Business Key Words Part 1

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Entrepreneur
An indivdual with an idea for a business.
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Enterprise
The ability to handle uncertainty and to regonise change.
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Why Are Businesses Set Up?
Finacial reasons, Personal reasons and to help others
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Social Enterprise
An activity that achieves a reward for society.
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Gap in the Market
A business opportunity that is either a completely new idea or adds something different to an existing product.
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Market Observation.
A method of data collection in which the situation of interest is watched and the relevant facts, actions and behaviors are recorded.
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Market Mapping
A market map is a diagram that identifies all the products in the market using two key features, the centre shows a gap in the market.
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Franchise
The right to sell another firm's products.
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Franchisee
The firm selling the Franchisors products.
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Franchisor
The product manufacturers.
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Advantages of franchsing to the Franchisee
Less risk of failing as the business is well established. Wider marketing. Training may be provided.
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Advantages of franchsing to the Franchisor
They can increase their market share.
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Disadvantages of franchsing to the Franchisee
Couldn't create their own products. Business freedom would be limited due to Francisor's rules.
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Disadvantages of franchising to the Franchisor
The business may gain a bad reputation if a franchisee has poor standards.
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Business Aim
Overall goals that the business wants to achieve. E.g Survival, Profit, Growth, Market Share, Eniviromental Sustainability, Ethical Considerations or Customer Satisfaction.
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Business Objectives
Help the business to achieve its aims.
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Growth
Expanding a business. This may be organically or inorganically.
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Sales
The amount of a product sold.
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Market Share
Dividing the sales of the firms products by the total sales of the market and multiplying by 100 to find out the proportion of total market sales sold by the business.
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Customer Satisfaction
Measures how happy the consumers are witht he products and services provided by the firm.
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Ethics
Acting in the way society believes is morally right.
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What is the importance of clear objectives?
They need to be specific so the business can measure whether it has been sucessful or not.
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How does a business measure success?
Companies compare their actual performance to the objectives they've set. They do this in different ways based on the nature of their objectives.
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Stakeholders
Anyone who's affected by the business. E.g owners, customers, suppliers, employees, the local community or governement.
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Shareholders
Part owners of a limited company.
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How do shareholders influence a business?
The shareholders tend to set short-term, profit based goals.
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Customers
A person who purchases a prodcut or service.
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How do customers influence a business?
If a business can't sell its products it won't survive.
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Suppliers
Someone who provides the business with stock.
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How do suppliers influence a business?
They only want the business to keep buying from them.
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Employees
Someone who works for a company.
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How do employees influence a business?
With out motivated workers the business becomes unproductive.
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Mangers
A person responsible for control a group of employees.
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How do the managers influence a business?
They are concerned about their salary and their employees.
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Lenders
Someone who provides the business with some kind of loan.
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How do lenders influence a business?
They want to be paid back as soon as possible.
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Local community
The area around a business.
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How does the local community influence a business?
The business may employ the local people. Business activity also affects the local environment. For example, noisy night-time deliveries or a smelly factory would be unpopular with local residents.
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Business Plan
An outline of what a new business will do and how it aims to do it.
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Sections of a business plan
Personal details, mission statement, objectives, product description, production details, staffing requirments, finance.
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Limited Liability
Having a seperate legal identity.
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Sole Trader
Someone that trades on their own.
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Advantages of a Sole Trader
Easy to set up. You get to be your own boss. Gain all the profit.
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Disadvantages of a Sole Trader
You have to work long hours. Unlimited liability.
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Partnership
Partners in a business who have an equal say in making decisions and an equal share of the profits - unless their deed of partnership says differently.
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Advantages of Partnership
More ideas. Less work. More capital put into the business.
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Disadvantages of Partnership
Both partner is legally responsible for what the other partner does. Unlimited liablility. More disagreements.
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Deed of Partnership
An agreement made in a partneship about sharing profits etc.
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Infastructure
The basic physical systems of a business.
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Factors that influence location
Locations of raw materials, labour supply, transport, economies of concentration, communication links.
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Market Research
The research that enables a firm to find out about its market, its customers and its potential customers.
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Other cards in this set

Card 2

Front

The ability to handle uncertainty and to regonise change.

Back

Enterprise

Card 3

Front

Finacial reasons, Personal reasons and to help others

Back

Preview of the back of card 3

Card 4

Front

An activity that achieves a reward for society.

Back

Preview of the back of card 4

Card 5

Front

A business opportunity that is either a completely new idea or adds something different to an existing product.

Back

Preview of the back of card 5
View more cards

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