WHAT IS A BUSINESS?: Unit 1

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Mission
an organisations aims or long term intentions, it's ultimate purpose
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Mission Statement
a statement of an organisations aims using language to motivate employees and convince customers
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Business Objectives
goals that must be achieved to realise the stated aims of an organisation. These tend to be long-term.
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Corporate Obectives
goals of the whole organisation as opposed to different elements - these are often dictated by mission statements
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Functional Objectives
goals of each functional area of a business e.g. marketing, finance or HR
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Strategy
the medium to long term plans through which an organisation tends to achieve its objectives
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What are the SMART objectives?
S = specific ; M = measurable ; A = agreed ; R = realistic ; T = timebound
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What are some common business objectives?
Profit, growth, survival
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Cash Flow
the amount of money flowing in and out of a business over a period of time
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Diversification
where a business moves into the production or sale of different goods and services
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Market Standing
being innovative and being best retailer/leader of technology. Market standing is having a reputation in your chosen market
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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 total income received from an organisations activities
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Calculation for total revenue?
total revenue = price per unit x quantity sold
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Fixed Costs
costs that don't vary directly with the output in the short run e.g. rent and wages
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Variable Costs
costs that vary directly with the output in the short run e.g. raw materials
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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
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What is the calculation for total costs?
total costs = fixed costs + variable costs
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Wages
money paid to operatives who make the product
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Salaries
paid to staff who aren't directly involved in production
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Profit
the difference between the income of a business and its total costs
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What is the calculation for profit?
Profit = total revenue - total costs
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How can you improve profit?
increasing sales revenue or decreasing costs
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Why is profit important?
It is a reward, motivator, measure of success, source of finance and guide for future investment
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Other cards in this set

Card 2

Front

Mission Statement

Back

a statement of an organisations aims using language to motivate employees and convince customers

Card 3

Front

Business Objectives

Back

Preview of the front of card 3

Card 4

Front

Corporate Obectives

Back

Preview of the front of card 4

Card 5

Front

Functional Objectives

Back

Preview of the front of card 5
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