Year 10 GCSE Business Terminology unit 1-3

Practice flashcards for GCSE Business 8132, covering key terminology from Units 1-3 of the AQA specification based on the provided lecture notes.

Aim

The intention to reach a goal.

Enterprise

The ability to identify business ideas and opportunities to bring them to fruition and to take risks where appropriate.

Entrepreneur

A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.

Business plan

A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.

Objective

A specific statement that defines a precise goal that can be measured and delivered within a given time.

Unlimited liability

When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business’ debts if the business’ funds were insufficient.

Limited liability

The owners are not responsible for the debts of the business. The limit of their liability for the business’ debts is the amount they invested.

Sole traders

A business that is owned and operated by one person.

Partnerships

A business that is owned and operated by a group of between 2 or more people.

Private limited company (ltd)

A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability.

Public limited company (plc)

A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability.

Not-for-profit organisations

Associations, charities, co-operatives or voluntary organisations set up to further non-monetary ideals such as cultural, educational, religious and public service. Profits/losses are retained/absorbed.

Expansion

The process of increasing a business’ size.

Organic growth

A business grows by increasing its output, by increasing its customer base or by developing new product(s).

External growth / Integration

The growth of a business by joining with another by merger or takeover.

Merger

When two or more businesses agree to join together.

Takeover

One business takes control of another.

Gap in the market

An opportunity for a new business (or expansion) which may meet a need that is not being met, or a group of potential customers who are not yet purchasing a particular good/service.

Primary industry

A business that extracts the earth's natural resources.

Secondary industry

A business that uses raw materials to manufacture goods or construct items.

Tertiary industry

A business that provides services to consumers or other businesses.

Factors of production

The elements that combine in the production process: land, labour, capital and enterprise.

Globalisation

The trend for large businesses to operate on a worldwide scale; money, goods and services can be transferred across national borders.

Goods

Items that are produced from raw materials for sale to businesses or consumers.

Survival

The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs.

Growth

A business’ increase in size. Methods include: asset value, employees, market share, markets, profits and sales.

Wants

Things that people would like to have; not limited to the things they need to survive.

Air pollution

The presence or introduction of harmful substances into the air causing disease, allergies or damage to humans, animals, plants or the built environment.

Noise pollution

A type and level of noise that is excessive and disturbing to people or animals.

Global warming

The steady increase in the earth’s temperature due to emissions and the build-up of greenhouse gases, resulting in climate changes.

Sustainability

The process of operating without damaging the environment or depleting natural resources.

Ethics

The moral principles that guide how a business operates.

Ethical objectives

A business’ goals that relate to fair business practice or moral guidelines and make a positive contribution to the business’ reputation.

Social objectives

A business’ goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers.

Consumer law

Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly.

Employment law

Rulings that relate to the rights and responsibilities of people who work for a business; they affect the recruitment and selection process and how the business deals with its workers.

Equality Act (2010)

Protects people from discrimination in the workplace and in wider society. It sets out the different ways in which it is unlawful to treat someone.

Health and Safety at Work Act (1974)

Sets out the duties and responsibilities of both employers and employees for health and safety in the workplace.

Traffic congestion

The effects of overuse of transport networks, for example slower speeds, traffic queues and longer journey times.

Exchange rates

The price of one currency based on another or the cost of buying one currency from another, for example £1 = $1.21.

Waste

The unwanted material left over from the production process; it may have little or no value and the business may have to pay for its disposal.

Disposal of waste

The removal, storage or destruction of unwanted material. Methods include recycling, burning and landfill sites.

Recycling

The conversion of waste into reusable material.

Local community

The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.

Location

The site of a business and the reasoning behind the choice of site.

Proximity to market

Businesses that serve their customers directly must be located close to those customers.

E-commerce

Business transactions carried out electronically on the internet.

M-commerce

Business transactions are carried out electronically by mobile phone.

Export

Good/service sold to a customer in another country.

Import

Good/service bought from a supplier in another country.

Interest rates

The rate charged for borrowing money over a period of time, or the reward for saving money.

Level of employment

The percentage of the population of working age that are employed.

National minimum wage/living wage

The lowest hourly rate that can legally be paid by an employer to an employee.

Stakeholders

Those with an interest in the way that a business operates.

Trade descriptions

Protecting customers from false or misleading descriptions about products or their prices.

Buffer stock

A stock of raw materials held in reserve to protect the production process from unforeseen shortages.

Just in time (JIT)

Organising the ordering of raw materials and components to be delivered just before they will be used, reducing the need for storage.

Just in case (JIC)

Organising procurement to ensure that the production process never runs out of stock, reducing the number of sales lost due to insufficient raw materials.

Flow production

Using a production line to make goods continuously and in large numbers.

Lean production

Continually working to reduce the resources used to create products: raw materials, labour, machines and premises.

Total quality management (TQM)

A philosophy that involves everyone in the business in the quest for continual improvement in the attitudes, practices, structures and systems that combine to create a top-quality product.

Procurement

The process of buying goods and services including dealing with: demand, selection of suppliers, analysing and negotiating prices, making the purchase, managing payments.

Customer satisfaction

Whether customers are pleased with the goods/services they receive; whether they would purchase again.

Diseconomies of scale

When a business grows too large, leading to a possible increase in unit cost.

Economies of scale

The cost advantage of producing on a large scale. As output increases the unit cost decreases.

Inspection

Testing/examining items to check that materials or items conform to the specified requirements/standards.

Job production

A method of creating a single product to meet an individual order.

Logistics

Managing the movement of supplies and products to ensure the timely delivery of supplies to the production process and finished products to customers.

Supply chain

The network of organisations, people, activities, information and resources that take the product/service from supplier to customer.

Outsourcing

Contracting another business to carry out some of the business’ activities, often to reduce costs.

Productivity

The amount produced by a worker/machine/factory in a given time; the ability to produce more output with fewer resources.

Purchasing

The business buys the goods and services that it needs for producing the goods it sells or for delivering the services it sells.

Raw materials

Businesses that use raw materials that are heavy and/or bulky choose to locate close to their suppliers to reduce the cost of transport or storage.

Scarce resources

When the raw materials that are available are not sufficient to meet needs.

Supplier

A business that provides goods/services.

Technical economies of scale

The benefits that large businesses gain from having the funds to invest in expensive machinery that brings cost savings.

Wholesaler

A business or person that buys goods in large quantities from producers, stores them in warehouses and sells them on to retailers.