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76 terms

Business Studies Key Terms- Unit 1

AQA unit 1 key terms Starting a business Financial Planning
STUDY
PLAY
Enterprise
process by which new business are formed and new products and services created and brought to the market. Usually led by and entrepreneur
Enterprise Skills
skillls that allow an individual or organisation to respond effecively to chnging market situations, including problem solving skills, thinking and acting innovatively and creatively, and understanding the importance of risk and uncertainty
Entrepreneurs
individuals who have an idea that they deveop by setting up a new business. They take the risk and the subsequent profits that come with the success or losees that come with failure
Opportunity Cost
the 'real cost' of taking a particular action or the next best alternative foregone i.e. next best thing that you could have done but did not
Franchise
when a business (franchisor) gives another business (franchisee) the right to supply its product or service
Copyright
legal protection against copying for authors, composers and artists
Patent
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
Trademark
signs, logos, symbols or words displayed on a company's products or advertising, including sounds or music, which distinguish its brands from those of its competitors
Factors of Production
four elements- land, labour, capital and enterprise- used in the production of goods and services
Production
process whereby resources (factors of production) are converted into a form that is intended to satisfy the requirements of potential customers
Output
the finished products resulting from the transformation process
Primary sector
those organisations involved in extracting raw materials (e.g. farming, fishing, forestr, mining, quarrying)
Secondary (manufacturing) sector
those organisations involved in processing or refining the raw materials from the primary sectors into finished or semi-finished products (e.g. paper mills, food processors, vehicle manufacturers)
Tertiary sector
those organisations involved in providing services to customers and to other business, public or private. (e.g. education, health, restaurants)
Adding Value
process of increasing the worth of resources by modifying them
Value Added (added value)
sales revenue minus cost of bought-in materials, components and services
USP
feature of a product the allows it to be differentiated from other products
Business Plan
report describing the marketing stratergy, operational issues and financial implications of a business start-up
Marketing
the anticipation and satisfying of customers' wants in a way that delights consumers and also meets the needs of the organisation
Market Research
the systematic and objective collection, analysis and evaluation of information that is intended to assist the marketing process
Primary Market Research
collection of information first-hand for a specific purpose
Secondary Market Research
use of information that has already been collected for a different purpose
Qualitative Market Research
collection of information about the market based on subjective facotrs such as opinions and reasons
Quantitative Market Research
collection of information about the market based on numbers
Random Sample
group of respondents in which each member of the target population has an equal chance of being chosen
Quota Sample
group of respondents compormising several different segments, each sharing a common feature (age, gender). Number of interviewees in each classification is fixed to reflect their percentage in the total population, selected non-randomly
Stratified Sample
group of respondents slected according to particular features (age, gender). However, unlike quota, in stratified sampling the sub-groups and sizes are chosen specifically
Market
place where buyers and sellers come together
Demand
amount of a product or servce that customers are willing and able to buy at any given price over a period of time
Market Segmentation
classification of customers (or potential) into groups or sub-groups (market segments), each of which reponds differently to different products or marketing approaches
Segmentation Analysis
where a firm uses quantitative and qualitative data or information to try to discover the types of consumer who buy its products and why
Market Size
volume of sales of a product (number computer sales) or the value of slaes of a product (revenue form computer sales)
Market Growth
percentage change in sales (volume or value) over a period of time
Market Share
percentage or proportion of the total sales of a product or service achieved by a firm or a specific brand of a product
Unincorporated Business
no distinction in law between indiviudal owner and business itself. Identity of business and owner is the same- sole traders and partnerships
Incorporated Business
a legal identity that is separate from the individual owners. As a result, organisations can own assets, owe money and enter into contracts in their own right- private ltd companies and public ltd companies
Unlimited Liability
situation in which owners of a business are liable for all the debts that the business may incur
Limited Liability
situation in which the liability of the owners of a business is limited to the fully paid-up value of the share capital
Partnership
form of business in which two or more people operate for the common goal of making a profit
Private Ltd Company
small to medium-sized business that is usually run by the family or the small group of individuals who own it
Public Ltd Company
business with limited liability; a share capital of over £50,000; at least two shareholders, two directors, qualified company secretary and usually a wide spread of shareholders.
Ownership
providing finance and therefore taking risks
Control
managing the organisation and making decisions
Stakeholders
any group of individuals with an interest in a business. This incudes employees, customers, shareholders and the local community
Ordinary Share Capital
money given to a company by share-holders in return for a shae certificate that gives them part ownership of the company and entitles them to a share of the profits
Loan Capital
money recieved by an organisation in return for the organisations agreement to pay interest during the period of the loan and to repay the loan within an agreed amount
Bank Loan
sum of money provided to a firm or an individual by a bank for a specific, agreed purpose
Bank Overdraft
when bank allows an individual or organisation to overspend its current account in the bank to an agreed limit and for set period of time
Venture Capital
finance that is provided to small or medium-sized firms that seek growth but which may be considered as risky by typical buyers or lenders
Personal Sources of Finance
money provided by owner of business from their own savings or personal wealth
Teleworking
working separate from a central workplace, using telecommunication technologies
Least-cost Site
business location that allows a firm to minimise its costs (hence selling price)
Infrastructure
network or utilities such as transport links, sewerage, telecommunication systems, health services and educational facilities
Qualitative Factors
based on the opinions and wishes of individuals, can influence business decisions because an entreprenuer will want to include his or her wishes and preferences in decisions taken
Price
amount paid by a consumer to purchase one unit of a poduct
Total Revenue
income received from an organisation's activities
price per unit x quantity sold
Profit
difference between income and total costs
revenue - total costs
Fixed Costs
costs that dont vary directly with output in the short run (rent)
Variable Costs
costs that vary directly with output in short run (raw materials)
Total Costs
fixed costs plus variable costs
Contribution per Unit
selling price per unit - variable cost per unit
Total Contribution
difference between revenue and total variable costs
Breakeven Analysis
study of relationship between total costs and total revenue to identify the output at which a business breaks even
Breakeven Output
level of output at which total sales revenue is equal to total costs of prduction
Cash Flow
amounts of money into and out of a business durnig period of time
Cash Inflows
reciepts of cash, typically from sales of items, payments by debtors, loans recieved, sales of assets
Cash Outflows
payments of cash, typicaly from purchase of items, payments to creditors, loans repaid, purchase of assets
Net Cash Flow
sum of cash inflows to an organisation minus sum of cash outflows over a period of time
Cash-flow Cycle
regular pattern of inflows and outflows of cash within a business
Cash-flow Forecasting
process of estimating the expected cash inflows and cash outflows over a period of time. Cash flow is often seasonal, so forecasting is often over a period of a year
Cash-flow Statement
description of how cash flowed into and out of a business during a particular period of time
Liquidity
ability to convert an asset into cash without loss or delay
Budget
an agreed plan establishing, numerically or financially, the policy to be pursued and the anticipated outcomes of the policy
Income Budget
shows the agreed, planned income of a business (or department) over a period of time. AKA revenue budget or sales budget
Expenditure Budget
shows the agreed, planned expenditure of a business (or department) over a period of time
Profit Budget
shows the agreed, planned profit of a business (or department) over a period of time