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Aim

The intention to reach a goal.

Asset

Something the business owns; it has a value.

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.

Advertising

A method of communicating information about the product; the business pays for advertising time/space.

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.

Brand image

The consumers' perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns.

Average rate of return

The average profit for the year as a percentage of the original investment.

Business plan

A detailed statement of how the business intends to operate, either at start-up or during a given period of time.

Competition

The rivalry between businesses looking to sell their goods/services in the same market.

Consumer spending

The money spent by households on goods and services to satisfy their needs and wants.

Channels of distribution

The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers.

Break-even chart

A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross.

Break-even output

The point at which the business' total sales equals the total costs. There is neither profit nor loss.

Cost

The money spent by a business on goods and services.

Competitive pricing

Setting the price of a product so that it is in line with competitors' prices.

Contracts of employment

A legal document that sets out the terms and conditions of the job for the employer and the employee.

Customer

Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.

Disposal of waste

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

Cost-plus pricing

Setting the price of a good or service at an amount higher than the cost of producing it so that a profit is made.

Cash

Money that the business has in cash or at the bank.

Cash flow forecast

A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity.

Customer engagement

The relationship between the business and the customer that puts the customer's requirements at the centre of the operation to build brand loyalty.

E-commerce

Business transactions carried out electronically on the internet

Customer satisfaction

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

Demand

The quantity of a particular product that will be bought at particular price over a specific time.

Extension strategies

Methods that can be used to prolong the life of a product; could include price reductions, modifications to the product or relaunch.

Cash inflow

Money received by the business from its operations or investments.

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.

Focus groups

A small number of people from the target market brought together to discuss a particular product; produces qualitative data about their preferences and opinions.

Cash outflow

Money paid out by the business to fund its operations or investment activities.

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.

Directors

The people who are elected by the shareholders to run the business on their behalf.

Ethical objectives

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

Loss leader

A good or service sold at below cost price to bring customers into the shop with the intention that, once there, they may purchase full-priced items too.

Closing balance

The amount that remains in the account at the end of an accounting period.

Diseconomies of scale

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

Dividend

A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.

Ethics

The moral principles that guide how a business operates.

Market research

Collecting information about the customers' needs, wants and preferences that will help the business to make design, production and marketing decisions.

External sources of finance

Obtaining funds from sources that are not part of the business; possibilities include bank loan, mortgage, overdraft, additional partner or share issue.

Fixed costs

The costs that stay largely the same, regardless of the business' output.

E-commerce

Business transactions carried out electronically on the internet.

Marketing

The coordination of activities that ensure that customers get what they want, in the amounts they want, when they want it and at a price that suits them.

Exchange rates

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

Economies of scale

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

Export

Good/service sold to a customer in another country.

Marketing mix

The combination of four areas of marketing activities (price, product, promotion and place) to make sure that customers' needs and wants are met while generating optimum revenue.

Government grants

Money available from the government to fund projects that it wants to support; the money is not repaid, but there are conditions and often progress reports are required.

Point of sale

Opportunities to communicate information about the product in the place where it is sold (retail outlet); window displays, hanging signs or shelf signs.

Hire purchase

Buying items by making a small initial payment and paying the remaining amount in installments over an agreed period of time.

Global warming

The steady increase in the earth's temperature due to emissions and the buildup of greenhouse gases, resulting in climate changes.

Employees

Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.

Enterprise

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

Globalisation

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

PR

Managing the relations with groups such as consumers, the media, pressure groups or investors to present a favourable impression and generate interest.

Income statement

A summary of the revenue and expenses over an accounting period that lead to a profit or loss position.

Entrepreneur

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

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.

Price penetration

Fixing a low price when a new product is first introduced (into an established market) so that the product gains market share quickly. Once the product is established, the price is then raised so that profit is increased.

Interest rates

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

Liability

The extent of the owner's/owners' responsibility for the debts of the business.

Import

Good/service bought from a supplier in another country.

Price skimming

Setting a very high price when a product (often technology item) is first introduced to the market in relatively small numbers; only those who can afford to pay high prices to own the latest models will be able to purchase the product. The price is later reduced so that others can afford to buy.

Ethical objectives

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

Ethics

The moral principles that guide how a business operates.

Interest rates

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

Primary research

Collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product.

Loans

A fixed sum of money borrowed for a specified period of time at an agreed rate of interest; repaid in installments.

Product differentiation

Developing the features that set a product apart from others in the market (such as benefits, style, price) and using that as part of advertising and promotion.

Loss

Where expenditure is greater than income.

Level of employment

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

Expansion

The process of increasing a business' size.

Export

Good/service sold to a customer in another country.

M-commerce

Business transactions are carried out electronically by mobile phone.

Product life cycle

The stages through which a product travels during its journey from being an idea to being old and dated: research and development, introduction, growth, maturity, decline.

Margin of safety

The amount by which current sales exceed the break-even level of output.

External growth

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

National minimum wage/living wage

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

Product portfolio

The range of products offered by one producer

Net cash flow

The difference between cash inflows and cash outflows.

Opening balance

The amount brought forward from the end of the preceding accounting period so that it is the starting figure for the new one.

Promotion

Communicating information about the product to make consumers aware of a product, remind customers about a product & persuade customers to buy.

Noise pollution

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

Factors of production

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

Fixed costs

The costs that stay largely the same, regardless of the business' output.

Qualitative market research

Collecting information about potential customers' opinions and preferences about the attributes/characteristics/properties of a product; open questions allow respondents to express their own views by not limiting their responses.

Overdraft

Borrowing from a bank by drawing from a current account so that the balance becomes less than zero.

Recycling

The conversion of waste into reusable material.

Franchising

The sale of the rights to use/sell a product by a franchisor to a franchisee.

Risk

The possibility that the return on investment will be lower than expected

Quantitative market research

Using sampling techniques such as surveys where the findings are expressed numerically; closed questions allow a limited choice of responses and are easy to turn into statistics for analysis.

Profit

The difference between the money received from the sale of a good/service and the amount it cost; the amount that remains after all the costs have been paid.

Profit maximisation

A business' ability to make maximum profit with low operating expenses.

Gap in the market

An opportunity for a new business (or expansion) which may meet a need that is not being met.

Retailer

A business or person that sells goods to the consumer.

Sustainability

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

Goods

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

Traffic congestion

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

Secondary research

Examining information from published sources; desk research using information that has been collected for other purposes.

Raising finance

Getting the money to pay for starting the business or for developing it.