Business Keywords 1.4

Limited Liability

Limited Liability

The level of risk is limited to the amount of money that has been invested in the business.

Assets

Property such as a house or car.

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.

Sole Trader

A type of business owned by just one person that has unlimited liability for any business debts.

Private Limited company (plc)

A small privately run business that is owned by shareholders who enjoy limited liability.

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).

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.

Franchisor

An established business that gives permission to an entrepreneur to trade using its name and products.

Franchisee

An entrepreneur who pays a fee to trade using the name and products of an established business.

Royalties

Percentage of the sales revenue to be paid to the franchisor.

Insolvent

When a business has no cash left to pay its debts.

Bankrupt

When an individual is unable to pay their debts, even after all personal assets have been sold for cash.

Labour

Workers or workforce.

Footfall

The number of people passing a particular location within a given time period.

Demographics

The characteristics of the population, such as gender, age, religion and wealth.

Bulk-gaining product

An end product that is bigger than the raw materials used to make it, such as bicycle.

Bulk-reducing product

A product that is smaller than the raw materials it used, such as paper.

Fixed premises

Buildings that have to be where they are (eg the high street).

Proximity

Nearness: whether or not a business wants to be close to a factor such as 'materials'.

Place

How and where the supplier is going to get the product or service to the consumer.

Price

Setting the price that retailers must pay, which in turn affects the consumer price.

Product

Targeting customers with a product that has the right blend of functional and aesthetic benefits without being too expensive to produce/

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.

Business Plan

A document that outlines how an entrepreneur is going to set up a new business.