Business studies unit 1

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Adding value
A process through which a business increases the worth of the resources included in production so that customers perceive the product to be worth more than the cost of the inputs
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Adviser
An external contact of a business that provides support and advise, sometimes for a fee
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Bank loan
A fixed amount loan from a bank which is generally used to finance long-term assets
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Bank overdraft
Borrowings from a bank on a current account which are payable on demand
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Break even output (point)
The point at which the total sales of a business is equal to total costs, the business is making neither profit nor loss
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Budget
A detailed plan of income and expenses expected over a certain period of time
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Business angel
A particular type of investor, usually a successful entrepreneur, who is willing to invest in high risk, high growth firms at a very early stage
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Business objective
A stated goal or target of a business
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Cash flow
The movement of cash into and out of a business
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Cash flow forecast
A projection, usually by week or month, of the likely cash inflows and outflows in a business
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Contribution
The difference between total sales and total variable costs
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Contribution per unit
The difference between selling price per unit and variable cost per unit
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Costs
Amounts incurred by a business as a result of its trading operations
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Demand
The amount of a product or service that customers are willing and able to pay at a given time
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Demographic
Defining a market in terms of social-economic factors such as segmentation age, income, class act
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Elasticity of demand
The responsiveness of demand to a change in price or incomes
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Electronic market
A market in which buyers and sellers are brought together using digital means of communication in order to exchange information and conduct transactions
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Enterprise
The process by which new businesses are formed in order to offer products and services in a market
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Entrepreneur
An individual who sets up and runs a new business and takes on the risks associated with the business
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Expenditure budget
The budget which sets out the expected costs to be incurred by the firm, usually split into various categories (production, marketing, administration)
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Fixed costs
Costs that do not vary with the level of output
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Franchisee
The person or company which operates a franchised business format under licence from a franchiser
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Franchisor
The owner of a business format (franchise) which is licensed out to other people or businesses
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Full-time employee
An employee who works more than 30 hours a week in a business
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Income budget
The budget sets out estimates of the likely demand for and value of the firms sales
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Inputs
The resources (land, labour, capital, enterprise) that go into producing goods and services
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Limited liability
Shareholders are only liable for the money they have invested and not for overall debts and liabilities of their company
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Location
The place from which a firm does business. Can be both a physical location and also virtual
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Margin of safety
The difference between the actual level of output and the break even output
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Market
Any place where buyers and sellers come together with a view to exchange transactions
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Market growth
The percentage growth in the side of the market, measured over a specific period
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Market research
The process of planning, collecting and analysing data relevant to help make marketing decisions
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Market segmentation
The process of dividing the market into smaller sections (segments) which contain customers with similar needs and wants
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Market share
The share of the total market that is owned by a particular business, product or brand and is expressed as a percentage
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Market size
The total value or quantity of demand in a specific market over a specific period of time. Can be measured in value terms (sales) or in terms of quantities ( units) bought or sold
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Niche market
A smaller part of a larger market in which customers have more specific needs and wants
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Opportunity cost
The cost of a decision as measured by the benefits foregone of the next best alternative
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Patent
The right to be the only user or producer of a specified product or process
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Permanent employee
An employee who is employed on a formal employment contract and remains with the firm for an open-ended period until the contract is ended
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Primary research
The market research that involved collection of data that does not yet exist
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Profit
The difference between total sales and total costs
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Qualitative research
Market research concerned with collecting data on attitudes, opinions, beliefs, intentions etc
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Quantitative research
Market research concerned with collecting data that can be quantified such as statistics and numerical data
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Return
The rewards to enterprise- profit, satisfaction
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Revenue
The income or sales that a business achieve sin a period. Calculated by multiplying selling price per unit with quantity sold
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Risk
The probability or chance that hoped-for outcomes will not occur
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Sample
In market research, a sample is a subset of a population. Sampling is the process of taking analysing a research sample
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Share capital
The finance invested in a business by shareholders- part of the equity capital of a firm
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Social enterprise
A business that has objectives other than making profit. Part of a group of organisations in the "not-for-profit" sector
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Sole trader
A one-person business with unlimited liability for the debts of that business
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Supplier
A business that provides goods and services to other firms
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Total costs
The total of variable and fixed costs in a business
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Trade credit
Amounts owed to suppliers of a business- a source of finance
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Trademark
A word, symbol or phrase used to identify a particular company's product and differentiate it from other companies' products
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Unlimited liability
Unlimited liability describes the potential risk that sole traders and partnerships face. They are liable for the debts of the business
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USP
Unique selling point- a feature of a product or service that makes it stand out compared with the competition
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Variable costs
Costs that vary directly in proportion to output (materials, wages)
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Venture capital
Investment made by specialist funds to finance the launch, early development or expansion of a private company
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Working capital
The amount of money that a business has available to conduct its day-to-day activities
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Other cards in this set

Card 2

Front

An external contact of a business that provides support and advise, sometimes for a fee

Back

Adviser

Card 3

Front

A fixed amount loan from a bank which is generally used to finance long-term assets

Back

Preview of the back of card 3

Card 4

Front

Borrowings from a bank on a current account which are payable on demand

Back

Preview of the back of card 4

Card 5

Front

The point at which the total sales of a business is equal to total costs, the business is making neither profit nor loss

Back

Preview of the back of card 5
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