GCSE Business Edexcel – 1.4 Making the Business Effective

What is business ownership?

The legal structure showing who owns and controls a business.

What is sole trader?

A business owned by one person, who has unlimited liability.

What is partnership?

A business owned by two or more people who share control and profits.

What is private limited company (ltd)?

A company owned by shareholders whose shares are not offered to the general public.

What is limited liability?

Owners normally risk only the capital invested, not their personal assets.

What is unlimited liability?

Owners are personally responsible for business debts, including using personal assets.

What is incorporated business?

A business legally separate from its owners.

What is unincorporated business?

A business not legally separate from its owner or owners.

What is shareholder?

A person or organisation that owns shares in a company.

What is share?

A unit of ownership in a company.

What is franchise?

An arrangement allowing one business to trade using another business’s brand and system.

What is franchisor?

The business that owns the brand and grants the right to use it.

What is franchisee?

A person or business buying the right to operate using a franchisor’s brand.

What is franchise fee?

An initial payment made by a franchisee to join a franchise.

What is royalty?

An ongoing payment by a franchisee to the franchisor, often based on sales.

What is business location?

The place where a business chooses to operate.

What is proximity to market?

How close a business is to its customers.

What is proximity to labour?

How close a business is to people with the skills it needs to employ.

What is proximity to raw materials?

How close a business is to the supplies needed for production.

What is fixed premises?

A physical shop, office or other location used by a business.

What is e-commerce?

Buying and selling goods or services over the internet.

What is marketing mix?

The combination of product, price, place and promotion used to market a product.

What is product (marketing mix)?

The good or service provided to meet customer needs.

What is price (marketing mix)?

The amount charged to customers for the product.

What is place (marketing mix)?

How and where a product is made available to customers.

What is promotion (marketing mix)?

Methods used to inform, persuade or remind customers about a product.

What is digital communication?

Using digital technology, such as email or messaging, to exchange information.

What is business plan?

A document setting out a business idea, objectives, market, finances and operations.

What is sales forecast?

A prediction of the sales a business expects to make in a future period.

What is profit forecast?

A prediction of future profit based on expected revenue and costs.