Unit 1 Definitions

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  • Created by: holly
  • Created on: 12-12-13 15:05
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 advice, sometimes for free
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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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Breakeven Output
The point at which the total sales of a business equal total costs i.e. the business is making neither a profit or a loss
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Budget
A detailed plan of income and expenses ex[ected over a 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 Plan
A detailed descri,ption of a new or existing business, including the company's strategy, aims and objectives, marketing & financial plans
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Business Objective
A stated goal or target of a business
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Cash Flow
The movements of cash into and out of a busines
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Cash Flow Forecast
A projection, usually by week or month, of the likely cash inflows and outflows of a business
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Contribution
The difference between total sales and total variable costs
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Contribution per Unit
A key number of breakeven analysis: the difference between selling price per unit and variable cost per unit
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Costs
Amount incurred by a business as a result of its trading operations
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Demand
The amount of a product or servce 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 suh as segmentation, age, income, class etc.
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Elasticity Of Demand
The responsiveness of demand to 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. Compared with physical markets where buyers and sellers meet face to face
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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 catagories (e.g. production, marketing, administration)
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Fixed Costs
Costs that do not vary with the level of output e.g. rent
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Franchisee
The person or company which operates a franchised business format-under license from a franchisor
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Franchisor
The owner of a business format 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 which sets out estimates of the likely demand for and value of the firms sales
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Inputs
The resources that go into producing goods and services
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Limited Liability
Shareholders are only liable for the money they have invested - not for the 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 te actual level of output and the break even output
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Market
Any place where buyers and sellers come together which a view of exchanging transactions
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Market Growth
The percentage growth in the size 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 a market into smaller sections 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. Usually expressed in percentage terms. The firm with the largest percentage market share is known as the market leader
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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 or in terms of quantities 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 measure by the benefits foregone of the next best alternative. (The next best alternative foregone)
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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. Compare with a temporary employee who is employed for a shorter, time-limited period
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Primary Research
The market research that involves the 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 based on attitudes, opinions, beliefs, intentions etc.
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Quantitative Research
Market research concerned with collecting data that can be quantified e.g. sales statistics
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Return
The rewards to enterprise e.g. profit, satisfaction
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Revenue
The income or sales that a business achieves in a period. Calculated by multiplying selling price per unit x units 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 and analysing a research sample
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Share Capital
The finance invested in a business by the shareholders
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Social Enterprise
A business that has objectives other than making a 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 costs and fixed costs in a business
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Trade Credit
Amounts owed to suppliers of a business
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Trademark
A word, symbol, or phrase, used to identify a particular company's product and differentiate it from other companies' product
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Unlimited Liability
Describes the potential risk that sole trafers and partnerships face. They are liable for the debts of the business
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Other cards in this set

Card 2

Front

An external contact of a business that provides support and advice, sometimes for free

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 equal total costs i.e. the business is making neither a profit or a loss

Back

Preview of the back of card 5
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