FBLA Study Guide 2026-27

Business

An organization that produces or sells goods/services to satisfy the needs and wants of consumers for the purpose of making a profit

Needs

Essential for human survival

Wants

Not essential for survival

Real Needs

Basic needs that are tangible (such as food, shelter)

Psychological Needs

Needs that are intangible and emotional (such as companionship, security)

Goods

A tangible product that will be sold, likely for profit

Services

Anything intangible that someone does for a fee, without a tangible good changing hands

Bricks and Mortar

Physical places that customers visit to make purchases

E-commerce

Virtual store, where business is conducted electronically over the Internet, without a store or showroom

SMEs

Small to medium-sized enterprises

Market

Any arrangement that enables buyers and sellers to get information and to do business with each other

Demand

The amount of a good or service that customers are willing to purchase at a particular price

Supply

The amount of a good or service available for consumption

Producer

An individual or business that makes a product

Customer

A person who buys goods and services

Consumer

A person who uses goods and services

Royalty

Compensation for usage of your work

CEO

Chief Executive Officer (the highest ranking person in a company)

Conspicuous Consumption

Purchasing and using luxury goods primarily to display wealth, social status, and prestige to impress others

Peer Pressure

Feeling pressured by friends to make a purchase

Custom

Special holidays or occasions that influence consumer buying

Habit

Formed over time and done repetitively

Sole Proprietorship

A business owned by one person who is entitled to all profits and responsible for all liabilities (unlimited liability)

Partnership

Two or more people share profits and losses according to a partnership agreement

Partnership Agreement

A legal document establishing rules for a partnership and specifying conditions for dissolution

General Partner

Partner with unlimited liability and full management control of the business

Limited Partner

Partner with little/no management involvement whose liability is limited to their investment

Corporation

A business owned by stockholders with limited liability; ownership is divided into shares/stocks

Stockholder

A person who owns a share of a company

Private Corporation

Controlled by a few owners with stock not listed on a public stock exchange

Public Corporation

Shares are available to the public on a stock exchange

Crown Corporation

Operated by the provincial or federal government (e.g., Via Rail, Canada Post, CBC)

Franchise

A business model where the franchiser licenses brand name, procedures, and support to a franchisee

Factors of Production

Resources needed to produce goods/services: Natural Resources, Human Resources, and Capital Resources

Management

Allocates the factors of production to make the business successful

Productivity

The quantity and quality of work performance

Effective

An output measure indicating whether the task was completed or the goal was accomplished

Efficient

An input measure indicating whether task costs were kept to a minimum

Interdependence

Businesses relying on other businesses to help produce goods and services

Economy

The independent system where government and businesses work together to provide goods and services

Economic System

A way of dealing with the selection, production, distribution, and consumption of goods and services

Centrally Planned Economy

Government controls all economic decision-making

Capitalism (Free Market)

A system where businesses are free to own private property and make profit, and consumers have freedom of choice

Mixed Economy

An economic system combining private and public sectors

Public Sector

Government organizations driven to serve the public interest using tax revenues

Private Sector

Individually owned businesses focused on making a profit

Privatization

When public sector organizations are sold to the private sector

GDP

The total market value of all goods and services produced within a country in one year

Inflation

The rate at which prices rise while the purchasing power of money decreases

Purchasing Power

The amount and quality of goods and services that money can buy

Unemployment Rate

The percentage of the labor force that is unemployed

International Business

All business activities needed to create, ship, and sell goods and services across national borders

Domestic Business

Business that takes place entirely within a country's borders

Trade

Allows countries to expand markets and access non-domestic goods and services

Import

Bringing in goods or services from another country

Export

Selling goods or services to another country

Trading Partner

A business or country that develops a commercial relationship with another country

Tariff

A tax imposed by a local government on goods and services coming into a country

Free Trade

Removing tariffs and trade barriers on certain goods traded between countries

USMCA

United States-Mexico-Canada Agreement (free trade agreement replacing NAFTA)

Culture

The sum of a country's way of life, beliefs, and customs

Economies of Scale

The principle where producing more units using the same facilities lowers the per-unit cost

Turnover

Employees leaving a company and being replaced by new workers

Profit

Revenues minus Expenses

Revenue

The total money a business receives from selling its goods/services

Expense

Costs involved in running a business day-to-day

Obsolete

A product replaced by more advanced technology and no longer sold

Capital

The money or wealth needed to produce goods and services or start a business

Financing

Raising capital to fund an organization or venture

Big-Box Retailer

A physically large retail establishment usually part of a chain store

Four Ps of Marketing

Product, Price, Promotion, and Place

Target Market Segmentation

Using demographics (age), geographics (location), and psychographics (lifestyle/values) to identify customers

Product Life Cycle Stages

Introduction, Growth, Maturity, and Decline

AIDA Model

Awareness, Interest, Desire, and Action used to guide customer purchases

Loss Leader Pricing

Selling products at a loss to attract customers into the store

Price Lining

Categorizing products or services based on features and overall value

Price Skimming

Launching a product at a high price for early adopters, then lowering it over time

Accounting Equation

Assets = Liabilities + Equity

Liquidity

A company's ability to convert assets into cash to meet short-term financial obligations

Disposable Income

Money remaining after all mandatory deductions (e.g., taxes, Social Security)

Discretionary Income

Money remaining after paying taxes and essential living expenses

3 Cs of Credit

Character, Capacity, and Capital

401(k)

An employer-sponsored pension plan that offers tax advantages for retirement savings

IRA

An individual retirement account set up personally for tax-advantaged savings

Diversification

Spreading investments across various stocks and assets to reduce overall risk

Functions of Management

Planning, Organizing, Leading, and Controlling

360-Degree Feedback

A performance review method gathering feedback from peers, subordinates, and supervisors

CSR (Corporate Social Responsibility)

A business model where companies integrate social and environmental concerns into operations