Business Vocabulary (Unit 1)

Non-profit social enterprise

Non-profit social enterprise

a social enterprise which aims to make enough money to achieve their goals. This is slightly different to making a profit, as all money generated is channeled towards achieving the social rather than goal

Non-governmental organization (NGO)

an organization which is independent of the government, though they often receive funding and cooperate with the government. They are non-profit and have a humanitarian or social purpose.

Charity

an organization which is a type of NGO with an aim specifically defined as charitable by the government (e.g. preventing or relieving poverty), and is exclusively for public benefit.

Mission statement

"what the company is there to do" - used by an organization to explain, in simple terms, its reason for being. It is usually one sentence or a short paragraph explaining a company's culture, values, and ethics.

Vision statement

"what the company aspires to be" - describes what a company wants to achieve in the medium to long term, generally in a time frame of 5 to 10 years, although it can be longer. It presents a vision of what the company will look like in the future and its goals to aim for.

Goods

physically tangible items (sometimes called 'visibles'). E.g. cars, groceries, furniture

Start up

a new business

Entrepreneur

a person who takes the risk of starting a new business venture

Limited liability

when there is no distinction between the business and the owner in the government's eyes, therefore the owner's personal assets are counted as part of the business.

For profit social enterprise

a social enterprise which aims to make a profit. However, it has a social purpose and its drive for profit does not take priority over their social goals.

Services

non physically tangible items (sometimes called 'invisibles') E.g. financial aid, haircutting

Products

both goods and services, anything a business might sell

Strategic objectives

outline long-term and broad goals the organization has to achieve their mission statement.

Tactical objectives

short term steps and actions the organization needs to take in order to achieve the goals described in the strategic plan.

Corporate responsibility (CSR)

the practices and policies undertaken by corporations that are intended to have a positive influence on the world; corporations pursue prosocial objectives in addition to maximizing profits; helps a company be socially responsible to itself, its shareholders, and the public.

Stakeholder

a person or organization that affects or is affected by a business. Stakeholders are usually classified as internal vs. external, market vs. non-market, or primary vs. secondary

Mutual benefit

when stakeholders share many common interests (eg. making profit means higher dividends for shareholders, higher wages, business expansion...)

Production capacity

the volume of products that can be generated by a business enterprise in a given period of time using current resources

Revenue streams

the different sources of income that a firm may have. Often, as firms grow, they attempt to diversify revenue streams, to find sales growth in saturated markets or to offset risk (if sales revenue from one revenue stream declines, perhaps it can be offset by sales growth in another revenue stream).

Brand

the set of expectations, memories, stories and relationships that, taken together, account for a consumer's decision to choose one product or service over another.

Profit margins

the percentage of sales that an organization can turn into profits

Economies of scale

the reduction of per-unit production costs as a business grows - the larger the business the more potential savings it can benefit from.

Diseconomies of scale

increase in per-unit cost as a business grows.

Internal growth

occurs when a business expands using its own resources and skills to open new stores, create new products, or increase sales.

External growth

occurs when a business expands by relying on external factors, typically through a relationship with another business.

Multinational company (MNC)

a business that either operates in or is legally registered in more than one country. Typically MNCs are large organizations, but any business, no matter the size, which operates in more than one country is an MNC. Smaller businesses in this category are often called mini MNCs.