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Definitions + Terms
Business plan
An evidence-based explanation of the why, how and what of a business.
Businesses
businesses meet needs/wants, as well as solve problems or is a decision making organization in the process of meeting basic human needs
Consumers
Individuals/groups that buy products/services to satisfy their needs and wants. They drive demand, influence production, and shape market trends in the economy.
Customers
Individuals that buy goods/services from a business. They generate revenue and can influence product development and marketing strategies. Understanding their needs and preferences is crucial for business success.
Entrepreneur
A person who organises human, physical and financial resources to start a business.
Intrapreneur
A person who develops new ideas, processes or products for a business in which they already work.
Needs
Basic necessities that are required for a human to survive. (food, water, shelter, etc)
Primary Sector
A section of an economy that extracts materials (minerals, oil, etc.) or harvests products from the Earth.
Product
An element of the marketing mix related to the good or service designed to satisfy a need or want in a market.
Quarternary Sector
The area of economic activity involved with knowledge and the movement of information.
Secondary Sector
The area of economic activity that produces finished goods through manufacturing.
Sectoral Change
A shift in the economic structure of a place, where the importance of different sectors/industries change over time.
Tertiary Sector
The area of economic activity that provides services.
Wants
Goods/services that are not required for survival but enhance the quality of life and personal satisfaction. (luxury items, entertainment, decor)
Charities
These organizations give assistance, support, and resources to different causes (education, disaster relief, healthcare, etc) and often do fundraising activities and activism.
Cooperatives
A business owned and operated by its members, who share the profits.
Company/Corporation
A business owned by multiple shareholders who have limited liability; can be privately held or publicly held.
Deed of Partnership
A legal document that outlines the terms and conditions of a partnership between 2+ individuals. Specifies each partner’s contributions, roles, profit arrangements, and procedures for resolving disputes or removing partnership.
Incorporation
The process of forming a legal corporation or company, which allows it to operate as a separate legal entity from its owners. Provides limited liability protection, meaning personal assets are protected from business debts and liability.
Initial Public Offering (IPO)
A situation where a company sells all or part of the business to external shareholders for the first time.
Limited Liability
A situation where the owners of a business are not personally responsible for the debts of the business if it fails; the owners and the business are legally separated.
Microfinance
Financial services provided to individuals who have very limited income and assets and are not able to get services from traditional banks.
Non-governmental Organizations (NGOs)
A type of non-profit social enterprise that often operates on a large scale, nationally or internationally. NGOs are not operated by governments, but may receive some funding from governments or cooperate with governments.
Partnerships
A business owned and run by two or more people who share the responsibility for the business and the profits; there is no legal separation between the business and the owners.
Private Limited Company
A business that combines the benefits of limited liability with the flexibility of a partnership. Ownership is divided into shares, but shares cannot be publicly traded.
Private Sector
The portion of an economy not owned or directed by the government.
Public Limited Company
A company where shares can be bought and sold by the public on the stock exchange. Required to publish financial statements and is governed by specific regulations. Shareholders have limited liability, meaning they are only responsible for the company’s debts with the amount they invested.
Public-Private Partnerships (PPP)
An agreement between government entities and private sector companies to fund, build, and operate projects that serve the public. They leverage resources, expertise, and efficiency from both sectors to bring goods and services.
Public Sector
The portion of the economy controlled or owned by the government such as government services, schools and state-owned businesses.
Sole Trader
A business owned and run by one person; there is no legal separation between the owner and the business.
For-Profit Social Enterprise
A type of social enterprise that earns revenue and profits, but integrates social and/or environmental impact directly into its business model.
Non-Profit Social Enterprise
A type of social enterprise that produces goods and services to meet human needs, but where any surpluses earned must, by law, be reinvested back into the business.
State-Owned Enterprises
Business owned and operated by the government. They aim to provide public services, generate revenue, and contribute to the economy.
Stock Exchange
A marketplace where stocks and bonds are bought and sold. Facilitates share trading in publicly listed companies and gives a platform for investors to exchange financial assets and for companies to raise capital.
Unlimited Liability
A situation where the owners of a business are personally responsible for all the debts of the business if it fails; the owners and the business are not legally separated.
The Ansoff Matrix
Helps businesses determine growth strategies by categorizing options into four sections: market penetration, market development, product development, and diversification. Helps to assess risk associated with each stategy and aligns resources for expansion.
Corporate Social Responsibility (CSR)
Businesses actively seeking ways to improve society and the environment through core business activities and business designs.
Ethical Code of Practice
Set of guidelines that helps individuals conduct their business honestly and with integrity. Outlines principles regarding confidentiality, accountability, and stakeholder respect.
Ethics
The moral principles that govern the behaviour of a person or group.
Mission Statement
A short statement that defines what the organisation does, right now, in order to achieve its vision.
Objectives
A stated outcome that a business aims to achieve; can be broadly stated in vision and mission statements, or more narrowly stated with measurable outcomes.
SMART Objectives
'Specific', 'measureable', 'attainable', 'relevant' and 'time-focused' objectives for a business; these can be applied in all the business management functions.
Strategies
A plan that an organisation creates in order to reach a specific goal.
SWOT Analysis
A business management tool that analyses the internal strengths and weaknesses as well as the external opportunities and threats for a business.
Tactics
A small action that a business takes to reach its goals.
Vision Statement
A long term goal, a dream or understanding of what the future should look like.
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