Business Studies Lecture Review Flashcards

Comprehensive vocabulary flashcards covering Nature of Business, Business Management, and Business Planning topics.

Business

A business is an organisation that provides goods or services to make a profit.

Profit

What remains after expenses are deducted from revenue.

Micro Business

A business that employs fewer than $5$ employees ($< 5$ employees).

Small Business

A business that employs between $5$ and $19$ employees ($5\text{--}19$ employees).

Medium Business

A business that employs between $20$ and $199$ employees ($20\text{--}199$ employees).

Large Business

A business that employs more than $200$ employees ($> 200$ employees).

Primary Industry

Industry involved in production from natural resources, such as farming or mining.

Secondary Industry

A secondary industry turns raw materials into finished products.

manufacturing, construction, car production, food processing.

Tertiary Industry

A tertiary industry provides services to people or businesses.

Quaternary Industry

A quaternary industry is a job/business based on knowledge and information.

IT, research, education, data analysis, science and consulting.

Quinary Industry

Services that have traditionally been performed at home, such as cooking, cleaning, and childcare.

Sole Trader

A sole trader is a business owned and run by one person.

Partnership

A partnership is a business owned by two or more people who share the profits, responsibilities, and usually the debts.

Private Company

A private company is a business owned by private shareholders and its shares are not sold to the general public. (Pty Ltd)

Public Company

A public company is a business that can sell shares to the general public.

Privatisation

The process of transferring the ownership of a government business to the private sector.

Monopoly

A market situation where one business dominates the market.

Oligopoly

A market situation where a few large firms dominate the industry.

Monopolistic Competition

A market structure featuring many sellers offering differentiated products.

Stakeholders

Any group or individual who has an interest in or is affected by the activities of a business.

Business Life Cycle

The stages of growth and development a business experiences: Establishment, Growth, Maturity, and Post-Maturity.

Undercapitalization

Occurs when there is a lack of sufficient funds to operate a business normally.

Voluntary Cessation

Occurs when a business owner chooses to stop operating the business due to reasons like retirement or lifestyle change.

Involuntary Cessation

Occurs when a business is forced to stop operating by external factors.

Bankruptcy

A declaration that a business or person with unlimited liability (such as a sole trader or partnership) is unable to pay debts.

Liquidation

The process of winding up and closing a company with limited liability by selling all assets to pay off creditors.

Voluntary Administration

Used when a business in serious financial trouble appoints an independent helper to figure out if it can be saved and keep running.

Receivership

When an independent registered liquidator is appointed by a secured creditor or court to take control of company assets.

Classical Management Approach

A management approach stressing the best way to manage and organize workers to improve productivity, focusing on planning, organizing, controlling, hierarchical structures, and autocratic leadership.

Behavioural Management Approach

A management approach stressing that employees are the main focus of organization, focusing on leading, motivating, communicating, teams, and participative leadership.

Contingency Management Approach

A management approach stressing the need for flexibility and adapting practices to suit changing circumstances.

Quality Control

A reactive quality management approach that inspects finished products for defects.

Quality Assurance

A preventive quality management approach focused on meeting set standards.

Total Quality Management (TQM)

A continuous, whole-business commitment to excellence in quality management.

Equity Finance

Funding obtained internally (retained profits, asset sales) or externally from shareholders.

Debt Finance

Funding obtained through short-term or long-term borrowing that must be repaid.

Cash Flow Statement

A financial report tracking cash inflows and outflows to measure liquidity over a period.

Income Statement

A financial summary showing income earned, expenses incurred, and gross/net profit or loss over a trading period.

Gross Profit

Revenue minus Cost of Goods Sold ($\text{Gross Profit} = \text{Revenue} - \text{COGS}$).

Net Profit

The final remaining profit after deducting all operating expenses from gross profit ($\text{Net Profit} = \text{Gross Profit} - \text{Expenses}$).

Balance Sheet

A financial statement showing assets, liabilities, and owner's equity at a specific point in time ($\text{Assets} = \text{Liabilities} + \text{Owner's Equity}$).

Human Resource Cycle

The staffing process comprising four stages: Acquisition, Development, Maintenance, and Separation.

Research and Development (R&D)

A set of activities intended to develop new ideas and improvements in production processes and products.

SWOT Analysis

A situational analysis tool evaluating internal Strengths and Weaknesses alongside external Opportunities and Threats.

Vision Statement

A broad statement defining what the business wants to become in the future.

Total Revenue

The total money earned from sales, calculated as $\text{Total Revenue} = \text{Price} \times \text{Quantity Sold}$.

Total Cost

The sum of all fixed costs and variable costs incurred by a business ($\text{Total Cost} = \text{Fixed Costs} + \text{Variable Costs}$).

Break-Even Analysis

A financial forecasting calculation defined as $\text{Break-Even Point} = \text{Fixed Costs} \text{ / } (\text{Sales Price per Unit} - \text{Variable Cost per Unit})$.

Over-extension

A major cause of business financial risk resulting from overspending on stock, staff, or debt beyond capacity.