Business revision Unit 1

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  1. Adding value
    A process through which a business increases the worth of the resources included in production so that customers perceive the product to be worth more than the cost of the inputs
  2. Adviser
    An external contact of a business that provides support and advice, sometimes for free
  3. Bank loan
    A fixed amount loan from a bank which is generally used to finance long-term assets
  4. Bank overdraft
    Borrowings from a bank on a current account which are payable on demand
  5. Breakeven output (or point)
    The point at which the total sales of a business equal total costs -i.e. the business is making neither a profit nor a loss
  6. Budget
    A detailed plan of income and expenses expected over a certain period of time
  7. Business angel
    A particular type of investor, usually a successful entrepreneur, who is willing to invest in high-risk, high-growth firms at a very early stage
  8. Business plan
    A detailed description of a new or existing business, including the company’s strategy, aims and objectives, marketing & financial plan
  9. Business objective
    A stated goal or target of a business (note: a business can have more than one objective!)
  10. Cash flow
    The movements of cash into (“inflows”) and out of (“outflows”) a business
  11. Cash flow forecast
    A projection, usually by week or month, of the likely cash inflows and outflows in a business
  12. Contribution
    The difference between total sales and total variable costs
  13. Contribution per unit
    A key number for breakeven analysis: the difference between selling price per unit and variable cost per unit.
  14. Costs
    Amounts incurred by a business as a result of its trading operations
  15. Demand
    The amount of a product or service that customers are willing and able to pay at a given time
  16. Demographic
    Defining a market in terms of social-economic factors such as segmentation age, income, class etc
  17. Elasticity of demand
    The responsiveness of demand to a change in price or incomes
  18. Electronic market
    A market in which buyers and sellers are brought together using digital means of communication (e.g. online) in order to exchange information (e.g. prices) and conduct transactions. Compare with physical markets where buyers and sellers meet face to face.
  19. Enterprise
    The process by which new businesses are formed in order to offer products and services in a market
  20. Entrepreneur
    An individual who sets up and runs a new business and takes on the risks associated with the business
  21. Expenditure budget
    The budget which sets out the expected costs to be incurred by the firm, usually split into various categories (e.g. production, marketing, administration)
  22. Fixed costs
    Costs that do not vary with the level of output – e.g. rent, salaries)Franchisee The person or company which operates a franchised business format - under licence from a franchisor
  23. Franchisor
    The owner of a business format (franchise) which is licensed out to othr people or businesses (franchisees)
  24. Full-time employee
    An employees who works more than 30 hours a week in a business (compare with part-time, which is working for less than 30 hours)
  25. Income budget
    The budget which sets out estimates of the likely demand for and value of the firms sales
  26. Inputs
    The resources (land, labour, capital, enterprise) that go into producing goods and services
  27. Limited liability
    Shareholders are only liable for the money they have invested - not for the overall debts and liabilities of their company
  28. Location
    The pace (or places) from which a firm does business. Can be both a physical location and also virtual.
  29. Margin of safety
    The difference between the actual level of output and the break even output
  30. Market
    Any place (e.g. physical, electronic) where buyers and sellers come together with a view to exchanging transactions
  31. Market growth
    The percentage growth in the size of the market, measured over a specific period
  32. Market research
    The process of planning, collecting, and analysing data relevant to help make marketing decisions
  33. Market segmentation
    The process of dividing a market into smaller sections (segments) segmentation which contain customers with similar needs and wants
  34. Market share
    • The share of the total market that is owned by a particular business, product or brand. Usually expressed in percentage terms. The firm with the largest percentage market share is known as the
    • market leader.
  35. Market size
    The total value or quantity of demand in a specific market over a specific period of time. Can be measured in value terms (e.g. sales) or in terms of quantities (e.g. units) bought or sold.
  36. Niche market
    A smaller part of a larger market in which customers have more specific needs and wants.
  37. Opportunity cost
    The cost of a decision as measured by the benefits foregone of the next best alternative
  38. Patent
    The right to be the only user of producer of a specified product or process
  39. Permanent employee
    • An employee who is employed on a formal employment contract and remains with the firm for an open-ended period until the contract is ended. Compare with a temporary employee (“temp”)
    • who is employed for a shorter, time-limited period.
  40. Primary research
    The market research that involves the collection of data that does not yet exist
  41. Profit
    The difference between total sales and total costs
  42. Qualitative research
    Market research concerned with collecting data on attitudes, opinions, beliefs, intentions etc.
  43. Quantitative research
    Market research concerned with collecting data that can be quantified - e.g. sales statistics
  44. Return
    The rewards to enterprise – e.g. profit, satisfaction
  45. Revenue
    The income or sales that a business achieves in a period. Calculated by multiplying selling price per unit x units sold.
  46. Risk
    The probability or chance that hoped-for outcomes will not occur
  47. Sample
    In market research, a sample is a subset of a population. Sampling is the process of taking and analysing a research sample.
  48. Share capital
    The finance invested in a business (limited company) by the shareholders – part of the equity capital of a firm
  49. Social enterprise
    A business that has objectives other than making profit. Part of a group of organisations in the “not-for-profit” sector
  50. Sole trader
    A one-person business with unlimited liability for the debts of that business
  51. Supplier
    A business that provides goods and services to other firms.
  52. Total costs
    The total of variable and fixed costs in a business
  53. Trade credit
    Amounts owed to suppliers of a business – a source of finance
  54. Trademark
    A word, symbol, or phrase used to identify a particular company’s product and differentiate it from other companies’ products
  55. Unlimited liability
    Unlimited liability describes the potential risk that sole traders and partnerships face. They are liable for the debts of the business
  56. USP
    Unique selling point - a feature of a product or service that makes it stand out compared with the competition
  57. Variable costs
    Costs that vary directly in proportion to output (e.g. materials, pay related to amounts produced or sold)
  58. Venture capital
    Investment made by specialist funds to finance the launch, early development or expansion of a private company
  59. Working capital
    The amount of money that a business has available to conduct its day-to-day activities
Card Set:
Business revision Unit 1

For AQA Unit 1 AS in 2012.
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