Simple Business Studies Unit 1 Key Terms

Enterprise

Starting new businesses or products.

Entrepreneurs

People who start and grow businesses, taking risks.

Opportunity Cost

What you give up when choosing something else.

Niche Market

A small, targeted part of a market.

Franchise

A business that lets others sell its products/services.

Copyright

Legal protection for creative work.

Patent

Legal protection for inventions (usually 20 years).

Trademark

Protection for brand names, logos, etc.

Tertiary Sector

Businesses that provide services.

Added Value

Making a product worth more.

Business Plan

A document outlining a business idea and how it will work.

Market Research

Gathering information to help marketing.

Primary Research

Collecting new, original data.

Secondary Research

Using existing data.

Random Sample

Everyone has an equal chance of being picked.

Quota Sample

Set number chosen from groups (e.g. age), non-random.

Stratified Sample

Groups chosen specifically (e.g. by age/gender).

Market

A place where buyers and sellers meet.

Market Segmentation

Splitting the market into groups (e.g. age, gender).

Market Size

Total sales volume or value.

Market Growth

Change in sales over time.

Market Share

A firm's share of total market sales.

Unincorporated Business

No legal separation between owner and business.

Incorporated Business

Legally separate from its owners.

Unlimited Liability

Owner responsible for all business debts.

Limited Liability

Owner only loses what they invested.

Sole Trader

One person owns the business.

Partnership

Business owned by 2-20 people.

Private Limited Company (LTD)

Shares sold privately, often to family/friends.

Public Limited Company (PLC)

Shares traded on the stock market.

Bank Loan

Borrowed money from a bank for a set use.

Overdraft

Spending more than is in your bank account (up to a limit).

Venture Capital

Investment in risky businesses (like on Dragons' Den).

Infrastructure

Transport and services that affect business location.

Permanent Employees

Staff with ongoing contracts.

Temporary Employees

Staff with fixed-term contracts.

Zero-Hours Contracts

Work when needed, no guaranteed hours.

Total Revenue

Sales price × number of items sold.

Profit

Revenue minus total costs.

Fixed Costs

Costs that stay the same (e.g. rent).

Variable Costs

Costs that change with output (e.g. materials).

Contribution per Unit

Selling price - variable cost per item.

Break-Even Output

Output level where profit = £0.

Margin of Safety

How much sales can fall before breaking even.

Cash Flow

Money in and out of a business.

Net Cash Flow

Cash inflow - outflow.

Cash Flow Forecast

Estimating future cash in and out.

Budget

A financial plan for the future.