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76 Cards in this Set

  • Front
  • Back

Market research

The process of collecting and interpreting data about customers and competitors


Two types:


Primary


Secondary

Quota sampling

Selecting interviewers in proportion to the consumer profile within your target market

Random sampling

Selecting respondents to ensure that everyone in the population has an equal chance of being interviewed

Stratified sampling

Interviewing only those with a key characteristic required for the sample

Market share

Proportion of a total market accounted for by one product or company


Sales value


------------------ x100


total value

Market sales

The measurement of the size of total sales for a whole market


Eg sales of 1.2m which represents 20%


1.2


------ ×100 = 6million


20

Market growth

The measurement of the change in market size



New market size- previous year market size = difference



Difference in market size


------------------------------------ ×100


Original market size


Market segmentation

Recognises that customers are not all the same, that they have different needs. It divides the market into groups of customers with similar characteristics

Market segment

A group if consumers within a larger market who have similar characteristics, such as age or income level

Business plan

A written document describing the nature of the business, it's objectives, marketing strategy and projected cash flow forecast and income statement

Budgets

Financial targets for the future covering revenue and expenditure over a certain time period

Quantitative data

Data in numerical form. Is usually collected from larger scale research in order to generate statistically reliable results

Qualitative data

Data about opinions, attitudes and feelings. It is usually expressed in terms of why people feel or behave the way they do

Unlimited liability

A feature of unincorporated businesses where the owners are personally liable for all debts incurred by a business. All sole traders and most partnerships have unlimited liability

Limited liability

A feature of incorporated businesses such as private and public limited companies, which means that the owners liability is limited to the amount they have invested in the business

Internal source of finance

Finances raised from within the business

External sources of finance

Those that are outside the business, such as banks and shareholders

Overdraft

A temporary arrangement which allows the business to draw out more money than is in its account, up to an agreed limit

Loan

A good source of finance for assets such as machinery and equipment and other start up costs

Profit

Total revenue - total costs

Revenue

Income earned by sales, sometimes called turnover

Costs

Expenditures made by a business in order to carry out training

Fixed costs

Those that do not change with level of output or sales also known as indirect costs

Variable coats

Those that change with level or output or sales also known as direct costs

Total costs

Fixed costs + variable costs

Average variable costs per unit

Total variable costs


-----------------------------


Output

Total revenue

Selling price × number of units sold

Contribution

Surplus after all variable costs have been paid for from sales revenue. Not the same as profit as fixed costs are not subtracted. Surplus goes towards paying for fixed costs

Contribution per unit

Selling price - variable costs

Total contribution

Contribution x number of units


per unit sold

Break-even

Same total revenue as total costs



Fixed costs


----------------


Contribution


per unit

Margin of safety

Difference between sales and break-even point

Enterprise

The attitudes and skills that help an individual turn an idea into reality

Entrepreneur

Someone who us prepared to take risks and makes a business idea happen successfully

Opportunity costs

The costs of missing out on the next best alternative

Business objectives

Clearly defined targets for a business to achieve over a certain period of time

Copyright

The protection give to books, plays, films and music.

Patent

An exclusive right to use a process or produce a product. Usually for a fixed period of time up to 20 years

Trademark

A word, image, sound or smell that enables a business to differenciate itself from its competitors

Added value

The difference in value between the price of the finished product and the cost of materials used

Output

Something that occurs as a result of the transformation of business inputs

Franchise

A form of business contract in which the franchisor already has a successful product or service and agrees to sell to the franchisee the right to use the name, logo and trading methods of the business

Franchisor

The business selling the franchise agreement from the franchisor business

Franchisee

The entrepreneur who buys the franchise agreement from the franchisor business

Adverse variance

Actual sales lower than budgeted


Actual expenditure higher than budgeted


Actual profit lower than budgeted

Input

Something that contributes to the production of a product or service

Business angel

Wealthy individual. Invest in a small, high risk business who expect a high return

Venture capitalist

Professional investor, often another company. Invest in return for shares, usually investments of £250,000 or more

Favourable variance

Actual sales higher than budgeted


Actual costs lower than budgeted

Cash inflows

Payments in cash received by a business such as those from customers or from the bank

Liquidation

This is turning assets into cash and may be insisted on by courts if suppliers have not been paid

Insolvent

When a business cannot meet its short-term debts

Infrastructure

The fundamental facilities and systems serving a country, city or area as transportation and communications systems, power plants and schools

Location

The place where a firm decides to site it's operation

Cash flow

The total cash inflows minus the total cash outflows

Cash outflows

Payments in cash made by a business such as those to suppliers and workers

Industrial intertia

A business remains in its current location when there is no real reason for them to

Net monthly cash flow

The estimated difference between monthly cash inflows and outflows

Opening balance

Cash help by the business at the start of the month

Closing balance

Cash help at the end of the month-becomes next month's opening balance

Footloose

Is not tied to any particular location because it relies heavily on technology and communication links

Bulk increasing industry

Uses low volume materials and parts to produce larger end products

Build reducing industry

Uses high volume materials and parts to produce smaller end products

Cash flow forecast

An estimate of a firms future cash inflows and outflows

Full-time employees

Staff who are under contract to work the normal basic full-time hours of a business

Part-time employees

Staff who are contracted to work for anything less than what is conquered the normal basic full-time hours of a business

Consultants

Businesses or individuals who provide professional advice or services for a fee. How to make small business successful or to deal with a specific problem

Permanent employees

Workers with a contract of employment with a business that is open-ended

Temporary employees

Employees on fixed-term contracts of employment, either for a predetermined time or until a specific task or set of tasks is complete

Budget

Financial targets for the future, covering revenue and expenditure over a certain time period

Expenditure budgets

A fixed sum of money to be spent in a give time period by a department

Income budget

The sales revenue target for a department of the whole business

Delegated budget

Giving some control in the setting and spending of budgets to departments or individuals

Profit budget

The target profit for the business over a given time period

Budget holder

A person who is accountable for seeing that a budget is kept to

Monitoring budgets

Keeping a check on progress towards achieving targets during the budget period