The level of risk is limited to the amount of money that has been invested in the business.
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Assets
Property such as a house or car.
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Unlimited liability
The level of risk goes beyond the amount invested, so the personal assets of the business owner could be used to pay off the business's debts.
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Sole Trader
A type of business owned by just one person that has unlimited liability for any business debts.
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Private Limited company (plc)
A small privately run business that is owned by shareholders who enjoy limited liability.
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Shareholders
Investors who are part-owners of a company. They invest in return for a share of the profits and voting rights at the AGM (annual general meeting).
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Franchise
When one business gives another business permission to trade using its mane and products in return for a fee and share of its profits.
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Franchisor
An established business that gives permission to an entrepreneur to trade using its name and products.
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Franchisee
An entrepreneur who pays a fee to trade using the name and products of an established business.
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Royalties
Percentage of the sales revenue to be paid to the franchisor.
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Insolvent
When a business has no cash left to pay its debts.
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Bankrupt
When an individual is unable to pay their debts, even after all personal assets have been sold for cash.
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Labour
Workers or workforce.
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Footfall
The number of people passing a particular location within a given time period.
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Demographics
The characteristics of the population, such as gender, age, religion and wealth.
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Bulk-gaining product
An end product that is bigger than the raw materials used to make it, such as bicycle.
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Bulk-reducing product
A product that is smaller than the raw materials it used, such as paper.
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Fixed premises
Buildings that have to be where they are (eg the high street).
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Proximity
Nearness: whether or not a business wants to be close to a factor such as 'materials'.
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Place
How and where the supplier is going to get the product or service to the consumer.
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Price
Setting the price that retailers must pay, which in turn affects the consumer price.
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Product
Targeting customers with a product that has the right blend of functional and aesthetic benefits without being too expensive to produce/
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Promotion
Within the 4Ps - means all methods that a business uses to persuade customers to buy, for example branding, packaging, advertising to boost the long-term image of the product and short-term offers.
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Business Plan
A document that outlines how an entrepreneur is going to set up a new business.
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