BUSINESS REAL defintions

Scarcity
Economic problem
Business

Lack+ sufficienct products+ fulfil total wants
Unlimited wants + Limited resources + to produce goods or services
to satisfy those wants.
Combines factors of production…

Primary sector
Secondary sector
Teritiary sector

Businesses + business activity+ involves extraction + raw materials
Maufactures goods + using raw materials + from primary sector
Industry provides services + to consumers + other sectors of industry

Partnership

two or more people agree to jointly own a business

Franchise

Uses brand names+ promotional logos + trading methods+ of an existing successful business

Business objectives

Aims + goals

Motivation

Reason + Work hard + work effectively+ for business

Time rate

1 hour of work

Job rotaion

Swapping around + period of time

Teamworking

groups of workers + allocating + tasks and responsibilities

Organisational structure

Refers to + levels of management + division of responsibiliies

Hierarchy
Level of hierarchy

refers to + level of management + from top to bottom
refers to + employees that are given similar level + responsibility

Chain of command

Shows how+ communication and tasks +passed down the business+ top to bottom

mass market

An identifiable + sub group of a much larger market where consumers share similar characteristics or preferences.

Directors

Senior managers + lead a particular department

Line managers

Direct responsibility + people below them in hierarchy of an organisation

Supervisors

Junior managers+ direct control over employees below..

Staff managers

Specialists + provide info and assistance + to line managers

Delegation

giving authority + to subordinate

Job analysis
Job description
Job specification

identifies and records responsibilites and tasks
Outlines responsibilities, duties and tasks to be carried out
Outlines the specific requirments, qualifications.

Part time
Full time

Employment + between 1 and 30-35 hours + week
Employment + 35 hours or more + week

Induction training

Introduction + given to a new employee + explainning businesses actvities, customs and procedures+ allow them to meet fellow workers.

On-the-job-training

Training at the place of work+ watching a more experienced employee

Communication, message
One way communication

Sender to receiver
sender does not expect a feedback

Communication barriers

Factors + stop effective communication + of messages

Marketing

Identifying customer wants and satisfying them profitably

Customer relationship

communicating + encouraging + to become loyal

Market segment

sub group+ larger market+ where consumers share

Market research

Gathering+ analysing+ intepreting info about a market

Market-oriented business
Product oriented business

Carries out market research to find consumer wants before product is developed and produced
Busines whose main focus is on the product itself

Marketing budget

A specific amount of a busines's earning allocated to be spent on marketing
+

for a specific time

Primary research

Is the collection of new, first hand data directly from customers by the business itself

Secondary research

uses + infromation that already has been collected + available for use by others

Questionnaires
Focus group

Set of questions to be answered + as a mean of collecting data
Group of people+representative of the target market

Marketing mix

Four marketing decisions + effective marketing of a product+ price, product. place and promotion

Brand name
Brand image

Unique name + distinguishes it from other brands
Identity of a product+ distinguishes it from other brands

Product life cycle
Extension stratergy

Stages a product passes through + from introduction to decline
It is to keep a product at the maturity stage + extend the cycle

Cost-plus-pricing
Promotional pricing

The cost of manufacturing a product plus a profit mark up
Product sold at lower price + for a short period of time

Price elastic demand

where consumers are very sensitive to changes in price

Distribution channel
Agent

means by which + prodcut is passed from the place of production to the customer
Independent + appointed to deal+ with sales of a product

Promotion (marketing one)

Marketing activity by a business+ raise customer awareness+
of a product or brand+ generate sales

Sales promotion

Incentives+ aimed at customers + to achieve a short time increase in sales

Marketing stratergy

Plan to combine + right combinations of four elements of marketing mix+ to achieve a particular marketing obejctive

Productivity

Output measured against the inputs used to create it

Buffer inventory

Inventory held to deal with uncertainity in the level of customer demand and delivery of suppies

Lean production
Kaizen (production method)
Just in time (production method)

Cut down on waste + increase efficiency
Continuous improvement + through elimination of waste
Involves reducing+ virtuall eliminating the need to hold inventory

Batch production
FLow production

Quantity of one product is made+ quantity of another item will be produced
Large quantities of product are produced in a continuous process

E-commerce

The ‘online’ buying and selling of goods and services using computer systems linked to the internet and apps on mobile phones

Margin of safety

Amount by which sales exceed the break-even point.

Production

Managing resources efficiently to produce goods and services

Quality
Quality control
Quality assurance

Means to produce goods or services+ which meets customer expectations
Checking of goods at the end of produciton process
Checking for quality standards throughout the production process

Start-up capital

Finance needed by a new business to + pay for essential current assets and non current assets + before it can begin operating

Capital expenditure

Money spent on non-current assets + last more than one year

Micro finance
Crowdfunding

Providing small loans+ to poor people + not served by traditional banks
Asking large number of people + for small account of money + to raise finance for a project.

Cash flow
Cash flow forecast
Net cash flows

Cash inflows and cask outflows + over a period of time
prediction of business’s + Cash inflows and cask outflows + over a period of time
Difference between + Cash inflows and cask outflows + over a period of time

Closing cash balance
Opening cash balance

Amount of cash held by the business + at the end of each month
Amount of cash held by the business + at the start of each month

Accounts
Final accounts

Financial record of the firm’s transaction
Produced at the end of financial year and give details of the profit or loss made

Accountants

Professionally qualified people who are responsible for keeping accurate accounts + producing the final accounts

Income statement

Financial statement that records the income of a business and all costs involved to earn that income+ over a period of time.

Revenue
Profit
Profitability

Income of a business during a period of time from the sales of goods or services
Total revenuee of a business less its total costs
Measurement of profit +made realtive to the capital invested in the business

Cost of sales

Cost of producing or buying in goods actually sold by the business during a time period

Trading account

Shows how gross profit is calculated

Depreciation

Fall in the value of a fixed asset over time

Statement of financial position

Shows the value of business’s assets and liabilities at a particular period of time

Assets
Non-current assets
Current assets

Items owned by a business + that have a value
Items owned by business + for more than one year
Items owned by business + and used within a year.

Liabilities
Non-current liabilities
Current liabilities

Debts owned by the business
Long-term+Debts owned by the business+repaid over more than a year
Short term+ Debts owned by the business + Repaid in less than one year

Capital employed

Value of all + long term finance + invested into a business

Liquidity

The ability of a busines to pay back its short-term debts

Illiquid

Means that assets are not easily convertible into cash

GDP
Recession
Economic growth

The total value of output of + goods and services in a country + in one year
When there is a periof of falling GDP
It is when a country’s GDP increases

Inflation

An increase in the average price level of goods and services + over a period of time

Unemployment

Exists when people + who are willing and + able to work + cannot find a job

Balance of payments

Records + the difference between + a couuntry’s exports and imports .

Direct taxes
Disposable income
Indirect taxes

Taxes paid + directly from incomes
Level of income + of a taxpayer + after paying income tax
Added to the prices + of goods services + and taxpayers pay the tax when they purchase this.

Import tariff
Import Quota
Free trade agreement
Protectionism

Tax on an imported product + when they arrive into a country
Physical limit on the quantity + of a product that can be imported
Exist when countries agree to trade wihtout barriers such as quotas and tariffs
When governemnets protects domestic businesses from foreign companies by using tariffs and quotas

Social responsibility

It is when a business decision benefit stakeholders rather than shareholders.

Pressure group

Groups of people who act together to try to

force businesses and governements to adopt certain policies

External costs
External benefits

Costs paid by the rest of society+ other than the business + as a result of business activities
Gains to the rest of the society + other than the business+ as a result of the business activity

Sustainable development

Development which does not put at risk + the living standards of future genrations.

Ethical decisions

Decisions based on + moral code

Globalisation

The process of countries becoming interconnected+ due to trad of goods and services

Multinational businesses

Business with factories, production or service operations + in more than one country

Exchange rate

Price of one currency in terms of another currency

Currency appreciation
Currency depreciation

The currency value rises against another currency
The currecncy value falls against another currency