Unit 1 - Business Activity and Influences on Business

business

an organisation that produces goods and services

organisation

a group such as a club or business that has formed for a particular purpose

goods

physical products, such as a mobile phone, a packet of crisps or a pair of shoes

services

non-physical products, such as banking, car washing and waste disposal

output

amount of goods or work produced by a person, machine or factory

human resources

in some businesses, the department that deals with employing, training and helping people

premises

buildings and land used by a shop or business

consumer goods

goods and services sold to ordinary people (consumers) rather than businesses (e.g. handbag, computer game, healthcare, air travel)

producer goods

goods and services produced by one business for another (e.g. office furniture, delivery van, insurance, market research

needs

basic requirements for human survival

wants

people's desires for goods and services.

infinite

without limits in space or time

finite

having an end or a limit

scarce

resources with limited availability

private sector

business organisations owned by individuals or groups of individuals

public sector

business organisations owned by central or local government

stakeholder

an individual or group with an interest in the operation of a business (customers, employees, managers, financiers, suppliers, local community, government, owners)

entrepreneur

person who takes risks and sets up businesses; individual who organises the other factors of production and risks their own money in a business venture

EBITDA

earnings before interest, tax(es), depreciation and amortisation

objectives

goals or targets set by a business

financial objectives

Targets expressed in money terms such as making a profit, earning income or building wealth (e.g. survival, profit, sales, increase market share, financial security)

SMART goal

goals that are specific, measurable, achievable, realistic, and time specific

executives

managers in an organisation or company who help make important decisions

diversify

if a business, company or country diversifies, it increases the range of goods or services it produces

financial return

the money made or lost on an investment over some period of time

profit maximisation

making as much profit as possible in a given time period

shareholders

owners of limited companies

dividends

the share of the profits paid to shareholders as a return for investing in the company

profit satisficing

making enough profit to satisfy the needs of the business owner(s)

automation

the use of computers and machines instead of people to do a job

economies of scale

financial advantages (falling average costs) of producing something in very large quantities

large business

a business that employs more than 250 people

small business

a business that employs fewer than 50 people

revenue

money from the sale of goods and services

innovator

someone who introduces changes and new ideas

labour

people employed in a business/used in production

unincorporated

businesses where there is no legal difference between the owner and the business

incorporated

business that has a separate legal identity from that of its owners

sole trader

a business owned by a single person

unlimited liability

owner of a business is personally liable for all business debts

partnership

a business owned by between 2 and 20 people

deed of partnership

A binding legal document that states the formal rights of partners

limited partnership

A partnership where some partners contribute capital and enjoy a share of the profit but do not take part in the running of the business.

limited liability

business owner is only liable for the original amount of money invested in the business

audits

official examination of a company's financial records in order to check that they are correct.

franchise

structure in which a business (the franchisor) allows another operator (the franchisee) to trade under their name

merchandise

goods for sale

social enterprise

business that aims to improve human or environmental well-being, charities for example

cooperative

company, factory or organisation in which all the people working there own an equal share of it

consumer cooperative

cooperative that is owned by its customers

retail cooperative

cooperative of retail members, who often work together to assert their purchasing power.

worker cooperative

cooperative that is owned by its employees

charities

organisations that give money, goods or help to people who are poor, sick or in need

venture capitalists

specialist investors (individuals or companies) who provide money for business purposes, often to new businesses

limited companies

business organisations that have a separate legal identity from that of their owners.

chairperson

someone who is in charge of a meeting or directs the work of a committee or organization

certificate of incorporation

document needed before a new company can start doing business.

private limited company

A business owned by shareholders with limited liability but whose shares cannot be bought by or sold to the general public.

stock market

A market for shares in public limited companies.

advantages of private limited companies

- Shareholders have limited liability

- More capital can be raised

- Control cannot be lost to outsiders

- Business continues if a shareholder dies

- Has more status

public limited company

a limited company, often a large business, with the legal right to sell shares to the general public - share prices are quoted on the national stock exchange

prospectus

document produced by a company that wants the public to buy its shares

regulatory control

official power to control an activity and make sure it is done in a satisfactory way

flotation

the process of a company 'going public'

multinational company

large business with significant production or service operations in at least two different countries

issue (shares)

the sale of new shares

productivity

rate at which goods are produced, especially in relation to the work, time and money needed to produce them

public corporations

business organisations owned and controlled by the state/government.

portfolio

collection of business interests or products

infrastructure

the basic systems and structures that a country or organization needs in order to work properly, for example roads, railways, banks etc.

natural monopoly

market where it is more efficient to have just one organisation meeting total market demand

subsidise

paying part of the costs (often by the government in business)

privatisation

the transfer of public sector resources to the private sector

primary sector

production involving the extraction of raw materials from the earth

secondary sector

production involving the conversion of raw materials into finished and semi-finished goods.

assembly plant

factory where parts are put together to make a finished product

tertiary sector

the production of services in the economy

de-industrialisation

the decline in manufacturing

interdependence

all of the different sectors depending on each other within a business

brownfield sites

areas of land that were once used for urban development

greenfield sites

previously undeveloped areas of land, usually on the outskirts of towns and cities.

assisted areas

areas that are designated by a government as having economic problems and are targeted to receive support in a variety of forms.

viability studies

careful study of how a planned activity will work, how much it will cost, and what income it is likely to produce

trade bloc

A group of countries situated in the same region that join together and enjoy trade free of barriers

emerging economies

rapidly growing economies (for example, Brazil) — emerging economies have huge growth potential but also pose significant risks

globalisation

The growing integration of the world's economies

intellectual property

people's knowledge or creative ideas that have commercial value and are protectable under different forms of copyright

monetary system

system of money in a particular country or the world as a whole, and the way that it is controlled by governments and central banks

saturate (market)

to offer so much of a product for sale that there is more than people want to buy

predator

business that tries to use another's weakness to get advantages

hostile takeover

takeover that the company being taken over does not want or agree to

bid

offer to pay a particular price for something (e.g. a business)

commodities

products that are bought and sold

patents

legal documents giving a person or company the right to make or sell a new invention, product, or method of doing something and stating that no other person or company is allowed to do this

ventures

a new business activity that involves taking risks

currency reserves

money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign debts

human capital

people and their skills

enterprise

the activity of starting and running a business

exploitation

a situation in which you treat someone unfairly by asking them to do things for you, but give them very little in return

repatriation (of profit)

Where a multinational returns the profits from a overseas venture to the country where it is based, typically from a developing country to a developed country