Key Terms - Unit 1

  • Created by: Zoe
  • Created on: 11-12-12 17:54
Enterprise
Almost any business or organisation. process by which new businesses are formed and new producs and services are created and brought to the market.
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Enterprise skills
skills that allow an individual or an organisaion to respond effectively to changing situations
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Entrepreneurs
individuals who have an idea that they develop by setting up a new business and encouraging it to grow. they take the risk and the subsequent profits that come with success or the losses that come with failure
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Opportunity Cost
the 'real cost' of taking a particular action or the next best alternative forgone
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Franchise
when a business gives another business the right to supply it's product or service in exchange for money
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Copyright
Legal protection against copying for composers, authors and artists
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Patent
an official document granting the holder the right to be the only user or producer of a newly invented product or process for a specified period
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Trademark
signs, logos, symbols or words displayed on a company's products or its advertising. including sounds or music, which distinguish it's brands from those of it's competitors
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Resources (Inputs)
the elements that go into producing goods and services
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Factors of production
the four elements- land, labour, capital and enterprise - used in the production of goods and services
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Production
the process whereby resources are converted into a form that is intended to satisfy the requirements of potential customers
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Output
the finished products resulting from the transformation process
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Primary sector
the organisations involved in extracting raw materials
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Secondary sector
the organisations involved in processing or refining the raw materials from the primary sector into finished or semi-finished products
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Tertiary sector
the organisations involved in providing services to customers and to other businesses, in either the public or the private sector
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Adding value
the process of increasing the worth of resources by modifying them
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Value added
sales revenue minus the cost of brought-in materials, components and services
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Unique selling point/ proposition
a feature of a product or service that allows it to be differentiated from other products
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Business plan
a report describing the marketing strategy, operational issues and financial implications of a business start-up
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Marketing
the anticipation and satisfying of customers' wants in a way that delights consumers and also meets of the organisation
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Market research
the systematic and objective collection, analysis and evaluation of information that is intended to assist the marketing process
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Primary market research
the collection of information first-hand for a specific purpose
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Secondary market research
the use of information that has already beeen collected for a different purpose
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Qualitative market research
the collection of inforation about the market based on subjective factors such as opinions and reasons
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Quantitative
the collection of inforation about the market based on numbers
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Sample
a group of respondents or factors whose views or behaviour should be representative of the target market as a whole
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Random sample
a group of respondents in which each member of the target population has an equal chance of being chosen
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Quota sample
a group of respondants comprising several different segements, each sharing a common feature. The number of interviewees in each classification is fixed to reflect their percentage in the total target population, interviewees selected non-randomly
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Stratified sample
a group of respondants selected according to particular features
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The market
a place where buyers and sellers come together
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Demand
the amount of a product or service that consumers are willing and able to buy at any at any given price over a period of time
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Market segmentation
the classification of customers or potential customers into groups or sub-groups, each of which responds differently to different products or mareting approaches
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Segmentation analysis
where a firm uses quantitative and qualitative data or information to try to discover the types of consumer who buy it's products and why
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Market size
the volume of sales of a product or the value of sales of a product
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Market growth
the percentage change in sales over a period of time
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Market share
the percentage or proportion of the total sales of a product or service achieved by a firm or a specific brand of a product
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Unincorporated business
there is no distinction in law between the individual owner and the business itself. eg sole traders
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Incorporated business
this has a legal identity which is seperate from the individual owners. eg plc's & ltd's
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Unlimited liability
a situation in which the owners of a business are liable for all the debts that the business may incur
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Limited liability
a situation in which the liability of the owners of a business is limited to the fully paid-up value of the share capital
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Sole trader
a business owned by one person. the owner may operate on his or her own or may employ other people
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Partnership
a form of business in which two or more people operate for the common goal of making profit
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Private limited company
a small to medium-sized business that is usually run by the family or the small group of individuals who own it
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Public limited companyt 2 shareholders, 2 directors, a quallifie
a business with limited liability; share capital of over £50,000; at least 2 shareholders, 2 directors, a quallified company secretary; and, usually, a wide spread of shareholders
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Ownership
providing finance and therefore taking risks
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Stakeholders
any group of individuals with an interest in a business
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Ordinary share capital
money given to a company by shareholders in return for a share certificate that gives them part ownership of the company and entitles them to a share of the profits
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Loan capital
money recieved by an organisation in return for the organisation's agreement to pay interest during the period of the loan and to repay the loan within an agreed time
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Bank loan
a sum of money provided to a firm or an individual by a bank for a specific, agreed purpose
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Bank overdraft
when a bank allows an individual or organisation to overspend it's current account in the bank up to an agreed limit for a stated time period
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Venture capital
finance that is provided to small or medium-sized firms that seek growth but which may be considered as risky by typical share buyers or other lenders
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Personal sources of finance
money that is provided by the owner(s) of the businesses from thier own savings or personal wealth
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Teleworking
working in a location that is seperate from a central workplace, using telecommunication technologies
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Least-cost site
the business location that allows a firm to minimise it's costs
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Infrastructure
the network of utilities such as transport links, sewerage, telecommunications systems, health services and educational facilities
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Qualitative factors
points based on the opinions and wishes of individuals
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Price
the amount paid by a consumer to purchase one unit of a product
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Total revenue
the income recieved from an organisation's activities. Total Revenue = Price Per Unit x No. of Units Sold
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Profit
the difference between the income of a business and it's total costs. Profit = Total Revenue - Total Costs
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Fixed costs
costs that do not vary directly with output in the short run
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Variable costs
Costs that vary directly with output in the shrrt run
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Total costs
the sum of fixed costs and variable costs
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Contribution per unit
Selling Price Per Unit - Variable Costs Per Unit
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Total contribution
the difference between total revenue and total variable costs
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Breakeven analysis
study of thr relationship between total costs and total revenue to identify the output at which a business breaks even
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Breakeven output
the level of output at which total sales revenue is equal to total costs of production
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Cash flow
the amounts of money flowing into and out of a business over a period of time
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Cash inflows
reciepts of cash, typically arising from sales of items, payments by debtors, loans recieved, rent charged, sale of assets and interest recieved
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Cash outflows
payments of cash, typically arising from the purchase of items, payments to creditors, loans repaid or given, rental payments, purchase of assets and interest payments
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Net cash flow
the sum of cash inflows to an organisation minus the sum of cash outflows over a period of time
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Cash-flow cycle
the regular pattern of inflows and outflows of cash within a business
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Cash-flow forecasting
the process of estimating the expected cash inflows and cash outflows over a period of time. Cash flow is often seasonal, so it is advisable to forecast for a period of one year.
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Cash-flow statement
a decription of how cash flowed into and out of a businessduring a particular period of time
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Liquidity
the ability to convert an asset into cash without loss or delay
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Budget
an agreed plan establishing, in numerical or financial terms, the policy to be pursued and the anticipated outcomes of that policy
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Income budget
shows the agreed, planned income of a business over a period of time.
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Expendature budget
shows the agreed, planned expenditure of a business over a period of time
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Profit budget
shows the agreed, planned profit of a business over a period of time
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Management accounting
the production and use of financial and accounting information for internal purposes of planning, review and control.It is based on predictions of what will happen and analysis of the actual outcomes in comparison to the original plans
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Other cards in this set

Card 2

Front

skills that allow an individual or an organisaion to respond effectively to changing situations

Back

Enterprise skills

Card 3

Front

individuals who have an idea that they develop by setting up a new business and encouraging it to grow. they take the risk and the subsequent profits that come with success or the losses that come with failure

Back

Preview of the back of card 3

Card 4

Front

the 'real cost' of taking a particular action or the next best alternative forgone

Back

Preview of the back of card 4

Card 5

Front

when a business gives another business the right to supply it's product or service in exchange for money

Back

Preview of the back of card 5
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