Business Fundamentals and Management Flashcards

Vocabulary flashcards covering entrepreneurship concepts, business success factors, management roles, financial terms and calculations, and legal forms of business ownership.

Entrepreneur

Someone who starts and runs their own business.

Business Owner vs. Entrepreneur

A business owner makes a calculated decision to minimise risks and aims to solve their problem, whereas an entrepreneur takes risks and seizes opportunities to impact the world.

Measured Risk

Taking a careful risk where you try to reduce the chance of losing too much.

Innovation

Improving or creating a product to be better.

Initiative

Taking the first step to a series of actions.

Vision Skills

Being able to see the bigger picture and set future goals.

Creative Problem-Solving

An entrepreneurial skill used so they do not give up so quickly and have a way around their problems.

Networking

Building a business off experienced people and meeting potential customers and investors interested in the product.

Three Characteristics of a Successful Entrepreneur

1) Hardworking, 2) Risk-taker, 3) Creative.

Target Market

The chosen audience or customers to sell a product to.

Three Characteristics of a High-Quality Product

1) Durability, 2) Reliability, 3) Well-Designed.

Durability

How well the product is made and how long it can last.

Reliability

How consistently a product works properly when you need it.

Premium Features

Extra or high-quality features that make the product better or advanced, which can also be perceived as superior.

High Performance

When a product works very well and achieves a high level of effectiveness or speed.

Passing Trade

Customers that buy from stores they pass by.

Visibility (Location)

How noticeable the store is to passerbys when choosing a business location.

Accessibility (Location)

Fitting everyone's needs when choosing a business location, such as people with physical disabilities.

Quality Customer Service

Good service provided to customers through a kind attitude and good skills.

Word-of-Mouth Business

Business passed around by people's experience (e.g., friends telling each other about a good coffee spot).

Four Major Management Roles

Planning, Leading, Organising, and Controlling.

Planning

Deciding what the business can achieve and when they can achieve it.

Organising

Arranging things to achieve the business goals.

Leading

Guiding and motivating workers to keep going.

Controlling

Checking if the business has achieved its goal and making any necessary changes if needed.

Financial Management

Responsibly spending money on the right things without regretting when and where you spend it.

Ethical Management

Managing the business in a fair and honest way, considering the effect of decisions towards customers and employees.

Socially Responsible Management

Making decisions that consider the impact on people, community, and the environment.

Financial Transaction

An exchange of money between 2 or more people.

Receipt

Money coming into the business.

Payment

Money going out of the business.

Bookkeeping

Tracking and keeping recordings of all the money being spent and lost throughout the business.

Revenue

The total amount of money a business is making from selling its products or services.

Cost of Goods Sold (COGS)

The cost to the business of making and buying the products to sell.

Operating Expenses

The cost of running the business, such as advertising, rent, and electricity.

Gross Profit

The money left after subtracting the cost of goods sold from revenue ($\text{Gross Profit} = \text{Revenue} - \text{Cost of Goods Sold}$).

Net Profit

The money left after all business expenses have been subtracted from gross profit ($\text{Net Profit} = \text{Gross Profit} - \text{Operating Expenses}$).

Cash Flow

The money coming in or out of a business.

Sole Proprietorship

A business owned and operated by one person.

Unlimited Liability

Being personally responsible for business debts and losses, meaning the owner might have to sell personal items or use personal money to pay them off.

Partnership

A business owned and operated by 2 or more people.

Corporation

A corporation or company owned by shareholders.

Limited Liability

A status where if the business cannot pay its debts, shareholders only lose what they have invested and cannot be forced to sell personal assets.

Private Corporation

A corporation that is usually smaller and unavailable to the public.

Public Corporation

A corporation that is usually larger and can be bought and sold by the public.

Cooperative

A number of people combining together for a particular purpose/response.

Trust

A form of business ownership where a trustee holds assets or property for another person or group.

Franchise

A business arrangement where a big company grants an individual or group permission to run a local branch using its name, products, and operational systems.

Franchisee

The person buying the franchise.

Franchisor

The person granting permission to the franchise.