AQA GCSE Business - Business In The Real World

Aim

The intention to reach a goal.

Business plan

A detailed statement of how the business intends to operate, either at start-up or during a given period of time.

Competition

The rivalry between businesses looking to sell their goods/services in the same market.

Cost

The money spent by a business on goods and services.

Customer

Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.

Customer satisfaction

Whether customers are pleased with the goods/services they receive; whether they would purchase again.

Demand

The quantity of a particular product that will be bought at particular price over a specific time.

Directors

The people who are elected by the shareholders to run the business on their behalf.

Diseconomies of scale

When a business grows too large, leading to a possible increase in unit cost.

Dividend

A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.

E-commerce

Business transactions carried out electronically on the internet.

Economies of scale

The cost advantage of producing on a large scale. As output increases the unit cost decreases.

Employees

Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.

Enterprise

The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.

Entrepreneur

A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.

Ethical objectives

A business' goals that relate to fair business practice or moral guidelines and make a positive contribution to the business' reputation.

Ethics

The moral principles that guide how a business operates.

Expansion

The process of increasing a business' size.

Export

Good/service sold to a customer in another country.

External growth

The growth of a business by joining with another by merger or takeover.

Factors of production

The elements that combine in the production process: land, labour, capital and enterprise.

Fixed costs

The costs that stay largely the same, regardless of the business' output.

Franchising

The sale of the rights to use/sell a product by a franchisor to a franchisee.

Gap in the market

An opportunity for a new business (or expansion) which may meet a need that is not being met.

Goods

Items that are produced from raw materials for sale to businesses or consumers.

Growth

A business' increase in size. Methods include: asset value, employees, market share, markets, profits and sales.

Import

Good/service bought from a supplier in another country.

Integration

Two or more businesses join together.

Limited liability

The owners are not responsible for the debts of the business. The limit of their liability for the business' debts is the amount they invested.

Local community

The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.

Location

The site of a business and the reasoning behind the choice of site.

Loss

Where expenditure is greater than income.

Market

Where those wishing to buy goods/services make contact with those who have them to sell.

Market share

The proportion of the whole market for a product that is held by the business.

Mergers

When two or more businesses agree to join together.

Not-for-profit organisations

Associations, charities, co-operatives or voluntary organisations set up to further non-monetary ideals such as cultural, educational, religious and public service.

Objective

A specific statement that defines a precise goal that can be measured and delivered within a given time.

Opportunity cost

The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.

Organic growth

A business grows by increasing its output, by increasing its customer base or by developing new product(s).

Outsourcing

Contracting another business to carry out some of the business' activities, often to reduce costs.

Partnerships

A business that is owned and operated by a group of between 2 or more people.

Primary sector

A business that extracts the earth's natural resources.

Private limited company (ltd)

A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.

Profit

The difference between the money received from the sale of a good/service and the amount it cost; the amount that remains after all the costs have been paid.

Public limited company (plc)

A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.

Revenue

The income generated from the sale of goods/services.

Risk

The possibility that the return on investment will be lower than expected.

Secondary sector

A business that uses raw materials to manufacture goods or construct items.

Service

An action that is carried out to fulfil a need or demand in return for payment.

Share(s)

The units of the business that are available for sale to investors.

Shareholder(s)

Those people who own shares in a limited company; each shareholder is a part owner of the business.

Social objectives

A business' goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers.

Sole traders

A business that is owned and operated by one person.

Stakeholders

Those with an interest in the way that a business operates.

Supplier

A business that provides goods/services.

Survival

The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs.

Takeover

One business takes control of another.

Technical economies of scale

The benefits that large businesses gain from having the funds to invest in expensive machinery that brings cost savings.

Tertiary sector

A business that provides services to consumers or other businesses.

Total costs

All the costs involved in producing goods/services.

Unit cost

The average cost of each unit.

Unlimited liability

When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business' debts if the business' funds were insufficient.

Variable costs

The costs that change as the business' output changes.