Business in the real world (AQA GCSE Business)

Good

An actual physical product

Service

A product that you cannot touch

Customer

The person who buys the product

Consumer

The person who uses the good or service

Entrepreneur

A person who is willing to take a risk in starting a new business

Social Enterprise

A business that is set up to help the community rather than to make profit.

Resources

The materials needed by a business to produce their goods and services.

Primary Sector

A business that takes raw materials from the ground

Secondary Sector

A businesses that manufactures goods

Tertiary Sector

A business that provides a service

Interest

The money paid on savings and the extra paid to borrow money.

Interest Rates

The amount of interest received or paid as a %.

Inflation

How fast prices are rising.

Gross Domestic Product (GDP)

The income earnt by a whole country in one year.

Profit

The amount of money a business has made after all bills have been paid.

Unlimited Liability

There is NO limit to the amount of money the owners will have to pay if the business fails.

Partnership

2 -20 people set up in business together.

Deed of Partnership

An agreement between partners that sets out the rules of the partnership.

Company

A business that legally is seen as separate from the owners.

Shareholder

A person who buys and owns part of a business.

Ltd

A private limited company

PLC

A public limited company

Stock Exchange

Where PLCs buy and sell their shares.

Flotation

When an Ltd becomes a PLC.

Aim

A general goal of a business

Objective

A specific target for the business to achieve.

Private Sector Organisations

Those businesses that are owned by individuals.

Public Sector Organisations

Those businesses that are owned by the Government.

Dividends

The share of profits paid out to shareholders each year.

Stakeholders

Anyone that is affected by or affects the stakeholders of a business.

Negotiation

When two sides discuss what they want to reach an agreement.

Location

Where a business sets up.

Overseas Location

Setting up your business in a different country.

Protectionist measures

Laws set in place by the Government to protect UK businesses from overseas competition.

Tariff

A tax on foreign goods brought into the UK. This would make them more expensive.

Imports

Goods and services bought from overseas.

Exports

Goods and services sold overseas.

Quota

A limit on the number of foreign goods that can be brought into the UK.

Business Plan

A document setting out what the business does and what it wants to achieve in the future.

Risk

The possibility that something could go wrong.

Revenue/Turnover

The money made from selling goods and services. (Units sold X Price)

Variable Costs (VC)

Costs that change when output changes

Fixed Costs (FC)

Costs that don't change when output changes

Total Costs

The amount a business spends overall.

Organic Growth (Internal)

When a business gets bigger by selling more of its products.

Inorganic Growth (External)

When businesses grow by joining with another business.

Merger

Two or more businesses join together.

Takeover

When one business buys control over another.

Franchise

When you pay for the right to use a business name that is already well know.

Franchisee

The person who buys the right to use the name.

Franchisor

The business selling the franchise.

Economies of Scale

Unit costs fall as a business produces more.

Diseconomies of Scale

Unit costs rise as a business continues to produce more.