theme 1

Entrepreneur

someone who creates a business, taking on financial risks with the aim of making a profit from the business

Obsolete

out of date or not used anymore

E-commerce

using the internet to carry out business transactions

M-Commerce

using mobile technologies, such as smartphones and tablets, to carry out business transactions

Social Media

websites that allow users to interact with other users, by sharing text based messages, pictures or links to online content

Payment platforms

enable businesses to take online payments from customers. They are usually free for the customer to use, but take a small amount of commission from the seller.

Good

Products that may be fresh, such as apples, or manufactured, such as Heinz beans. They are tangible.

Service

Providing useful ways to help people live their lives, for example shops, restaurants and hospitals.

Venture capital

Risk capital provided by an investor willing to take a risk in return for a share in any later profits; the venture capital

Demand

The number of units that customers want - and can afford - to buy

Adapted Products

Finding new products based on the original one, such as Wall's White Chocolate Magnum

Innovation

Ideas that have not been done before

Competitive advantage

A feature of a business that helps it to succeed against rivals

Risk

the possibility that an enterprise will have lower than anticipated profits or experience a loss

Financial reward

the money that an entrepreneur or investor receives when a business succeeds

Market research

the process of gathering information about the market and customers' needs and wants in order to help inform business decisions, including product design and marketing

Cash flow

the amount of money coming in and going out of the business and the timing of this movement.

Sales revenue

the amount of money that comes in from business sales. = Price x quantity sold

Investment

Putting money into a business with the intention of making a profit OR when the business buys assets like new technology

Stakeholder

anyone who has an interest in the activities of a business, such as its workers, its suppliers, its directors, the local community and the government

Ethics

moral principals or standards that guide the behaviour of a person or business

Unique selling point (USP)

Something that makes a product stand out from its competitors --> differentiation

Market Share

the proportion of sales in a market that are taken by one business

Economy

the system by which a country's money and goods are produced and used

Market Research

the process of gathering information about the market and customers' needs and wants in order to help inform business decisions, including product design and marketing

Focus group

a group of people who discuss their views on a product, service, advertisement or idea, either face-to-face or online

Target Market

a particular group of consumers at which a business aims its products and services

Sample

a portion of the population asked for their opinions in order to draw conclusions about the behaviour of the whole population

Segmentation

the process of breaking something up into smaller parts e.g. by age,

SWOT analysis

A study undertaken by a business to identify the strengths and weaknesses, opportunities and threats

Profit

The amount of revenue left over once costs have been deducted = revenue - costs

Social Objective

Likely to be non-financial, such as to reduce the carbon emissions of a business or improve the quality of life for a local community

Viable

Capable of working or succeeding

Break-Even Point

The point where revenue received meets all the costs of the business

Credit

The amount of money that a financial institution or supplier will allow a business to use, which it must pay back in the future at an agreed time

Overheads

Fixed costs that come from running and office. Shop or factory, which are not affected by the number of specific products or services that are sold

Insolvent

A business that is unable to pay its debts and/ or owes more money than it is owed

Trade Credit

A credit arrangement that is offered only to businesses by its suppliers

Overdraft

A facility offered by a bank that allows an account holder to borrow money at short notice

Venture Capital

Money to invest in a business is sources from individuals, or groups of people, who wish to invest their own money into new businesses

Return on Investment

The amount of money that an investor gets back in return for investing in a business

Shareholders

Investors who are part-owners of a company

Share Capital

Money to invest in a business is raised by the business issuing shares that it then sells to those who wish to invest in the company

Retained Profit

Money that a business keeps, rather than paying out to its shareholders

Limited Liability

The level of risk is limited to the amount of money that has been invested in the business or promised as an investment.

Assets

Property such as a house or car

Incorporated

A business that is registered as a company, so the business and the owner are separate in the eyes of the law

Unlimited Liability

The level of risk goes beyond the amount invested, so the personal assets of the business owner can be used to pay off the business's debts.

Unincorporated

A business that is not registered as a company so the owners and the business are the same body in the eyes of the law

Sole Trader

A type of unincorporated business that is owned by just one person

Partnership

A business that is owned by a group of two or more people who share the financial risk, the decision making and the profit

Deed of Partnership

A legal document that defines the terms of the partnership

Private Limited Company

An incorporated business that is owned by shareholders

Shareholders

Investors who are part-owners of a company. They invest in the business 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 name and products in return for a fee and a 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 of the products of an established business

Labour

Workers or the 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

National Living Wage

The minimum amount that a business is legally allowed to pay its employees

E-Commerce

Using the internet to carry out business transactions

M-Commerce

Using mobile technologies such as smartphones and tablets to carry out business transactions

Product Differentiation

Designing a product with some unique features that distinguish it from similar products sold by competitors.

Brand Loyalty

A customers willingness to buy a product from a particular business rather than from its competitors

Market Share

The percentage of the total sales of a product in a market that is taken by one business in that market

Business plan

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

Market Research

the process of gathering information about the market and customers' needs and wants in order to help inform business decisions, including product design and marketing

Target Market

a particular group of consumers at which a business aims its products and services

Revenue

The money that will come into a business from sales

Profit

The amount of revenue left over once costs have been deducted

Cash Flow

the amount of money coming in and going out of the business and the timing of this movement.

Budgets

Pre-set financial targets for a business to achieve, like a sales budget, or abide by, such as an expenditure budget, in a given period of time.

Negative Cash Balance

Occurs if the business's opening balance results in a negative amount at the end of the period, leading to a cash shortage

Overdraft

A facility provided by the bank allowing a current account holder to withdraw more money than there is in the account

Bank Loan

A fixed sum of money lent by a bank to an individual or a business for a specific purpose, which must be repaid with interest in set payments over an agreed period of time.

Why new businesses come about

Technology, changing wants, obsolescence

Examples of risks involved in starting a business ?

failure, financial loss, lack of security

Why do businesses fail?

Cashflow problems caused by unexpected costs, drop in revenue, bad cash management

Examples of rewards

Success, profit, independence

The purposes of business activity

to produce goods and services, to meet customer needs, to add value

How to Add Value

Increase selling price and reduce cost of materials. Branding, convenience, quality and design and USPs can all help to justify increased selling price

What does branding do?

Differentiates, Positions(image for immediate recognition), Adds to the value of the product

Roles of an entrepreneur

has ideas, organises resources, makes decisions, TAKES RISKS

What are the four main customer needs?

price, quality, choice, convenience

quality

Fitness for purpose

What does market research collect information about?

the market, customer needs/wants and competitors

Primary Research

original research conducted for a specific marketing situation

Methods of primary research

Surveys, Interviews, Focus groups, Observations

Advantages of questionnaires

Lower costs, Possibility of anonymity, greater privacy, Lack of interviewer bias

Disadvantages of questionnaires

Must be designed very carefully, Difficult to allow people to expand on their answers.

Advantages of Focus Groups

Can generate fresh ideas, Allow clients to observe their participants, May be directed at understanding a wide variety of issues, Allow fairly easy access to special respondent groups

Disadvantages of Focus Groups

Moderator is key, Not appropriate for making quantitative comparisons of individuals or groups, Like other interviews, not generalizeable, Location, moderator can change results

Advantages of interviews

Offer detailed information, More accurate answers to sensitive questions, Rapport between interviewer and participant makes some topics easier to broach than in other settings

Disadvantages of interviews

cost -Time constraints - takes too long

advantages of observations

Natural so less biased

disadvantages of observations

Bias in the recording of events viewed, can be very time consuming

Secondary Research

past research which has already been performed and often already published

Types of Secondary Research

internal sources e.g past sales data, external sources e.g.government statistics,

types of market research data

quantitative / qualitative