BUSINESS DEFINITIONS

Social Objectives

Objectives that focus on ethical factors rather than profit

Limited Liability

When the business owner is only responsible for the original amount of money invested in the business

Social Enterprise

A business that aims to improve human or environmental well-being

Stakeholder

Individuals or groups with an interest in the success or failure of a business

Private limited company

When the shareholders can only lose the money they invest

Public limited company

a type of public company that is allowed to offer its shares to the public & is listed on a stock exchange

Primary sector

The extraction of raw materials from the Earth

Trade bloc

A group of countries that join together to protect themselves from imports from non-member

Globalisation

companies operating internationally across the world

Legalisation

A law put in place to protect individuals or businesses

Profit

The difference between total revenue and total costs

Revenue

Money from the sale of goods and services

Job description

It shows the tasks, duties, roles and responsibilities for a named job

Job share

Two part time employees who share a single job

Person specification

Details of the qualifications, experience in the person appointed

Commission

Payment made to an employee linked to the number of sales made

Fringe benefits

Additional benefits over and above the normal wage or salary

Delegation

The passing of responsibility to a subordinate

Hierarchical structure

A structure with many levels

Span of control

The number of workers controlled by one manager

Crowdfunding

Raising money from many people for a new project via the internet

Overdraft

An agreement to draw more money from a bank account that it has in it

Personal savings

Money that belongs to an individual not a business

Short term finance

Money borrowed that must be paid back within 12 months

Venture Capital

A type of risk capital available to start-up businesses

Insolvency

When a business can no longer meet its debts

Net cash flow

Difference between cash/money coming into the business and the cash/money of the business in a given period of time

Revenue

Price multiple by quantity sold or income from sales

Variable costs

Costs that vary with the level of output

Break-even

When costs are the same as revenue

Fixed costs

Costs that do not vary with the level of output

Profit

Total revenue-total costS

Current liabilities

Debts that the company must pay in the short term

Inventory

the goods a business has for sale

Non-current assets

An investment owned for longer than a year

Liquidity

how easily a business can change its assets into cash

Quantitative data

data that is measured by value and expressed as numbers

Market segment

Part of a market where consumers have similar characteristics

Demographics

A particular section of the population

Brand

A unique name/logo/identity that differentiates a product from other products

Above the line promotion

The use of mass media to promote a large audience

E-tailers

The use of electronic systems to sell goods and services

Price skimming

Setting a high price for a new product and then lowering it later

Product life cycle

Stages a product will pass through from its introduction, through to growth, and then decline

Public relations

Building and maintaining a favourable image of a business for its products

Diseconomies of scale

An increase in average cost per unit due to growth of a business

Economies of scale

When average costs fall as a result of a business increasing in size

Capital intensive production

Production methods that make more use of machinery than labour

Job production

A method of production that involves completing one unit of output at a time

Labour intensive production

A production method that makes more use of labor than machine

Quality control

A product or service that meets the standard set by the business