Edexcel GCSE Business (9-1) Key Terms: 1.4 Making the business effective

Business plan

A plan for the development of a business, giving details such as the products to be made, resources needed, and financial forecasts.

Digital communication

Communicating with customers electronically through things such as a website, social media and email.

e-commerce

The use of online systems to sell goods and services.

Forecast

A prediction of future finances. E.g. Sales, cash flow or profits.

Franchise

The right given by one business to another to sell goods or services using its name.

Franchisee

A business that buys the rights to a franchise.

Franchisor

The person who owns the rights to the franchise.

Limited liability

Where a business and its owners have separate legal identities, meaning shareholders can only lose the original amount they invested into a business.

Location

Where a business locates.

Marketing mix

The elements of marketing that are designed to meet the needs of the customer. The elements are product, price, place and promotion.

Partnership

A business organisation that is usually owned by 2-20 people, who have unlimited liability.

Place

How the product passes from the producer to the consumer.

Price

The amount charged to the customer for the product.

Private limited company (Ltd)

An incorporated business, with Ltd after its name that can sell shares to family and friends. The shareholders have limited liability.

Product

The good or service a business is selling.

Promotion

An attempt to obtain and retain customers by drawing their attention to a business or its products. E.g. Sales promotions, advertising and public relations.

Sole trader

A business with a single owner, who has unlimited liability.

Target market

The segments of the market you are aiming your product at.

Unlimited liability

Where a business and its owners are one and the same, meaning the owners are responsible for all business debts.