nature of business

Topic 1

Business

The organized effort of individuals to produce and sell products for a profit.

Good

A tangible, physical product.

Service

An intangible product that is done for you by others.

Finished products

Products that are ready for customers to purchase and use.

Revenue

Total money earned from sales of products.

Profit

Total earnings for the business after deducting production costs from revenue.

Wealth Creation

Accumulation of assets (especially income-generating ones) over time.

Employment

The state of having paid work.

Income

Money earned by employees for their work for the business.

Choice

Range of possibilities in product features, quality, and price.

Innovation

A new method or idea.

Entrepreneurship

Individuals who start and operate their own businesses.

Quality of life

The standard of health, comfort, and happiness.

Small

Size classification of a business with 0-19 employees.

Medium

Size classification of a business with 20-199 employees.

Large

Size classification of a business with 200+ employees.

Local

Geographical spread classification of a business that serves the surrounding area.

National

Geographical spread classification of a business that operates within one country.

Global

Geographical spread classification of a large business with a home base in one country that operates in other countries.

Primary

Industry classification involving the production of natural resources and raw materials.

Secondary

Industry classification involving the transformation of raw materials into products.

Tertiary

Industry classification involving the provision of services for other people.

Quaternary

Industry classification involving services that transfer and process information.

Quinary

Industry classification involving services that used to be performed in the home.

Sole Trader

Legal structure of a business with one individual running it.

Partnership

Legal structure of a business with a group of people running it and distributing income or losses between themselves.

Private Company

Legal structure of a business with private shareholders who put money into the business in exchange for ownership.

Public Company

Legal structure of a business with shares offered to the public.

Liability

Legal responsibility, either unlimited or limited.

Unlimited Liability

Legal responsibility where the business and the owner are the same legal entity.

Limited Liability

Legal responsibility where the business is legally separate from the owner.

Economic

External influence on businesses related to economic cycles and level of economic activity.

Financial

External influence on businesses related to how they get money.

Geographic

External influence on businesses related to human and physical geography.

Social

External influence on businesses related to changes in tastes, fashion, and culture.

Legal

External influence on businesses related to basic rules and legal obligations.

Political

External influence on businesses related to government policies and decisions.

Institutional

External influence on businesses related to regulations imposed by institutions.

Technological

External influence on businesses related to advances in technology.

Competitive situation

External influence on businesses related to competition and market dynamics.

Markets

External influence on businesses related to different types of markets.

Products

Internal influence on businesses related to the types and range of goods and services produced.

Location

Internal influence on businesses related to where the business is set up.

Resources

Internal influence on businesses related to human, information, physical, and financial resources.

Management

Internal influence on businesses related to the decisions and actions of managers.

Business Culture

Internal influence on businesses related to the ideas, values, and beliefs shared by the business.

Stakeholders

Individuals or groups interested in or affected by the business.

Dividend

Payment of a portion of a business's profits to its shareholders.