Business Studies GCSE- KEY TERMINOLOGY

Adding Value

The process of including an innovation or improving the perceived value of a product, in order to raise the price and value of it.

Aims in a business

Small achievements a business wants to reach while starting up, before achieving a larger objective.

Adding Value

The process of including an innovation or improving the perceived value of a product, in order to raise the price and value of it.

Aims in a business

Small achievements a business wants to reach while starting up, before achieving a larger objective.

Apps

Usually used by firms to communicate with customers and provide information about the business. They can also be used to sell products and promote special offers.

Assets

Valuable items owned by the business, or money owed to the business.

Brand Images

The impression that customers have of the firm or the products sold by them. The business may have a reputation for cheaper prices.

Break-even analysis

The level of sales (or output) a firm needs in order to just cover its costs. It can be measured by the number of units a firm needs to sell to break-even.

Business Ideas

The process of creating new and innovative concepts for a business due to the dynamic and ever-changing market.

Business Ownership Structures

Sole traders - A business with just one owner

Partnerships - A business with two or more sole traders

Private Limited Companies (Ltd) - An INCORPORATED business that is owned by shareholders.

Public Limited Companies (PLC) - An INCORPORATED business that is owned by anyone that anyone that invests in the business's shares on the stock market.

Business Plans

An outline of what a business will do in the future, and how it aims to do it. Anyone wanting to start up a business should have a plan.

Cash

The money a company can spend immediately.

Cash flow

The flow of all money into and out of the business. Net cash flow is equivalent to the total cash inflows subtracted by the total cash outflows for a given time.

Closing balances

The amount of money in the bank, at the end of a month.

Command words

The bit of the question that tells you what to do. (e.g give, state, define, identify, calculate, complete, and outline).

Competition

A situtation in which a business if trying to be more successful than another business in the same market.

Consumer laws

The laws restricitng how firms sell their products - the aim is to protect the consumer by giving complete honesty to them. The 'Consumer Rights Act 2015' covers how goods and services can be sold.

Convenience

Making a product/service generally more hassle-free for consumers

Costs

An amount that must be paid or spent by a business. This may be for manufacturing products and paying utilities, for example.

Credit

When a firm gives their customers longer to pay for products.

Crowd funding

When a large number of people contribute money towards starting up a business or funding a business idea.

Customer Needs

What customers want and may pay extra to have. Key examples are convenience, price, quality and customisation.

Demographics

A part of the market that is seperated by identifiable characteristics. E.g Age/Income.

Digital Communication

Conversing with consumers or shareholders through digital means, like emails or websites.

Discrimination

When employees are paid less for the same job or treated worse, laws like the Equality Act 2010 prevent these things happening.

Dividends

The payments that the shareholders get if the company makes a profit. The more shares a shareholder owns, the higher the dividend will be.

E-commerce

Using the internet to buy or sell products. It can be really convenient for consumers to use websites and apps.

Economic Climate

The overall health of the economic systems within which a firm operates. It includes many different economic conditions - like unemployment and taxes.

Emails

A message sent electronically on an 'email' app/website.

Employment Laws

Describes the many different laws associated with the relationship between employers and employees. The laws are generally about pay, recruitment, discrimination and health and safety.

Enterprise

The process of identifying new business opportunities, and then taking advantage of them.

Entrepeneur

Someone who takes on the risks of enterprise activity.

Exchange Rates

An economic condition that tells you how currencies compare in value and price. They're very important for firms that buy from or sell to other countries.

Financial security

To achieve a point where a business can depend on its own revenue to fund its activities.

Fixed costs

The costs that do not chnage with the quantity of output produced.

Focus groups

Where a small group of people (conducted by a business) discuss their attitudes towards a product.

Franchise

Where a company lets another firm sell its products or use its trademarks in return for a fee, for a percentage of the profits.

Gaps in the market

A customer need that isn't being met by other firms.

Globalisation

The process by which businesses and countries around the world become more connected.

Government taxes

Tax rates are set by the government. Changes occur every April 6th and these changes to tax rates can have a big impact on businesses.

Health and safety laws

Legislations that help to make sure that risks to people at work are properly controlled.

Income

The money received by someone, especially on a regular basis, for work or through investments.

Incorporated businesses

A business that has its own legal identity.

Inflation rate

The percentage of increase in the price of goods and services.

Insolvency

When a firm is unable to pay its debts.

Interest Rates

A value which shows the cost of borrowing money or the reward given for saving money.

Legislation

The act of making or enacting laws.

Limited liability

Where the owners of a business are not legally responsible for all the debts a business has.

Live chats

Customers can click a button at any time and have an instant messaging email or voice conversation with a customer service representative

Loans

A long-term source of money that must be paid back to the lender.

Location of a business

The consideration of where is suitable for the place a firm will locate. Some things to think about are where customers are, and where the raw materials needed are.

Loss (Negative Profit)

When the total costs for a business are MORE than the revenue made.

Margins of safety

The gap between current level of output and the break-even level of output.

Market

A place where goods are traded between customers and suppliers, trade in a particular type of product or the potential customers for a product.

Market maps

A diagram showing some of the features of a market.

Market research

Investigation of the features of a market and customer opinions within the market.

Market share

The proportion of total shares within a market that is controlled by a business.

Market size

The number of individuals within a market that are potential buyers and sellers of products, or the total value of products in the market.

Marketing Mix

The four elements that must be considered for good marketing: products, price, promotion, and place.

National Living Wage (NLW)

The minimum amount workers aged 23 and over must be paid - it is slightly more than the national minimum wage (NMW).

National Minimum Wage (NMW)

Workers aged 22 and under have to be paid the NMW - the exact amount depends on the age of the worker and the type of work.

Net cash flow

Total inflows - total outflows

Niche Market

A small and specialised group of potential customers for a product.

Objectives

A measurable step that business will set in order to work towards an aim.

Obsolete

When a product is no longer used, usually because it has become out-dated and has been replaced by something else.

Overdraft

When more money is taken out of a bank account than has been paid into it.

Partnerships

A business ownership structure in which a smaller number of people (usually between 2 or 20) own an unincorporated company.

Pay laws

- National Living wage £7.50 an hour

- Can be fines £20,000 per worker if they don't

- Employees seek to motivate staff

- Pass increase of staff costs to prices

- Some businesses employ younger staff to reduce staff costs

Payment systems

Ways to pay for products:

- Online payments

- Chip and PIN

- Contactless payments

Personal savings

Money that has been saved up by the owners of the business, for funding.

Place (marketing mix)

The method of distribution used to get a product from the company to the customer.

Pressure groups

A type of special interest group which consist of individuals with a common concern who seek to place demands on organisations to act in a particular way or to influence change in their behaviour (e.g. Greenpeace and PETA)

Price (marketing mix)

The price that a customer things is good value for money. (If the perceived value is high but the price is affordable)

Primary Market Research

Market research that involves getting information from customers or potential customers.

Private Limited Companies (LTDs)

A business ownership stucture that is incorporated and has shares, but the shares can only be sold with the agreement of all the shareholders.

Product (marketing mix)

The firm must furst identify customers' needs (or wants). Then it needs to come up with a product that will fulfil some of those needs.

Profits

The difference between revenue and costs over a period of time.

Promotion (marketing mix)

The product must be promoted so that potential customers are aware that it exists and will want to buy it.

Public Limited Companies (PLCs)

A business ownership structure that is incorporated and has shares that can be bought and sold by anyone.

Qualitative data

Information that involves people's feelings or opinions.

Quality and consumer laws

The legislation that products should be up to a certain standard for consumers.

Quantitative data

Information that can be measured or reduced to a number.

Recruitment laws

- must not discriminate (equality act 2010)

- make sure that new workers have legal right to work in the uk

Retained profits

Profits that are put back into the business.

Revenue

The value of all products sold in a given time period.

Reward in a business

The potential for success, profits and security when starting up a business.

Risk in a business

The potential for loss in entrepeneurial ventures.

Salary

A fixed payment that is made to employeed every month.

Secondary research

Market research that involves looking at data from outside the business, e.g market reports.

Segmentation

When people within a market are divided into different groups, in order to promote and advertise to an ideal audience.

Share capital

Money gained through issuing shares in the company.

Shareholders

Someone who owns stock and/or shares in a company.

Shares

A unit of ownership in a company. Owners of shares can share in the profits of the company.

Social media

Websites and applications that enable firms to promote a business and its products.

Sole trader

A business ownership structure where one person owns an unincorporated company.

Stakeholders

Any individual or group of people that is affected by a business.

Start-up capital

Finance needed by an entrepreneur to set up a business

Stock market

A market where shares of public limitied companies (PLCs) can be bought and sold.

Surveys

Collecting information from people, e.g directly over the phone or using questionnaires.

Target market

A set of buyers sharing common needs or characteristics that the company decides to serve.

Tariffs

A tax on goods that are being imported or exported.

Technology

Using the growing internet and development of computers to expand and communicate to customers.