Business Unit 1

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  • Created on: 17-05-15 16:44
CHARACTERISTIC
a personal quality which an entrepreneur possess
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ENTREPRENEUR
a person who has ideas and makes them happen
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PROFIT
the financial reward to the owner of the business
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REGULATIONS
rules that a business has to follow
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CAPITAL INVESTMENT
spending on equipment and premises
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WORKING CAPITAL
the money available to fund the day to day running of the business
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INITIATIVE
uacting without waiting to be told what to do or for somebody else to start the action for yo
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HARD-WORKING
you are willing to work long hours or do difficult tasks to make your idea happen
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RESILIENCE
the ability to withstand or recover from difficult situations
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CREATIVE
having original ideas
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SELF-CONDIFENT
believing in your own ideas/abilities
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CALCULATED RISKS
risky actionsfor which you have considered the probability of sucess or failure
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MOTIVES
factors that encourage an entrepreneur to go into business and to take particular decisions
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NON-PROFIT MOTIVES
reasons for setting up in business which are not linked to making profit
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ETHICAL MOTIVES
reasons linked to doing 'what is right'
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AUTOCRATIC LEADERS
take top-down decisions without consulting widely and encouraing everyone to particiapte very litle infomation on the reasons for the decision
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DEMOCRATIC LEADERS
guide rather that dictate, consulting widely and encouraging everone to participate in the decision-making process
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PATERNALISTIC LEADERS
behave rather as a parent might in making family decisions; the consult at every level and explain their reasons
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THEORY X MANAGERS
assume that their employees are lazy and prefer to be given firm direction with strict controls
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THEORY Y MANAGERS
assume that human beings want to work and will commit themselves to work effectively without strict controls
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MARKETS
exist wherever there are buyers and sellers who can communicate with each other and agree to buy or sell at a price that make the transaction worthwhile
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EXCHANGE
selling what we have or can produce and using the money to buy what we want for ourselves
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SPECIALISATION
concentrating on creating the products we can make and sell most efficiently
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COMPETITION
the process by which businesses strive against against one another to attract more customers by keeping prices down and making the product more appealing
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COST
all the payments that have to be made in order to get a product into the market place
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INVESTMENT
spending now in order to generate income in the future
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SCARCITY
a situation in which people want to buy more of a product than is currently being produced
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INCENTIVES
to financial and other rewards that can induce people to behave in a certian way
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DEMAND
the amount of a product that customers want to buy
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SUBSTITUTES
products that can be used to replace each other
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COMPLEMENTS
product that are used together
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INFERIOR GOODS
those which people buy more of when their incomes fall
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COST OF PRODUCTION
all tose payments that are needed in order to create a product and make it available in the market
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PRODUCT INNOVATION
refers to the development of completely new products
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PROCESS INNOVATION
uses new technologies to produce existing or similar produces at lower cost
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MARKET ORIENTATION
in decision making impies that the business will focus on the needs of the customer before taking decisions about the product, its price and the way it is promoted
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PRODUCT ORIENTATION
implies that the business will focus its efforts on creating the product rather than responding to market preferences
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EQUILIBRIUM PRICE
the price at which both buyers and sellers will be satisfied
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MARKET CLEARING PRICE
the price at which all of the products that is currently availiable sells, and no one who wanted to buy the product at the going prove fails to get it
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MARKET RESEARCH
the process of gathering data in order to understand current and future customer needs and factors affecting the marketplace
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PRIMARY MARKET RESEARCH
obtained 'first hand' by the business that is interested in the results
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SECONDARY MARKET RESEARCH
uses data that has been gathered previously by another organisation and is publicly available
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QUANTITATIVE MARKET RESEARCH
market research conducted where the results are numerical and can be analysed statistically
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QUALITATIVE MARKET RESEARCH
market research conducted where the results are based on opinions and feelings
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SAMPLING
involves collecting data from a group of people who will be representative of the target market or the population as a whole
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BIAS
occurs when infomation collected from a sample does not accurately reflect variations in the total population
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RANDOM SAMPLE
one in which everyone has an equal chance of being selected
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QUOTA SAMPLE
involves dividing the target market into groups according to their consumer characteristics
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STRATIFIED SAMPLE
similar to quota samples but select participants within the groups on a random bias, to gain greater accuracy
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MARKET SIZE
measured either by the total value or the total volume of goods sold in the market
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MARKET SHARE
shown by the percentage of the market that the individual business sells to
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MARKET GROWTH
an increase in the size of a market
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MASS MARKETING
applies to a business that is aiming its products at the largest part of the market
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NICHE MARKETING
deliberately targeting a small group of customers
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DIFFERENTIATED PRODUCTS
designed so that they have distinctive features that are different from those of a competing product
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MARKET POSTITIONING
refers to the way the product is percieved in comparison with competing products
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MARKET MAP
a tool that plots brands in the market accorfing to how they meet customers' needs
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GAP IN THE MARKET
indicates that there is a scope for a new product that is not currently being provided
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REPOSITIONING
targeting a different segment of the market
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COMPETITIVE ADVANTAGE
achieved using any factor that will help the business to succeed when competing with rivals
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ADDED VALUE
the difference between the price that is charged and the total cost of the inputs needed to create the product
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OPPORTUNITY COST
the value which is expected to flow from the next best alternaive decision
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TRADE OFFS
occur when two things cannot be fully achieved
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TEST MARKETING
the new product will be marketed and sold within a small area to see how potential customers react to it
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PRODUCT TRIAL
refers to the way customers will buy something once to see if they like it
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REPEAT PURCHASES
occur when the customer decides to buy the product on a regular basis
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ECONOMIC CYCLE
the sequence of depression, revovery, boom and recession which creates significant fluctuations in demand for may products
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GDP
a meausre of the size of the economy and gives the money value of all output
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ECONOMIC GROWTH
an increase in the total output of the economy
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UNEMPLOYMENT
occurs when there are people who want to work but canot find a job
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INFLATION
a sustaine rise in the general level of prices for goods and services
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GLOBALISATION
refers to the way in which all the world's economies have become more closely intergrated
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EXCHANGE RATE
the rate at which one currency is exchanged for another
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GOVERNMENT EXPENDITURE
spending by the governement on services to the public
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PUBLIC SECTOR
the part of the economy that is directly organised by the government
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PRIVATE SECTOR
all the businesses and self-employed people that take their decisions independently
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START UP COSTS
incurred in setting up a business organisation
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CAPITAL SPENDING
occurs when a business einvests in fixed assets or something of long term benefit to the business
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RUNNING COSTS
paid by a business organisation on a regular basis
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FIXED COSTS
not directly linked to the level of output of the business
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VARIABLE COSTS
directly linked to the level of output of the business
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INTERNAL FINANCE
comes from within the business
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RETAINED PROFIT
profit that can be reinvested in the business rather than being given to the owners of the business in the form of income or dividend payments
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SALE OF ASSETS
can refer to physical assets
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WORKING CAPITAL
cash held by the business and used to keep day to day business going in the short run
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LOAN
fixed amount of money borrowed for a fixed period at a fixed interest rate
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OVERDRAFT
short term flexible loan where a bank allows a business to operate with a negative bank balance
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DEBENTURES
loans that be bought and sold in the same way as loans
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VENTURE CAPITAL
money invested in a new business by one or more indiviuals who believe that the business will succeed and therefore increase in value
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ORDINARY SHARE CAPITAL
long term finance raised by selling shares in a business
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EQUITIES
another name for shares
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LEASING
allows a business to use an asset without owning it
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TRADE CREDIT
offered when suppliers allow a time period before payment for suppliers must be made
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SOLE TRADER
an unincorporated business owned and operated by one person
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PARTNERSHIP
an unincorporated business owned and operated by two or more individuals
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UNLIMITED LIABILITY
an individual had no legal seperation from their business and is therefore personally responsible for the debts of the business
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LIMITED LIABILITY
protects shareholders of incorporated businesses
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PRIVATE LIMITED COMPANIES
have limited liability for business debts but cannot raise finance from the general public
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PUBLIC LIMITED COMPANIES
owned by their shareholders, who have limited liability
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REVENUE
money earned by a business
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SALES REVENUE
moeny earned by selling goods and services
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SALES VOLUME
refers to the number of goods or services
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SELLING PRICES
the amount charged to a customer for the purchase of a good or service
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COST PLUS PRICING
calculates the cost of producing a product then adds a percentage of this cost to arrive at a price
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COMPETITOR BASED PRICING
takes account of prices charged for similar products in the market
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PREMIUM PRICING
charges a high price for the product
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PRICE DISCRIMINATION
charges customers in different market segments diferent prices for the same product
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MARKETING MIX
a model for considering different aspects of a product and its market
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BREAK EVEN REVENUE LEVEL
the amount of sales revenue needed to exactly cover all of the costs
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BREAK EVEN POINT
the volumes of sales at which a business breaks even
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BREAK EVEN ANALYSIS
the process of calculating and interpreting infomation relating to the break even revenue level
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CONTRIBUTION
the part of sales revenue which can be put towards paying the fixed costs of a business
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MARGIN OF SAFETY
the amount by which sales can fall from their current level before reaching the break even point
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TURNOVER
total sales revenue for the year
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COST OF GOODS SOLD
the cost of inputs to the actual production process
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OVERHEADS
the costs that stay the same regardless of how much is produced
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GROSS PROFIT
sales revenue less the immediate costs of prodicing the goods sold
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NET PROFIT
what remains from sales revenue after the deduction of all operating costa
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GROSS PROFIT MARGIN
gross profit as a percentage of sales revenu
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NET PROFIT MARGIN
net profit as a percentage of sales revenue
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BUSINESS PLAN
a written document detailing all aspects of a business idea
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BUSINESS PLANNING
the process of carrying out market research and thinking through a business idea in order to construct a business plan
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CASH FLOW FORECAST
a month by month prediction of the timing of expected cash inflows and outflows in a business
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CASH INFLOWS
money coming into a business
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CASH OUTFLOWS
money leaving a business
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INSOLVENCY
when a business fails because a sustained lack of working capital means that debts cannot be paid
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Other cards in this set

Card 2

Front

a person who has ideas and makes them happen

Back

ENTREPRENEUR

Card 3

Front

the financial reward to the owner of the business

Back

Preview of the back of card 3

Card 4

Front

rules that a business has to follow

Back

Preview of the back of card 4

Card 5

Front

spending on equipment and premises

Back

Preview of the back of card 5
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