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Business Revision


GCSE
  
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Supplier
 
a business which sells for (supplies) products to another business
Customer
 
any person or organisation which buys or is supplied with a product by a business
Consumer
 
the person who ultimately uses (or consumes) a productwh
Markets
 
where buyers and sellers meet to exchange goods and services
Customer needs
 
the wants and desires of buyers of a product or the customers of a business
Market Research
 
the process of gaining information about customers, competitors and market trends through collecting primary or secondary data
Primary (or field) research
 
the gathering of new information, called primary data which has not been collected before
Survey
 
research involving asking questions of people or organisations
Respondents
 
those who provide data for a survey usually by answering questions in a questionnaire or interview
Focus group
 
in market research, a group of people brought together to answer questions and discuss a product, brand or issue
Questionnaire
 
a list of questions to be answered by respondents, designed to gather information about consumers' tastes
Secondary Research
 
the process of gathering secondary data, which is information that has already been gathered. such as sales records, government statistics, newspaper articles or reports from market research groups
Qualitative data
 
information about opinions, judgement's and attitudes
Quantitative data
 
data that can be expressed as numbers and can be statistically analysed
Market segment
 
part of a market that contains a group of buyers with similar buying habits, such as age or income
Price sensitive
 
when the price is very important in the decision about whether or not to buy
Market map (or positioning map)
 
a diagram that shows the range of possible positions for two features of a product such as low to high price and low to high quality
Gap in the market
 
occurs when no business is currently serving the needs of customers for a particular product
Product range
 
a group of similar products made by a business, like a number of different soap powders
Added Value
 
the increased worth that a business creates for a product, it is the difference between what a business pays its suppliers and the price that it is able to charge for the product/service
Unique selling point or USP
 
a characteristic of a product that makes it different from other similar products being sold in the market such as design, quality or image
Franchise
 
the right given by one business to another to sell goods or services using its name
Franchisee
 
a business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor
Franchisor
 
the business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment
Entrepreneur
 
a person who owns and runs their own business and takes risks
Enterprises
 
another word for businesses
Enterprise
 
a willingness by an individual or a business to take risks, show initiative and undertake new ventures
Risk
 
the chance of damage or loss occurring as a result of making a decision
Goods
 
physical products like a car or a pair of scissors
Services
 
non-physical products such as a taxi journey or haircut
Creative thinking
 
coming up with new and unique ideas.
Competitive advantage
 
an advantage a business has that enables it to perform better than its rivals in the market and which is both distinctive and defensible
Deliberate creativity
 
the intentional creation of new ideas through recognized and accepted techniques
Lateral thinking
 
thinking differently to try and find new and unexpected ideas
Blue skies thinking
 
a technique of creative thinking where participants are encouraged to think of as many ideas as possible about an issue or a problem
Invention
 
the discovery of new processes and potentional new products, typically after a period of research
Innovation
 
the process of transforming inventions into products that van be sold to customers
Patent
 
right of ownership of an invention or process when it is registered with the government
Copyright
 
legal ownership of material such as books, music and films which prevents being copied by others.
Trademarks
 
the symbol, sign or other features of a products or business that can be protected in law
Calculated risk
 
the probability of a negative event occurring
Downsides
 
the disadvantages of a course of an action, including what can go wrong
Upsides
 
the advantages of a course of an action, including what can go right
Financial objectives
 
targets expressed in money terms such as making profit, earning income or building wealth
Revenue or sales revenue or turnover or sales turnover
 
the amount of income received from selling goods or services over a period of time
Sales volume
 
the number of items or services sold by a business over a period of time
Fixed costs
 
cost which do not vary with the output produced such a rent, business rates, advertising costs, administration costs and salaries
Total costs
 
all the costs of the business. it is equal to fixed costs plus variable costs
Variable costs
 
costs which change directly with the number of products made by a business such as the costs of buying raw materials
Net cash flow
 
the receipts of a business minus its payments
Insolvency
 
when a business can no longer afford to pay its bills and debts
Cash flow forecast
 
a prediction of how much cash will flow through a business in a period of time in the future
Opening balance
 
the amount of money in a business at the start of a month
Closing balance
 
the amount of money in a business at the end of a month
Commulative cash flow
 
the sum of cash that flows into a business over time
Trade credit
 
when a supplier gives the customer a period of time to pay back a bill
Stocks
 
materials that a business holds. some could be materials waiting to be used in the production process or could be finished and be waiting to be delivered to the customer
Long-term finance
 
sources oof money for businesses that are borrowed or invested typically for more than a year
Short-term finance
 
sources of money for businesses that may have to be repaid either immediaetly of fairly quickly, such as an overdraft, usually within a year
Share
 
a part ownership in a business for example a shareholder owning 25% of the shares of a business owns a quarter of the business
Personal savings
 
money that has been set aside and not spent by individuals and households
Share capital
 
the monetary value of a company which belongs to its shareholders for example, if 5 people invest £10,000 into a business then the share capital will be £50,000
Shareholders
 
the owners of a comapny
Venture capitalists
 
an individual or company which buys shares in what they hope will be a fast growing company with a long-term view of selling the shares at a profit
Loan
 
borrowing a sum of money which has to be repaid with interest over a period of time such as 1-5 years
Security (collateral)
 
assets owned by a business which are used to guarantee repayments of a loan; if the business fails to pay off the loan, the lender can sell what has been offered as security
Mortgage
 
a loan where property is used as security
Dividend
 
a share of the profits of a company received by shareholders who own shares
Retained profit
 
profit which is kept back in the business and used to pay for investments in the business
Leasing
 
renting equipment or premises
Overdraft facility
 
borrowing money from a bank by drawing more money than is actually in a current account interest is charged on the amount overdrawn
Business plan
 
a plan for the development of a business giving forecasts of items such as sales, costs and cash flow
Marketing Mix
 
the combination of factors which help the business to take into account customer needs when selling a product- usually summarized as the 4 P's which are price product promotion and place
Price
 
the amount of money customers have to give up to acquire a product
Product
 
a good or service produced by a business or organisation and made available to customers for consumption
Promotion
 
communication between the business and the customer, making the customer aware that the product is for sale, telling and explaining to them what is the product, making customers aware of how the product will meet the customers' needs and persuading them to buy it for the first time or again
Place
 
the way in which a product is distribusted how it gets from the producer to the consumer
Sole trader
 
the only owner of a business whcih has unlimited liability
Unlimited liability
 
a legal obligation on the owner of a business to settle (pay off) all the debts of a business. In law there is no distinction between what the business owns and what the business owner owns.
Limited liability
 
when shareholders of a company are not personally liable for the debts of the company the most they can loose is the value of their investment in the shares of the company
Companies
 
businesses whose shareholders have limited liability
Records
 
evidence of what has happened int he past, records could be kept on paper form or in the computer...files for example
HM revenue and customs
 
the government authorities in the Uk responsible for collecting tax
VAT ( value added tax)
 
a tax on the value of sales: it is paid by a business to the government
Income tax
 
a tax on the value of income earned by workers; this includes sole traders who have ti pay income tax on their net earnings
National Insurance Contributions (NICs)
 
a tax on the earning of workers. Employers National Insurance contributions are paid by employers on the wages of their workers; employees and sole traders have to pay NIC on their earnings
Corporation tax
 
a tax on the profits of limited companies
Customer service
 
the experiences that a customer gets when dealing with a business and the extent to which that experiences meets and exceeds customer needs and expectations
Cusomer satisfaction
 
a measure of how much products meet customers' expectations
Repeat purchases
 
orders or sales that occur from customers who have brought the product or service in the past
Job applicant
 
a parson who shows they would like to be considered for appointment to a particular job with a business
Job description
 
doctument that describes the dutites of a worker and his or hers status in the organisation
Person specification
 
a profile of the type of person needed for a job - their skills and qualities
Application form
 
document to be filled in with personal details
Cirriculam Vitae
 
a brief list of the man details about a person including name , address, qualifications and experience
Motivation
 
in work, the desire to complete a task and meet the needs of the business cintistantly
Commoditites
 
raw materials such as coal , oil, copper, iron ore, wheat and soya
Commodity markets
 
where buyers and sellers meet to exchange commoditites ofetn these are international, organised markets
Demand
 
the amount of consumers are willing and able to buy at any price given
Supply
 
the amoutn sellers are willing yo offer for sale at any given price
Shortage
 
when the demand for the good or service os greater than the supply. When a shortage exist prices tend to rise
Goods market
 
the market for everyday products such a chlothes, food.
Interest rate
 
the percentage reward or payment over a period of time that is given to saver or paid by borrowers on savings or loans
Bank of England
 
the central bank for the UK, its role is to monitor the banking system and to be a banker to the banks. It is responsible for setting interest rates in the UK
Variable Interest costs
 
interest costs that can change over the lifetime of a loan depending on what is happening to other interest rates in the economy
Fixed interest rates
 
interest rates that stay the same over and agreed period of a loan
Exchange rate
 
the exchange rate is the price of buying a foreign currency it sets how much of the foreign currency you will get for a £
Stakeholder
 
an individual or a group which has interest in and is affected by the activities of a business: stakeholders have an interest in how the business operates and wether or not it is successfull
Recession
 
a situation when the level of economic growth is negative for two successive quarters
The economy
 
the economic activity carried out by people and businesses in a country
Economic activity
 
the amount of buying and selling that takes place in a period of time
Economic growth
 
rises in the rate of economic activity in an economy. It is measured by calculating the value of sales in an economy over a period of time
Profit
 
occurs when revenues of a business are greater than its costs over a period of time
Loss
 
occurs when the revenues of a business is less than its costs over a period of time
Brand
 
a named product which customers see as being different from other products and which they can assosicate or identify with
Brand image
 
the idea/impression/image the customers have in their minds about the brand
Cash
 
notes, coins and momey in the bank
Cash flow
 
the flow of cash into and out of the business
inflow
 
the cash flowing into a business, its receipts
outflow
 
the cash flowing out of a business, its payments
Factoring
 
a source of finance where a business is able to receive cash immediatly for the invoices it has issued from a factor, such as a bank, instead of waiting a typical 30 days to be paid
Surplus
 
when the demand for a good or service is less than the avaliablity supply. When a surplus exists, prices will tend to fall
Export
 
an export is the sales of a good or service to a foreign buyer that leads to a flow of money into the UK. The foreign buyer will have to change their currency into pounds to complete the purchase
Import
 
an import is the purchase of a good or servicw from a foreign business that leads to a flow of money of of the UK. The UK buyer will have to changes pounds into the seller's currency to make the transaction
Business Cycle
 
fluctuations in the level of economic activity over a period of time. Most economies experience times when the economic activity is rising and others when the economic activity is slowing

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