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Entrepreneur
person who takes the risk of starting and running a business enterprise.
Spotting an opportunity
is the ability to see the need for a particular product or service that customers need.
Enterprising characteristics
being determined, creative, ability to take risks, hard working.
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.
Finance
business word to be used instead of 'money'.
Success
for a business can take many forms, including making a profit, surviving and providing a good service to customers.
Markets
are where a business sells its goods and services.
Resources
are the things a business needs to make it work, including finance (money), staff and materials.
Operate
is a term used to explain how a business works.
Aims and objectives
express what a business is trying to achieve, e.g. make more profit.
Limited liability
the responsibility for the debt of a business is limited to the amount invested by a shareholder/ owner.
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.
Sole trader
a business owned by one person.
Partnership
a business owned by between two and 20 partners.
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.
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.
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.
Capital
large sums of money raised to start or develop a business.
Sleeping partner
a partner who invests in a partnership but has no part in the running of the business.
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.
Shareholders
the owners of a private or public limited company.
Dividend
money paid to a shareholder from the profits of a limited company.
Satisficing
making just enough profit to provide the business owner with a decent living. More common in smaller businesses.
Market share
the share of the total market for a product or service and is shown as a percentage.
Business objectives
survival, profit, growth and providing a service.
Profit
the difference between revenue and costs.
Survival
when a business just manages to keep going.
Growth
a business becomes larger, e.g. by opening more stores.
Providing a service
where a business makes sure that the needs of the customer are being met.
Stakeholders
groups or individuals who have an interest in business.
Internal stakeholders
the business owners, employees, managers
External stakeholders
the local community, suppliers, customers and governments.
Stakeholder group
owners, employees, customers, suppliers, government, local community.
Organic growth
growth of a business internally by increasing sales. Sales can be increased in a number of different ways.
Merger
two or more businesses agree to join together.
External growth
growth of a business by takeover or merger.
Takeover
a business takes a controlling interest in another business.
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.
Backwards vertical growth
a business merges with, or takes over a business that SUPPLIES it with goods or services.
Forwards vertical growth
a business merges with or takes over a business that it supplies goods or services to.
Diversification
a business merges with or takes over another business with which there is no connection.
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