WHAT IS A BUSINESS?: Unit 1 0.0 / 5 ? BusinessWhat is a Business?ASAQA Created by: alvlrevisionCreated on: 05-04-18 13:59 Mission an organisations aims or long term intentions, it's ultimate purpose 1 of 24 Mission Statement a statement of an organisations aims using language to motivate employees and convince customers 2 of 24 Business Objectives goals that must be achieved to realise the stated aims of an organisation. These tend to be long-term. 3 of 24 Corporate Obectives goals of the whole organisation as opposed to different elements - these are often dictated by mission statements 4 of 24 Functional Objectives goals of each functional area of a business e.g. marketing, finance or HR 5 of 24 Strategy the medium to long term plans through which an organisation tends to achieve its objectives 6 of 24 What are the SMART objectives? S = specific ; M = measurable ; A = agreed ; R = realistic ; T = timebound 7 of 24 What are some common business objectives? Profit, growth, survival 8 of 24 Cash Flow the amount of money flowing in and out of a business over a period of time 9 of 24 Diversification where a business moves into the production or sale of different goods and services 10 of 24 Market Standing being innovative and being best retailer/leader of technology. Market standing is having a reputation in your chosen market 11 of 24 Price the amount paid by a consumer to purchase one unit of a product 12 of 24 Total Revenue the total income received from an organisations activities 13 of 24 Calculation for total revenue? total revenue = price per unit x quantity sold 14 of 24 Fixed Costs costs that don't vary directly with the output in the short run e.g. rent and wages 15 of 24 Variable Costs costs that vary directly with the output in the short run e.g. raw materials 16 of 24 Semi-variable costs costs that combine elements of fixed costs and variable costs e.g. a worker may be given a bonus alongside their set wage for each product produced 17 of 24 What is the calculation for total costs? total costs = fixed costs + variable costs 18 of 24 Wages money paid to operatives who make the product 19 of 24 Salaries paid to staff who aren't directly involved in production 20 of 24 Profit the difference between the income of a business and its total costs 21 of 24 What is the calculation for profit? Profit = total revenue - total costs 22 of 24 How can you improve profit? increasing sales revenue or decreasing costs 23 of 24 Why is profit important? It is a reward, motivator, measure of success, source of finance and guide for future investment 24 of 24
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