Unit 1 Business Key Terms Aqa

Front 1

Adding Value

Back 1

A process through which a business increases the worth of the resources by modifying them

Front 2

Advisor

Back 2

An external contact of a business that provides support and advice, sometimes for free

Front 3

Bank Loan

Back 3

A fixed amount loan from a bank which is generally used to finance long-term assets

Front 4

Bank Overdraft

Back 4

When a bank allows a holder of a current account to overspend their account up to an agreed limit

Front 5

Breakeven Output

Back 5

is the level of production at which total revenue equals total cost i.e the business is making neither a profit nor a loss

Front 6

Budget

Back 6

A detailed plan of income and expenses expected over a certain period of time

Front 7

Business Angel

Back 7

A particular type of investor, usually a successful entrepreneur, who is willing to invest in a high-risk, high-growth firms at a very early stage

Front 8

Business Plan

Back 8

A detailed description of new or existing business, including the company's strategy, aims and objectives, marketing and financial plan

Front 9

Business Objective

Back 9

A stated goal or target of a business that is measured over time (a business can have more that one objective)

Front 10

Cash Flow

Back 10

The movement of cash into (inflow) and out of (outflow) a business

Front 11

Cash Flow Forecast

Back 11

Shows the inflows and outflows of money over a given period of time in a business

Front 12

Contribution

Back 12

The difference between total sales and total variable costs

Front 13

Contribution Per Unit

Back 13

A key number for breakeven analysis: the difference between selling price per unit and variable cost per unit

Front 14

Costs

Back 14

Amounts incurred by a business as a result of its trading operations

Front 15

Demand

Back 15

The amount of a product or service that customers are willing and able to pay at a given time

Front 16

Demographic

Back 16

Defining a market in terms of socio-economic factors such as segmentation age, income, class etc

Front 17

Electronic Market

Back 17

A Market in which buyers and sellers are brought together using digital means of communication in order to exchange information and conduct transactions

Front 18

Enterprise

Back 18

The process by which new business are formed in order to offer products and services in a market

Front 19

Entrepreneur

Back 19

An individual who sets up and runs a new business and takes on the risks associated with the business

Front 20

Expenditure Budget

Back 20

The budget which sets out the expected costs to be incurred by the firm, usually split into various categories (e.g. production, marketing, administration)

Front 21

Fixed Costs

Back 21

Costs that do not vary with the level of output- e.g. rent, salaries

Front 22

Franchisee

Back 22

The person or company which operates a franchised business format-under licence from a franchisor

Front 23

Franchisor

Back 23

The owner of a business format which is licensed out to other people or businesses

Front 24

Full-time Employment

Back 24

A worker who works s complete working week

Front 25

income Budget

Back 25

The budget which sets out estimates of the likely demand for and value of firms sales

Front 26

Inputs

Back 26

The resources (land, labour, capital, enterprise) that go into producing goods services

Front 27

Limited Liability

Back 27

Shareholders are only liable for the money they have invested- not for the overall debts and liabilities of their company

Front 28

Location

Back 28

The place(s) from which a firm does business. Can be both a physical location and also virtual

Front 29

Margin of Safety

Back 29

The difference between the actual level of output and the break even output

Front 30

Market

Back 30

Any place (e.g. physical, electronic) where buyers and sellers come together with a view to exchanging transactions

Front 31

Market Growth

Back 31

The percentage growth in the size of the market, measures over a specific period

Front 32

Market Research

Back 32

The process of planning, collecting and analysing data relevant to help make marketing decisions

Front 33

Market Segmentation

Back 33

The process of dividing a market into smaller sections which contain customers with similar needs and wants

Front 34

Market Share

Back 34

The share of the total market that is owned by a particular business, product or brand. Usually expressed in the percentage terms. The firm with the largest percentage market share is known a the market leader.

Front 35

Market Size

Back 35

The total value or quantity of demand in a specific market over a a specific period of time. Can be measured in value terms or in terms of quantities bought or sold

Front 36

Niche Market

Back 36

A smaller part of larger market in which in which customers have specific needs and wants

Front 37

Opportunity Cost

Back 37

The cost of a decision as measured by the benefits forgone of the next best alternative

Front 38

Patent

Back 38

The right to be the only user of producer of a specified product or process

Front 39

Permanent Employee

Back 39

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.

Front 40

Primary Research

Back 40

the market research that involves the collection of data first hand for a specific purpose

Front 41

Profit

Back 41

The difference between total sales and total costs

Front 42

Qualitative Research

Back 42

Market research concerned with collecting data on attitudes, opinions, beliefs, intentions etc

Front 43

Quantitative Research

Back 43

Market research concerned with collecting data that can be quantifies- e.g. sales statistics

Front 44

Return

Back 44

The rewards to enterprise- e.g. profit, satisfaction

Front 45

Revenue

Back 45

The income or sales that a business achieves in a period. Calculated by multiplying selling price x Units sold

Front 46

Risk

Back 46

The probability or chance that hoped-for outcomes will not occur

Front 47

Sample

Back 47

In market research, a sample is a subset of a population. Sampling is the process of taking and analysing a research sample

Front 48

Share capital

Back 48

The finance invested in a business (limited liability) by the shareholders- part of the equity capital of a firm

Front 49

Social Enterprise

Back 49

A business that has objectives other than making profit. Part of a group of organisations in the "not-for-profit" sector

Front 50

Sole Trader

Back 50

A one person business with unlimited liability for the debts of that business

Front 51

Supplier

Back 51

A business that provides good and services to other firms

Front 52

Total Costs

Back 52

The total of variable and fixed costs in a business

Front 53

Trade Credit

Back 53

Amount owed to suppliers of a business- a source of finance

Front 54

Trademark

Back 54

A word, symbol, or phrase used to identify a particular company's product and differentiate it from other companies' products

Front 55

Unlimited Liability

Back 55

Describes the potential risk that sole traders and partnerships face. They are liable for the debts of the business to the extent that their personal possessions are at risk

Front 56

Unique Selling Point (USP)

Back 56

A feature of a product or service that makes it stand out compared with the competition

Front 57

Variable Costs

Back 57

Costs that vary directly in proportion to output (e.g. materials, pay related to amounts produced or sold)

Front 58

Venture Capital

Back 58

Investment made by specialist funds to finance the launch, early development or expansion of a private company

Front 59

Working Capital

Back 59

The amount of money that a business has available to conduct its day-to-day activities