraw upto £3000. Interest is added. E.g. Day-to-day bills
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Trade Credit
A supplier giving the customer a period of time to pay a bill (or invoice) for goods or services after delivery. E.g. Large items
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Credit Cards
You can buy a product or service with a credit card and pay the bank back at a later date. (When the bill arrives)
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Cash-flow forecast
A prediction of the money coming in and going out of a business over a period of time.
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A partnership is between 2 and 20 people who jointly own a business.
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Unlimited liability
Where the owners are responsible for paying all of the debt incurred by a business. They may lose their personal possessions in order to raise enough money to pay off debt, if the business should become bankrupt.
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Private limited company (LTD)
Companies that have at least two shareholders and can only issue shares to friends and family.
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People pay into your business and in return they get a percentage of the profits.
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Public limited company (PLC)
Companies which can issue shares to anyone.
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The amount of income a business earns over a period of time.
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Predicting sales revenue
Total revenue (TR) = price (p) x quantity (Q)
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Something you have to pay. Total costs (TC) = fixed costs (FC) + variable costs (VC)
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Sole traders
A small business owned by one person.
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Calculating profit/loss
Profit/loss = total revenue (TR) - total costs (TC)
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Bank loan
allows businesses to borrow a fixed sum of money. Disadvantages of this includes interest increasing over the time you take paying it back and the bank may reject lending you money.
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Retained profit
Profits from the business kept aside for further investment. You can use this to expand your business.
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Personal savings
Money which you have saved yourself. You can use this for the monthly rent.
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Business angel
People and businesses that invest money into a business and are paid back with a fixed and agreed rate of interest. They are useful when the bank will not lend you money.
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Money which is provided by a charity or the government as a gift.
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Share capital
Issuing shares to investors in order to start or expand the business.
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Venture capital
Money given by investors to small businesses to start up or who wish to expand. It is high risk.
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Business plan
A plan for the development of a business giving forecasts of items such as sales, costs and cash-flow.
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Income tax
A government tax on the money you earn.
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Corporation tax
A tax which the government charges to companies on their profits, once they reach a certain level.
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VAT (value added tax)
A government tax added onto the price of goods and services. It is usually expressed as a percentage.
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National insurance
Money which the employee keeps back from the employers PAYE to be given to the goverment.
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Interest rate
A percentage of money added onto money that is borrowed or saved. Interest rates are set by the Bank of England.
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Exchange rate
The price of buying a foreign currency. It tells you how many of a currency you can get for £1.
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A term used to refer to all the people and businesses in a country that engage in buying and selling.
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A rise in prices of goods and services. It is a percentage over time.
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Other cards in this set

Card 2


First hand information gathered about a market (research done by you).


Primary Research

Card 3


Information that has been collected by other organisations


Preview of the back of card 3

Card 4


Information about opinions, judgements and attitudes.


Preview of the back of card 4

Card 5


Data that can be expressed as numbers and can be statistically analysed.


Preview of the back of card 5
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This helped me so much! Thank you


A neat and concise set of flash cards showing the main business terms. Can be used for joint revision or as last minute refresher.

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