A general statement of where you're heading, for example 'to get to university'
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Market share
The percentage of a market held by one company or brand.
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Objectives
A clear, measurable goal, so success or failure is clear to see
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SMART objectives
Targets that are specific, measurable, achievable, realistic and time-bound
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Social objectives
Likely to be non-financial and designed to improve the quality of life for a community
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Survival
Keeping the business going, which ultimately depends on determination and cash
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Fixed costs
Costs that don't vary just because output varies, for example rent (sometimes called overheads)
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Variable costs
Costs that DO vary with changes in output, for example packaging
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Interest
The charges made by banks for the cash they lent to a business, for example six per cent per year
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Profit
\= TOTAL REVENUE - TOTAL COSTS The amount of revenue left over once costs have been deducted.
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Revenue
\= PRICE x QUANTITY The total value of the sales made within a set period of time
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Total costs
\= VARIABLE COSTS + FIXED COSTS All the costs (both fixed and variable) for a set period of time
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Break-even
The level of sales at which total costs are equal to total revenue. At this point the business is making neither a profit nor a loss. FIXED COSTS \= \--------------------------------------------- PRICE - VARIABLE COSTS PER UNIT
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Break-even chart
A graph showing a company's revenue and total costs at all possible levels of output
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Margin of safety
The amount by which demand can fall before the business starts making losses \= SALES - BREAK-EVEN OUTPUT
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Cash
The money a firm holds in notes, coins and in its bank accounts
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Cash flow
The movement of money into and out of the firm's bank account
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Insolvency
What a business lacks the cash to pay its debts
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Overdraft
A facility offered by a bank that allows an account holder to borrow money at short notice
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Overdraft facility
An agreed maximum level of overdraft
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Cash flow forecast
Estimating the likely flows of cash over the coming months and, therefore, the overall state of the bank balance
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Closing balance
The amount of cash left in the bank at the end of the month
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Negative cash flow
When cash outflows are greater than cash inflows
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Stable cash flow
When cash outflows are the same as cash inflows
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Positive cash flow
When cash outflows are less than cash inflows
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Net cash flow
Cash in minus cash out over a period of time
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Opening balance
The amount of cash in the bank at the start of the month
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Crowdfunding
Raising capital online from many small investors (but not through the stock exchange)
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Dividends
Payments made to shareholders from the company's yearly profits. Company directors decide how much, if any, they will pay in dividends
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Retained profit
Profit kept within the business (not paid out in dividends)
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Share capital
Raising finance by selling part ownership in the business. Shareholders have the right to question the directors and to receive part of the yearly profits as dividends
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Trade credit
When a supplier provides goods but is willing to wait to be paid - for perhaps up to three months.
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Venture Capital
A combination of share capital and loan capital, proved by an investor willing to take a chance on the success of a small to medium-sized business.
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Loans
Money lent (often by a bank) which will be paid back over a period of time, with Interest.
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Asset
Any item of value that a business owns eg machinery
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Security
When the lender asks the borrower to put up an asset which can be taken if the loan is not paid back
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