Business Studies Edexcel 9-1 GCSE Theme 1 Definitions

Entrepreneur

Someone who takes risks to set up and run a business.

Enterprise

A business or company, or the willingness to take risks to start one.

Risk

The chance of loss or failure when starting or running a business.

Reward

The benefits, usually financial, gained from a successful business venture.

Business Objective

A target or goal that a business aims to achieve.

Sole Trader

A business owned and controlled by one person.

Partnership

A business owned by two or more people sharing profits and responsibilities.

Private Limited Company

A business owned by shareholders whose shares are not available to the general public.

Public Limited Company

A large business whose shares can be traded freely on the stock market.

Franchise

A business model where a franchisor sells the rights to use its brand to a franchisee.

Unlimited Liability

When the owner is personally responsible for all the debts of a business.

Limited Liability

When shareholders are only liable for the amount they invested in the company.

Shareholders

The owners of a limited company who hold shares in the business.

Social Enterprise

A business that trades with primarily social or environmental objectives.

Market Research

The process of gathering and analyzing data about customers, competitors, and markets.

Primary Research

First-hand research collected directly from customers, such as surveys or interviews.

Secondary Research

Research using data that has already been published by someone else, such as reports or internet sources.

Qualitative Data

Non-numerical data that focuses on opinions, feelings, and attitudes.

Quantitative Data

Numerical data that can be measured and analyzed statistically.

Market Segmentation

Dividing a market into smaller groups of consumers with similar characteristics.

Market Mapping

A tool used to plot competing products and brands on a grid based on two variables.

Competitive Advantage

An advantage that makes a business more attractive to customers than its rivals.

Added Value

The difference between the cost of raw materials and the price customers pay for the finished product.

Gap in the Market

An unfilled customer need or want that a new business can exploit.

Business Plan

A detailed document outlining a business's objectives, strategy, market, and financial forecasts.

Revenue

The total income generated from the sale of goods or services.

Fixed Costs

Costs that do not change with the level of output, such as rent or insurance.

Variable Costs

Costs that change directly with the level of output, such as raw materials.

Total Costs

The sum of all fixed costs and variable costs combined.

Profit

The financial gain when total revenue is greater than total costs.

Loss

When total costs are greater than total revenue.

Break-Even Point

The level of output where total revenue equals total costs, resulting in no profit or loss.

Margin of Safety

The amount by which actual output exceeds the break-even output.

Cash Flow

The movement of money into and out of a business over time.

Cash Flow Forecast

A prediction of future cash inflows and outflows for a business.

Internal Finance

Money raised from within the business, such as retained profit or selling assets.

External Finance

Money raised from outside sources, such as bank loans, overdrafts, or shares.

Overdraft

A facility allowing a business to withdraw more money than it has in its bank account.

Trade Credit

An agreement to buy goods now and pay for them at a later date.

Marketing Mix

The combination of marketing elements used to influence consumers, known as the 4Ps.

Product

The good or service being offered to the market.

Price

The amount a customer pays for a product.

Place

Where and how a product is made available to the consumer.

Promotion

Methods used to communicate with customers and persuade them to buy a product.

Economic Climate

The state of the economy in terms of levels of growth, employment, inflation, and interest rates.

Interest Rates

The cost of borrowing money or the reward for saving money.

Inflation

A general and ongoing rise in the average price level of goods and services.

Exchange Rate

The value of one currency expressed in terms of another.

Legislation

Laws and regulations set by the government that businesses must follow.

Ethics

Moral principles and values that guide a business's decisions and actions.