Business Vocabulary

Services

Services are intangible products, such as banking or transport, that are provided by business to customers

Business

A business is an organisation that combines factors of production (goods and services) which satisfy people’s wants.

Goods

Goods are tangible products made by businesses to be sold to customers, such as cards and cloths

Factors of production

Factors of production are those resources needed to produce goods or services. There are four factors of production (land, labour, capital, and enterprise) and they are in limited supply

Captial

Capital is the money invested into a business by the owners

Added value

Added value is the difference between the selling price of a product and the cost of bought-in materials and resources needed to produce it.

Opportunity cost

opportunity cost is the value of the next best alternative given up when choosing one option over another

Primary sector

The primary sector of industry extracts and uses the natural resources from the earth to produce raw material used by other businesses

Secondary Sector

The secondary sector of industry manufactures goods using the raw material provided by the primary sector

Tertiary Sector

the tertiary sector of industry provides goods and services to consumer and the other economic sectors

Private sector

The private sector is the part of the economy owned and operated by individuals, and companies, usually for profit, and is not state/government controlled

Public sector

the public sector is made up of organisations in the economy that are owned by the government

Entrepreneur

An entrepreneur is a person who has an idea for a new business, starts it up and accepts the risks of the new business venture

Business plan

A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts

Business Startups

A newly formed business. They start small, but some might grow to become bigger

Capital employed

Capital employed is the total amount of capital invested in a business for the purpose of generating profits.