Business - Unit 1 Glossary

aim

A general goal of a business

business plan

a document setting out a business's future objectives and strategies for achieving them.

business planning

The process of producing a business plan.

company

A business that has its own legal identity. It can own items, owe money, sue and be sued.

Consumers

A person who uses goods and services produced by a business

customer

someone who buys goods or services

Deed of partnership

An agreement between partner that sets out the rules of the partnership

diseconomies of scale

Occurs when the cost per unit increases as a business expands

Dividends

Financial rewards paid out to shareholders each year

e-commerce

the buying or selling of goods and services electronically, usually over the internet

Economies of scale

When a business unit costs of production fall as its output rises and the business expands

Enterprise

Another word for a business. It also refers to the skills of the people involved in the business to identify business opportunities and bring together resources to meet these opportunities

Entrepreneur

Someone willing to take the risks involved in starting a new business

Entrepreneurship

The ability to be an entrepreneur - to take risks and develop a business idea

External growth (Intergration)

Occurs when a business gets bigger by joining or buying other businesses

Fixed cost

Those costs that do not change when a business changes it's output

flotation

Occurs when a private limited company (Ltd) becomes a public limited company (Plc) and has its shares listed on the stock exchange.

Franchise

When a franchisee sells the rights to its products to a franchisee

Franchisee

Buys a franchise usually in return for a fee

Franchiser

Sells a franchise usually in return for a fee

Good

A tangible product

Gross Domestic Product (GDP)

Measures all the income earned in a country's economy in a year

Imports

goods and services purchased from other countries

Inflation

The rate at which prices are increasing

Interest

The money paid by banks as a reward to attract people to save with them

Interest rates

The cost of borrowing money or the reward for saving money

Internal growth (Organic growth)

Occurs when a business grows by selling more of its product

Market Capitalisation

The market capitalisation of a company measures the value of all its shares

Market Capitalisation (formula )

Market price of a share x the number of shares

Market share (equation)

(Sales of a product or business / total market share) x 100

Merger

occurs when two or more organizations combine to become one

Negotiation

When two side discuss what they want to try and reach a solution

non-for-profit organization

Set up to achieve objectives other than profit

Objective

A specific target that is set for a business to achieve

Outsourcing

When a business uses another business to produces for it

Partnership

Occurs when two or more people join together in a business enterprise to pursue profit

Private sector organisations

owned by individuals

Profits

difference between a business's revenues and its expenses

Protectionist measures

Policies that governments use to protect their own businesses against foreign competition.

Public sector organisations

Businesses owned by the government.

Quota

A limit on the number of foreign goods imported into a country

Resources

The inputs that businesses use to provide thier goods or services

Revenue

The income a firm receives from selling its goods or services

Revenue (formula)

number of units sold x unit price

risk

The possibility of something going wrong

Sales per employee (formula)

Sales / number of employees

service

an intangible product

Social enterprise

A business that is set up to help society rather than make a profit

Sole trader

Someone who sets up in business on his or her own

Stakeholder

Individual or groups that are affected by and affect the activities of a business

Stock Exchnage

A market for buying and selling shares of public limited companies.

takeover

an act of taking control of a company by buying most of its shares

Tariff

Tax on foreign goods imported into a country

Total cost

fixed costs plus variable costs

Uncertainty

Occurs where there is a lock of information about a situation

Unlimited liability

The owner is personally and fully responsible for all losses and debts of the business and will pay with personal property if the business is at risk

Variable costs

The costs that vary directly with the business's level of output

What is a shareholder

A person that owns part of a company.