business

aqa gcse terms

Good

A tangible product e.g car

Service

An intangible act e.g financial advice

Consumer

Someone uses goods and services produced by a business

Customer

Someone who buys a product from a business

Entrepreneur

Someone who is willing to take the risks involved in starting a new business

Social enterprise

A business that is set up to help society rather than to make a profit

Interest

The money paid by a bank as reward to encourage people to save with them

GDP

Measures all the income earned in a country's economy in a yea

Public sector organisations

Businesses owned by the government

Private sector organisations

Businesses owned by individuals

Unlimited liability

The owner is personally and fully responsible for all debts of the business( their house, car, personal savings may be repossessed if debts cannot be paided)

Profit

Measures the difference between the value of a business revenue and it's total costs

Stakeholder

Individuals and organisations to affected by, and affect, the activities of a business

Company

A business that has its own legal identity. It can own items, own money, sue and be sued

Partnership

Occurs when two or more people join together in a business enterprise to pursue profit

Deed of Partnership

Legal agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave

Shareholder

Is a person or organisation that owns part of
a company. Each shareholder owns a 'share' of the business

Aim

A general goal of a business

Growth

When a business sells increased quantities of its products

Sole trader

Someone who set up in business on his/her own

Not-for-profit organisation

Organisation set up to achieve objectives other than profit; e.g, a charity

Stock Exchange

A market for buying and selling shares of public limited companies, large numbers of shares are being bought and sold all the same time

Flotation

The process of a company 'going public'. When a private limited company (ltd) becomes a public limited company (plc) and has its shares listed on the Stock Exchange.

Dividends

The financial rewards paid out to shareholders each year

Negotiation

Discussion aimed at reaching an agreement

Market share

Percentage of sales in a particular market recorded by a business

Objective

A specific target that is set for business to achieve

Markets

Bring buyers and sellers together to exchange goods and services

Ethics

Whether a business decision is for it to be morally right or wrong; And ethical decision is made on the basis of what judged to be morally right

Interest rates

The cost of borrowing money, or the reward for saving money. Expressed as a percentage

Limited liability

The amount of debt the owners have to pay back

Negotiation

A discussion between two parties e.g. employees negotiating better pay

Direct action

Customers can stop buying products, employees can go on strike, employees could resist change in the workplace, local council may reject planning permission

Protectionist measures

Policies that governments use to protect their own businesses against foreign competition

Tariff

A tax on imported goods

Quota

A limit on the number of foreign goods imported into a country

Outsourcing

When a business uses another business to produce for it

Merger

When two or more companies join to form a new single firm

Business plan

A document setting out what a business doors and
what it hopes to achieve for the future

Business planning

The process of producing a business plan.

Revenue

Income that a firm receives from selling its goods or services(it is also refer to as 'turnover')

Fixed Costs(FC)

Cost that don't change when a business changes its output

Variable Costs(VC)

Costs that vary with the quantity of output produced

Total Cost (TC)

FC + VC

Uncertainty

Occurs when there is a lack of information about a situation; this means the outcome or consequences are very difficult to predict

Risks

The possibility of something going wrong within a business

Internal growth

Occurs when a business gets bigger by selling more of its products( aka organic growth)

External growth

occurs when a business takes over or merges with another business. Often called integration (see vertical integration and horizontal integration) as one firm is integrated into another one

Economies of scale

When a business is units costs of production fall as its output rises and the business expands

Diseconomies of scale

When the cost per unit increases as a business expands

Takeover

Occurs when one business buys control of another on

Inward investment

Occurs when governments, businesses and individuals invest capital into another country, e.g, building new factories or buying companies.

Bulk buying

When large amount of materials means the business can negotiate a lower unit costs price with suppliers

Wholesalers

They buy in large quantities from a producer and sell to retailers

Technical economy of sale

Occurs when large scale production enables a business to make efficient use of technology e.g. robots

Market capitalisation

Market price of a share x the number of shares

Franchise

Occurs when a franchisor sells the rights to its products to a franchisee; this is usually in the return for a fee and a percentage of turnover

Franchisee

The purchaser of a franchise

M-commerce(mobile commerce)

Buying and selling of goods using a wireless device e.g a phone

E-commerce (electronic commerce)

The act of buying or selling a product using an electronic systems such as the internet

Information and communications technology(ICT)

The computering and communication systems that a business might use to exchange information with stakeholders

Social media

Methods of online communication, e.g websites and applications. They share information and help to develop social and professional contacts

Webchat

A simple means of communicating in real time (that is, instantly) using only web browsers such as Firefox or Internet Explorer

Apps (Applications)

Pieces of software designed for a specific purpose and for use on smartphones and tablets

Intranets

Communication networks which can only be accessed by an organisations employees

Extranets

Can only be accessed by other organisations such as suppliers

Software robots

Advance computer programs that can only operate a range of administrative activities previously carried out by employees

Cloud Computing

The delivery of specialist competing services, such as the storage of very large amount of data, provided by businesses

Global warming

Gradual heating of the Earth surface, oceans and atmosphere

Sustainability

Methods of production which can be continued in the long term without damage to the environment

Non-renewable resources

Those of which only a limited amount of exists such as coal and oil

Environmental reporting

The publication of a business's environmental performance to the general public

Environmental responsibility

The taking of decisions by business, consumers, governments and other groups with the intention of protecting the environment

Environment

The natural world we live in. Landscape and natural features e.g. seas, rivers, forests and mountains

Fair trade products

Customers pay higher prices and offer better trading terms, such as payments with orders. The aim is to improve the living standards of people in poorer countries where the products are produced

Pressure group

A group of people with a common interest who influence public opinion and decisions by businesses and government, e.g protest against animal testing

External cost of production

When a business harmful activities affects other people not directly involved

Recycling

The re-use of raw materials used in making products, often for many firms. E.g. reuse of glass, paper and metals

Environmental reporting

The publication of a business's environmental performance to the general public

Economy

A system for producing and distributing goods, and services to fulfill people's wants

Consumer spending

Value of goods and services bought by consumers over a time period e.g. month or year

Economic climate

Key factors within a country e.g. level of goods and services produced and the number of jobs available

Income elastic products

Products to sales are sensitives to changes in consumer incomes

Globalisation

The growing integration of the world's economies

Multinational company(MNC)

An organization that does business in several countries

International trade

The selling of goods and services across national borders

Exchange rate

Price of one currency expressed in terms of another currency

Imports

Bring (goods or services) into a country from abroad for sale

Exports

Goods and services produced by business in one country and sold in a different one

Product design

The needs of consumers, into a saleable product

Free trade

International trade with no countries e.g. no tariffs, quotas or other restrictions

Legislation

The act of making or enacting laws

National living wage

An hourly rate of pay which is set by the government. All employees above a certain age must receive at least this rate of pay

Trade union

Group of workers who act together to improve the pay and working

Consumer laws

Laws that have been introduced to prevent businesses from treating their customers unfairly.

Contract of employment

A legal document that sets out the terms and conditions governing a worker's job e.g rates of pay, duties, working hours

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Competition

When more than one business is attempting to attract the same customers

Monopoly

A market in which there are many buyers but only one seller.

Diversification

A strategy of increasing sales by introducing new products into new markets