gcse business - unit 1 (business activity)

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41 Terms

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Entrepreneur

person who takes the risk of starting and running a business enterprise.

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Spotting an opportunity

is the ability to see the need for a particular product or service that customers need.

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Enterprising characteristics

being determined, creative, ability to take risks, hard working.

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Business plan

document providing details on the product/ service to be sold, finance e.g. to start the business, marketing, and market research to prove there is demand for the product/ service.

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Finance

business word to be used instead of 'money'.

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Success

for a business can take many forms, including making a profit, surviving and providing a good service to customers.

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Markets

are where a business sells its goods and services.

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Resources

are the things a business needs to make it work, including finance (money), staff and materials.

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Operate

is a term used to explain how a business works.

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Aims and objectives

express what a business is trying to achieve, e.g. make more profit.

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Limited liability

the responsibility for the debt of a business is limited to the amount invested by a shareholder/ owner.

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Unlimited liability

the responsibility for all the debts of a business rests with the owners of the business. A feature of sole traders and partnerships.

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Sole trader

a business owned by one person.

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Partnership

a business owned by between two and 20 partners.

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Private limited company

often (but not always) a smaller business. Owned by at least two shareholders. Shares cannot be sold to the general public. Has Ltd after its name.

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Public limited company

a large business, where shares can be sold to the general public enabling vast sums of money to be raised to develop the company. Has plc after its name.

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Deed of partnership

a document setting out the operations of the partnership, including amount of capital to be invested and how profits will be shared.

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Capital

large sums of money raised to start or develop a business.

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Sleeping partner

a partner who invests in a partnership but has no part in the running of the business.

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Limited liability partnerships

part partnership part limited company. Owners are members, not partners. They have limited liability and have to make their finances available to the public.

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Shareholders

the owners of a private or public limited company.

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Dividend

money paid to a shareholder from the profits of a limited company.

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Satisficing

making just enough profit to provide the business owner with a decent living. More common in smaller businesses.

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Market share

the share of the total market for a product or service and is shown as a percentage.

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Business objectives

survival, profit, growth and providing a service.

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Profit

the difference between revenue and costs.

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Survival

when a business just manages to keep going.

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Growth

a business becomes larger, e.g. by opening more stores.

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Providing a service

where a business makes sure that the needs of the customer are being met.

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Stakeholders

groups or individuals who have an interest in business.

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Internal stakeholders

the business owners, employees, managers

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External stakeholders

the local community, suppliers, customers and governments.

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Stakeholder group

owners, employees, customers, suppliers, government, local community.

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Organic growth

growth of a business internally by increasing sales. Sales can be increased in a number of different ways.

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Merger

two or more businesses agree to join together.

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External growth

growth of a business by takeover or merger.

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Takeover

a business takes a controlling interest in another business.

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Horizontal growth

a merger or takeover where two businesses are involved in a similar operation, e.g two electrical producers or two shops selling fashion clothing.

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Backwards vertical growth

a business merges with, or takes over a business that SUPPLIES it with goods or services.

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Forwards vertical growth

a business merges with or takes over a business that it supplies goods or services to.

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Diversification

a business merges with or takes over another business with which there is no connection.