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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 |
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Quota sampling |
Selecting interviewers in proportion to the consumer profile within your target market |
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Random sampling |
Selecting respondents to ensure that everyone in the population has an equal chance of being interviewed |
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Stratified sampling |
Interviewing only those with a key characteristic required for the sample |
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Market share |
Proportion of a total market accounted for by one product or company Sales value ------------------ x100 total value |
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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 |
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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 |
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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 |
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Market segment |
A group if consumers within a larger market who have similar characteristics, such as age or income level |
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Business plan |
A written document describing the nature of the business, it's objectives, marketing strategy and projected cash flow forecast and income statement |
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Budgets |
Financial targets for the future covering revenue and expenditure over a certain time period |
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Quantitative data |
Data in numerical form. Is usually collected from larger scale research in order to generate statistically reliable results |
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Qualitative data |
Data about opinions, attitudes and feelings. It is usually expressed in terms of why people feel or behave the way they do |
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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 |
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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 |
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Internal source of finance |
Finances raised from within the business |
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External sources of finance |
Those that are outside the business, such as banks and shareholders |
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Overdraft |
A temporary arrangement which allows the business to draw out more money than is in its account, up to an agreed limit |
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Loan |
A good source of finance for assets such as machinery and equipment and other start up costs |
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Profit |
Total revenue - total costs |
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Revenue |
Income earned by sales, sometimes called turnover |
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Costs |
Expenditures made by a business in order to carry out training |
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Fixed costs |
Those that do not change with level of output or sales also known as indirect costs |
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Variable coats |
Those that change with level or output or sales also known as direct costs |
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Total costs |
Fixed costs + variable costs |
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Average variable costs per unit |
Total variable costs ----------------------------- Output |
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Total revenue |
Selling price × number of units sold |
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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 |
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Contribution per unit |
Selling price - variable costs |
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Total contribution |
Contribution x number of units per unit sold |
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Break-even |
Same total revenue as total costs Fixed costs ---------------- Contribution per unit |
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Margin of safety |
Difference between sales and break-even point |
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Enterprise |
The attitudes and skills that help an individual turn an idea into reality |
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Entrepreneur |
Someone who us prepared to take risks and makes a business idea happen successfully |
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Opportunity costs |
The costs of missing out on the next best alternative |
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Business objectives |
Clearly defined targets for a business to achieve over a certain period of time |
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Copyright |
The protection give to books, plays, films and music. |
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Patent |
An exclusive right to use a process or produce a product. Usually for a fixed period of time up to 20 years |
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Trademark |
A word, image, sound or smell that enables a business to differenciate itself from its competitors |
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Added value |
The difference in value between the price of the finished product and the cost of materials used |
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Output |
Something that occurs as a result of the transformation of business inputs |
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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 |
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Franchisor |
The business selling the franchise agreement from the franchisor business |
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Franchisee |
The entrepreneur who buys the franchise agreement from the franchisor business |
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Adverse variance |
Actual sales lower than budgeted Actual expenditure higher than budgeted Actual profit lower than budgeted |
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Input |
Something that contributes to the production of a product or service |
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Business angel |
Wealthy individual. Invest in a small, high risk business who expect a high return |
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Venture capitalist |
Professional investor, often another company. Invest in return for shares, usually investments of £250,000 or more |
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Favourable variance |
Actual sales higher than budgeted Actual costs lower than budgeted |
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Cash inflows |
Payments in cash received by a business such as those from customers or from the bank |
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Liquidation |
This is turning assets into cash and may be insisted on by courts if suppliers have not been paid |
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Insolvent |
When a business cannot meet its short-term debts |
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Infrastructure |
The fundamental facilities and systems serving a country, city or area as transportation and communications systems, power plants and schools |
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Location |
The place where a firm decides to site it's operation |
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Cash flow |
The total cash inflows minus the total cash outflows |
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Cash outflows |
Payments in cash made by a business such as those to suppliers and workers |
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Industrial intertia |
A business remains in its current location when there is no real reason for them to |
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Net monthly cash flow |
The estimated difference between monthly cash inflows and outflows |
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Opening balance |
Cash help by the business at the start of the month |
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Closing balance |
Cash help at the end of the month-becomes next month's opening balance |
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Footloose |
Is not tied to any particular location because it relies heavily on technology and communication links |
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Bulk increasing industry |
Uses low volume materials and parts to produce larger end products |
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Build reducing industry |
Uses high volume materials and parts to produce smaller end products |
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Cash flow forecast |
An estimate of a firms future cash inflows and outflows |
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Full-time employees |
Staff who are under contract to work the normal basic full-time hours of a business |
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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 |
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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 |
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Permanent employees |
Workers with a contract of employment with a business that is open-ended |
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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 |
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Budget |
Financial targets for the future, covering revenue and expenditure over a certain time period |
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Expenditure budgets |
A fixed sum of money to be spent in a give time period by a department |
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Income budget |
The sales revenue target for a department of the whole business |
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Delegated budget |
Giving some control in the setting and spending of budgets to departments or individuals |
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Profit budget |
The target profit for the business over a given time period |
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Budget holder |
A person who is accountable for seeing that a budget is kept to |
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Monitoring budgets |
Keeping a check on progress towards achieving targets during the budget period |