Business

Market Share

Percentage of the market that a business owns. Measured by product, brand or company.

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Private Limited Company (Ltd)

A company which can only sell shares to friends and family (invited shareholders). Have limited liability.

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Niche

A gap in the market that often a business fills by designing and manufacturing a product.

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Infrastructure

The transportation links a business had. A business needs good infrastructure so that they can access all the raw materials and customers that they need.

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Break-even

When a business's revenue equals its costs. Do not make a profit or a loss.

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SMART

Specific, Measurable, Achievable, Realistic and Time. All objectives a business sets should have all of these. They link into longer term aims.

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Unlimited liability

If a business goes into debt the owner is responsible for the full amount of debt. This means they could lose personal as well as business assets.

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Footfall

the amount of people that will be in the area of your business. It is the passing trade of people.

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USP

Unique selling point. Something that sets your product apart from others, it makes it different. Often adds value.

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Sole trader

A person who owns a business by themselves, have unlimited liability.

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Entrepreneur

Someone who is willing to take the risk involved in starting a business, Entrepreneurs believe that the rewards of stating a business are worth the risks and costs involved.

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Source of business ideas

Personal problems. Eureka moment.

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Characteristics of an Entrepreneur

Good communicator, Good listener, Creative thinker, Risk taker.

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Franchise

When a franchisor allows a franchisee the rights to use their brand and product in return for a fee.

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Social enterprise

A business which is set up who's aim is not to make profit- set up to better society or environment

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Objective

short term target that is set for a business to achieve. The ways in which you achieve your aim.

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Aim

A long term goal

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Business Plan

A document setting out what the business does at present and what it intends to do.

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BOLFPS

Business details, Objectives, Location, Finance, Product, Staff/Sales

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Partnership

2-20 people who own a business which has unlimited liability.

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Limited liability

If the business goes into debt the owners are not responsible for the full amount of debt. They cannot lose personal assets.

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Factors of Location

Raw materials, Infrastructure, Labour supply, Gov. assistance, Competitors, Cost of site, Proximity to the market.

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Market Research

Research carried out by a business to find out about potential customers, competitors and the product or service.

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Primary Research

First hand research which is carried out by the business to find new information, which is specific to the business.

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Questionnaire

An example of primary research. It is a set of questions set by the business to ask potential customers.

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Focus group

An example of primary research. It is a group of people asked to test and give feedback on a product or service.

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Telephone survey

An example of primary research and is questions asked to a potential customer over the telephone.

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Customer Feedback

Is information given to the business by customer explaining what they thought of a product or service.

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Direct Mail

An example of primary research. It is when a business sends mail directly to potential customers in order to advertise or to find out informtaion.

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Personal selling

products which are sold independently. They are done usually by a sales person face to face. It is a very personal way of selling.

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Marketing mix

Helps a business respond to change in order to keep up with the market. Can respond to change by changing an element of the marketing mix.

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Product

What a business sells to customers. It has to be carefully considered so that it is cheapest to make with the highest quality.

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Price

Is how much a business is going to charge for their product or service. It has to be carefully calculated so that the business can get a good enough profit margin to survive. There are many pricing strategies.

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Promotion

How a business advertises its product or service. A promotional budget is often set aside in order to raise awareness of the business.

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Place

The location of the business. It has to be carefully considered so that the cost of site is compared to the footfall, availability of space etc.

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Target Market

I the people which the product or service is designed for. The business will market and design the product so the target market know and like the product/service.

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Product Range

The variety of products that a business sells. The larger the range the large the target market.

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Product differentiation

The differences which stem from a basic product. This often increase a product life cycle and can add value to the product.

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E-commerce

Using the internet to sell a product or service. This reduces cost of site and allows more potential customers.

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Non-current assets

Something a business owns for more than a year.

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Revenue

Income earned by a business. Quantity sold x Selling price

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Fixed costs

Costs which don't vary with output. Also known as overheads.

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Current liabilities

Something a business owns for less than a year.

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Non-Current Liabilities

Something a business owns for more than a year.

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Statement of financial position

See how much the business is worth at one point in time.

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Current Assets

Something a business owns for less than a year.

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Current ratio

Current assets ÷ current liabilities

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Total costs

Variable costs + fixed costs

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Gross Profit margin

(gross profit ÷ sales) x 100

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Payables

Money owed by a business to its supplier.

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Cost fo Sales

How much it costs to produce the product.

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Variable costs

Coats that increase as demand/output increases.

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Working capital

money used in the day to day running of the business. CA - CL

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Dividends

Payment made by a business to its shareholders.

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Retained profit

Keeping profit after tac and cost has been taken away. A source of finance.

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Liquidity

How quick/easily a business can turn something into cash.

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Net profit margin

(Net profit ÷ sales) x 100

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Expenses

Also know as overheads, which have to be paid by the business.

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Bank Loan

Borrowed funds from a bank to be repaid with interest.

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Overdraft

Where a bank allows a firm to take out more money than it has in its bank account.

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Mortgage

A special type of loan for buying property monthly payments are spread over a number of years.

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Friends + family

Borrowed funds from people know to the business owners.

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Selling unwanted assets

Raising funds from selling items are no longer needed by the business.

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Government grant

Finance from charities or the government to help businesses get started, especially in areas of high unemployment.

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Share issue

Shares are sold to existing or new shareholders.

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Delayering

Removing a layer from the organisational chart. This increases communication and middle manages would be removed span of control increases.

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Human resource management

A department which deals with the welfare of a business's employees. Looks after pay, hours and grievance.

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Job description

States what the job is and what the person will need .

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Person Specification

States the essential and desirables the person needs.

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Recruitment agency

A company which hires people an carries out the recruitment process for a business in return for a fee.

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Appraisal

every 6-12 months, an assessment of ow the workers are doing- sit down meeting with boss.

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Induction programme

When and employer will take and employee round the business to meet people and to be shown the health and safety rules etc.

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Democratic leader

Someone who has been selected but will listen to others views before making a decision.

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Labour turnover

The number of employees which leave the business in a certain time frame.

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Performance related pay

When an employee earns money depending on how well they are doing.

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Off-the-job training

Training done by and exterior company. This is costly but the skills gain may be better.

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Motivation

The desire/drive to achieve something. The more motivated you are the more likely you are to achieve your goal.

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Remuneration

Another way of saying pay.

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Selection

Deciding which employee you are going to give a job too.

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Centralisation (HQ)

When decisions are left to one central person/team. All the other areas have to abide by these rules.

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Decentralisation

When decisions are spread out to different areas. This leads to more variety pf the different sections.

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On-the-job training

Training which is done internally by another employee. This is cheap and is specific to the business.

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Salary

The firm agrees to pay the worker and amount for the year. This is divided by 12 and paid out monthly.

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Overtime pay

The time rate maybe increased to persuade the worker to work extra hours above the normal working day or week. Overtime maybe paid at time and quarter or time and a half.

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Time rate

The worker is paid a set sum of money for each our worked.

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Piece rate

This method of pay maybe used where he work of individual workers can be measured. The worker is paid a sum of money for each item they complete.

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Commision

This is paid to workers who sell goods or services. The amount to be paid is ususally calculated as a percentage of the value of the goods of service the worker sells.

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Bonus

This is an extra lunp sum that may be paid to an individual or a group of workers they reach a target level of production.

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Profit sharing

The worker may be paid a share of any profits that the firm makes.

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Fringe benefits

Employees benefit from 'extras' including a company car and health insurance.

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Internal recruitment

Employing within a business.

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External recruitment

when a business employs someone outside the business. Wider pool of people.

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Interviews

Face to face interaction between company and possible employee. Always done in recruitment process.

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Psychometric tests

Assess how yours brain works, to see if you would fit in with the working environment.

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CV

Curriculum Vitae- who you are, qualifications, experience and you ambitions.

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Assessment centres

Challenges to see how you react. Assessing how you work as an individual.

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Efficiency

Max output with Min input.

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Cell production

A variation of flow production where employees work in teams. Workers are skilled at a number of roles.

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Capital intensive

When work is done by machinery.

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Outsourcing

Getting resources from outside the business in order to cope with demand.

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Quality

A product that meet the exact needs of the customer.

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Flow production

Items produces on a large scale automated production line.

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Labour intensive

Work based on workers rather than machinery.

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Lean production

Production technique that aims to save money by avoiding waste as much as possible.

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Specialisation

Staff to do specific task they specialise in.

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Job production

The production of one-off products that are made to fit the customers exact specification.

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Kaizen

Striving to makes small but frequent improvements with the help and commitment of all employees.

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Batch production

Small quantity of identical products produced- every unit goes through the same process at the same time.

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Just-in-time production

Manufacturing and buying materials for a product when you get and order. This reduces waste and storage costs.

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Quality control

Checking the quantity of a product at the end of the production line.

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Price skimming

When a high price is set for a product when it first enters the market.

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Penetration pricing

launch a product with a low price in order to get sales quickly.

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Competitive pricing

pricing to try to match the price that others are charging.

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Loss leader

A business sells a product at a loss so that the customer will buy more or something else.

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Cost plus pricing

it works by calculating the costs and makes a profit.

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Acid test ratio

(Current assets - inventories) ÷ current liabilities

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Gross profit

Revenue - cost of sales

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Net profit

Gross profit- expenses.

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Expenses

Non-current assets of a business.

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Receivables

Cash you are waiting to receive.

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Business

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