GCSE Business 3.1.1 The Purpose and Nature of Businesses Vocabulary Flashcards

50 vocabulary flashcards reviewing key terms and concepts from GCSE Business (AQA 8132) section 3.1.1.

Need

Something essential for survival.

Want

Something desirable but not essential.

Opportunity Cost

The next best alternative given up when a decision is made.

Enterprise

Taking on the risk of organising resources to produce goods/services.

Entrepreneur

A person who sets up a business, taking on financial risk in the hope of making a profit.

Business Plan

A written document detailing how a business idea will be made to work.

Added Value

The difference between the cost of inputs and the price of the finished product.

USP

Unique Selling Point — what makes a product different from competitors.

Primary Sector

Businesses that extract raw materials from the earth.

Secondary Sector

Businesses that manufacture or construct goods, turning raw materials into finished/semi-finished goods.

Tertiary Sector

Businesses that provide services.

Economies of Scale

Cost advantages gained from increasing the scale of production.

Multinational (MNC)

A business with operations in more than one country.

Capital

Man-made resources used in production, such as machinery, tools, buildings, and money invested.

Land

Natural resources, including raw materials and the physical land itself, used in production.

Labour

The workforce, representing the physical and mental effort of workers.

Inputs

The resources consisting of the four factors of production (land, labour, capital, enterprise) transformed during production.

Outputs

The finished goods and services produced by transforming inputs.

Transformation Process

The production process where a business takes inputs and transforms them into outputs.

Branding

Creating a strong, recognisable, trusted brand so customers are willing to pay more for a product.

Quaternary Sector

A knowledge-, information-, or research-based sector (e.g. IT, R&D) that is referred to as an extension of the tertiary sector.

De-industrialisation

The shift of employment from primary to secondary and tertiary sectors in developed economies.

Micro Business

An approximate UK business classification defined as having $<10$ employees.

Small Business

An approximate UK business classification defined as having $<50$ employees.

Medium Business

An approximate UK business classification defined as having $<250$ employees.

Large Business

An approximate UK business classification defined as having $250+$ employees.

Turnover

The total value of output or revenue generated by a business.

Capital Employed

The total value of money invested in the business, calculated as share capital plus loans.

Market Share

The percentage of total market sales that a specific business holds.

Local Business

A business that operates in one small area, such as a village shop.

National Business

A business that operates across one country, such as a UK-wide supermarket chain.

International Business

A business that operates or trades in more than one country.

Infrastructure

Transport links (roads, rail, ports, airports) and broadband access influencing business location decisions.

Proximity to Market

Locating close to customers, which is especially important for service-based businesses.

Proximity to Materials/Suppliers

Locating close to inputs to reduce transport costs, particularly for heavy or perishable materials.

Government Incentives

Financial incentives such as grants or reduced business rates provided to encourage businesses to locate in specific areas like enterprise zones.

Unlimited Liability

A risk for some business types where owners are personally responsible for all business debts.

Aims and Objectives

The section of a business plan detailing what the business wants to achieve.

Market Research / Analysis

The section of a business plan providing evidence of customer demand, competitors, and the target market.

Marketing Plan

The section of a business plan setting out how the product will be priced, promoted, and distributed.

Financial Forecasts

Projections in a business plan including cash flow forecast, forecast profit, start-up costs, and break-even.

Operations Plan

The section of a business plan describing how the product or service will be made or delivered, including location and suppliers.

Personnel / Management

The section of a business plan detailing who runs the business and their relevant skills and experience.

Innovation

Creating something new or improving an existing product or process.

Clustering

Locating a business near competitors or related businesses in the same area.

Added Value Concept Formula

$$\text{Added value} = \text{Selling price} - \text{Cost of bought-in materials/components}$$

Business Risk

Potential negative consequences faced by an entrepreneur, such as losing capital, business failure, stress, and unlimited liability.

Business Reward

Potential positive returns for an entrepreneur, including profit, independence, personal satisfaction, and decision control.

Convenience

A method of adding value by making a product easier to access through location, opening hours, online ordering, or delivery.

Justified Conclusion

A balanced evaluation in 6/9-mark questions that reaches a final verdict using 'it depends on…' factors.