business

theme 1

supplier

A business which sells/supplies products to another business

customer

person (or organisation) which buys a product or service.

consumer

The person that consumes the product or service.

markets

Where buyers and sellers meet to exchange goods or services

customer needs

The wants and desires of buyers of a product or the customers of a business

market research

gaining data about customers, competitors and market trends through collecting primary and secondary data

primary research

The gathering of new information - primary data, which has not been previously collected

survey

Research involving asking questions of people and/or organisations - usually primary research

respondents

Those who provide data for a survey usually by answering questions in a questionnaire or interview.

questionnaire.

A list of questions to be answered by respondents, designed to gather information about consumers’ tastes.

focus group

In market research, a group of people brought together to answer questions and discuss a product, brand or issue.

secondary research

information that has already been gathered such as sales records, governments statistics, newspaper articles or reports from market research groups.

quantitative data

Data that can be expressed as numbers and can be statistically analysed.

qualitative data

Information about opinions, judgements and attitudes.

market segment

Part of the market which contains a group of buyers with similar buying habits, such as age or income.

price sensitive

When the price is very important in the decision about whether or not to buy.

market map

A diagram that shows the range of possible positions for two features of a product e.g. Low to high price & low to high quality. It will also show gaps in the market

gap in market

when no business is currently serving the needs of customers for a particular product.

product range

A group of similar products made by the same business

brand

A named product which customers see as being different from other products and which they can associate or identify with.

brand image

The impression that customer have in their minds about a brand.

added value

The increase worth that a business creates for a product – it is the difference between what a business pays its suppliers and the price that it is able to charge for the product/ service.

USP

A characteristic of a product that makes different from other similar products on the market e.g. Design, quality, packaging, opening hours, speed of delivery, price etc

franchise

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

franchisee

A business that agrees to make, sell or distribute a produce under licence from a franchisor

franchisor

The business that gives its permission to another to make, sell or distribute its goods or services

entrepreneur

A person who owns and runs their own business and takes risks.

enterprises

Another word for businesses

enterprise

The willingness by an individual or a business to take risks, show initiative and undertake new ventures.

risk

The chance of damage or loss occurring as a result of making a decision.

goods

tangible products

services

intangible products

thinking creatively

Coming up with new and unique ideas

competitive adv

An advantage that a business has to enable it to perform better than its rivals in the market and which is both distinctive and defensible

deliberate creativity

intentional creation of new ideas through recognised and existing techniques.

lateral thinking

Thinking differently to try and find new and unexpected ideas

blue sky thinking

creative thinking where participants are encouraged to think of as many ideas as possible about an issue

innovation

process of transforming inventions into products that can be sold to customers.

invention

The discovery of a new process and potentially new products, typically after a period of research.

patent

Right of ownership of an invention or process when it is registered with the government.

copyright

Legal ownership of material such as books, music and films which prevents these being copied by others

trademark

The symbol, sign or other features of a product or business that can be protected in law.

calculated risk

The probability of a negative event occurring

downside

disadvantages of doing a course of action

upside

advantages of a course of action

driven

being very motivated.

mindmap

a diagram that is used to record words and ideas connected to a central word or idea.

financial objectives

To make a profit, to break-even, to earn a % of profit, to build financial wealth

non financial obj

Personal satisfaction, enjoyment, fulfilling a dream, risk taking and challenge, being independent, actually owning the busines

revenue, sales rev, sales turnover

The amount of income received from selling products or services over a period of time.

sales volume

number of items or products or services sold by a business over a period of time.

fixed cost

Costs which do not vary with the output produced e.g. Rent, Business rates, yearly salaries, advertising

variable costs

Costs which change directly with the number of products made by a business such as the cost of buying raw materials.

semi variable costs

Costs which include both a fixed cost element and a variable cost element e.g. Electricity (

total costs

All the costs of a business – it is equal to fixed costs plus variable costs.

profit

when the revenues of a business are greater than its costs over a period of time.

loss

when the revenues of a business are less than its costs over a period of time.

cash flow

The flow of cash into and out of the business.

inflow

The cash flowing into a business,

outflow

The cash flowing out of a business

net cash flow

The receipts of a business minus its outflows

insolvency

When a business can no longer pay its debts

cash flow forecast

A prediction of how cash flow will flow through a business in a period of time in the future.

opening balance

The amount of money a business has at the beginning of the month

closing balance

The amount of money a business has at the end of the month

cumulative cash flow

The sum of cash that flows into a business over a longer period of time

trade credit

Where a supplier gives their customer a period of time to pay a bill

stocks

Materials that the business holds

business plan

A plan for the development of a business giving forecasts of items such as sales, costs and cash flow.

long term finance

Source of money for businesses that are borrowed or invested typically for more than a year.

short term finance

Source of money for businesses that may have to be repaid either immediately or fairly quickly, such as an overdraft, usually within a year.

share

A part ownership in a business

personal savings

Money that has been set aside and not spent by individuals and households.

share capital

The monetary value of a company which belongs to its shareholders

shareholders

owners of a company.

venture capitalists

An individual or company who buys shares in what they hope will be a fast growing company with a long-term view of selling the shares at a profit.

loan

Borrowing a sum of money which has to be repaid with interest over a period of time

dividend

A share of the company's profits received by the shareholders

retained profit

Profit kept back by a business for the future or for future investment

leasing

Renting premises or equipment.

overdraft facility

Borrowing from a bank for a short term.

factoring

source of finance. A business sells its debts to a factoring company for immediate payment rather than wait

marketing mix

The combination of (4 P's) which help the business to take into account customer needs when selling a product

price

The amount of money customers give up to acquire a product.

product

A good or service produced by a business or organisation and made available to customers for consumption.

place

The way in which a product is distributed

promotion

making the customer aware that the product is for sale, telling them what is the product, making customers aware of how the product will meet the customers’ needs and persuading them to buy it for the first time or again.

sole trader

only owner of a business which has unlimited liability.

unlimited liability

legal obligation that owner of a business to pay off all the debts of the business. Can take assets to pay

limited liability

When shareholders of a company are not personally liable for the debts of the company. can only lose value of investments

companies

Businesses whose shareholders have limited liability.

customer service

experience that a customer receives when dealing with a business

customer satisfaction

A measure of how much products meet customers’ expectations.

repeat purchases

Orders or sales that occur from customers who have bought the good or service in the past.

job applicant

A person who shows interest in a job vacancy

job description

A document that describes all the requirements of the job -

person specification

A document describing the type of person wanted -

application form

A document used by a business for all its job applicants with all details it wants about the applicant

commodities

raw materials

commodity markets

Where buyers and sellers of commodities meet to exchange commodities