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business revision Flashcards

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1
Q

What is a supplier, and what do they do?

A

It is a business which sells (or supplies) products to another business.

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2
Q

What is the difference between a customer and a consumer?

A

A customer is a person or organisation which buys or is supplied with a product or by a business.
A consumer is the person who ultimately uses (or consumes) a product.

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3
Q

What are the four main needs for a customer?

A

Value for money
Disability access
Good quality products/services
A Safe environment

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4
Q

What is primary (or field) research?

A

The gathering of new information which has not been collected before. E.g Survey, focus group, interview

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5
Q

What is a survey, who are respondents and what do they do?

A

A survey is research involving asking questions of people or organisations.

Respondents are those who provide data for a survey usually by answering questions in a questionnaire or interview.

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6
Q

What is a questionnaire?

A

A list of questions to be answered by respondents, designed to gather information about consumers’ tastes.

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7
Q

What is a focus group and what do they do?

A

In market research, it is a group of people brought together to answer questions and discuss a product, brand or issue.

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8
Q

What is secondary (or desk) research?

A

It is information that has already been gathered e.g sales records, government statistics, newspaper articles

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9
Q

What is the difference between qualitative data and and quantitative data?

A

Qualitative data is information about opinions, judgments and attitudes. E.g interviews, focus groups, questionnaires.
Quantitative data is data that can be expressed as numbers and can be statistically analysed. E.g survey, sales data.

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10
Q

What is a market segment?

A

Part of a market that contains a group of buyers with similar buying habits, such as age or income.

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11
Q

What is price sensitivity?

A

When the price is very important in the decision about whether or not to buy.

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12
Q

What is a market map (Perceptual Map or Positioning Map)

A

A diagram that shows the range of possible positions for two features of a product, such as low to high price and low to high quality.

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13
Q

What is gap in the market?

A

It occurs when no business is currently serving the needs of customers for a particular product.

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14
Q

What is product range?

A

A group of similar products made by a business like a number of different soap products.

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15
Q

What is a brand?

A

A named product which customers see as being different from other products and which they can associate or identify with.

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16
Q

What is added value?

A

The increase worth that a business creates for a product; it is the difference between what a business pays to its suppliers and the price that is able to charge for the product/ service.

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17
Q

What is a unique selling point (USP)?

A

A characteristic of a product that make it different from other similar products being sold in the market such as design, quality or image.

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18
Q

What is a franchise?

A

The right given by one business to another to sell goods or services using its name.

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19
Q

What is the difference between a franchisee and a franchisor?

A

A franchisee is a business that agrees to manufacture, distribute or provide a branded product, under licence by a franchisor.
A franchisor is the business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment

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20
Q

What is an entrepreneur?

A

A person who owns and runs their own business and takes risks.

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21
Q

What is an enterprise?

A

A willingness by an individual or a business to take risks, show initiative and undertake new ventures.

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22
Q

What is the difference between goods and services?

A

Goods are physical, tangible products like a car, a pair of scissors or a television set.
Services are non-physical, intangible products like a taxi journey, a haircut or a television programme

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23
Q

What is a competitive advantage and how it help a business?

A

An advantage a business has that enable it to perform better than its rivals in the market and which is both distinctive and defensible.

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24
Q

What is the difference between lateral thinking and blue skies thinking?

A

Lateral thinking is thinking differently to try and find new and unexpected ideas.
Blue skies thinking is a technique of creative thinking where participants are encourage to think of as many ideas as possible about an issue or a problem.

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25
What is an invention?
The discovery of new processes and potential new products, typically after a period of research.
26
What is innovation?
The process of transforming inventions into products that can be sold to customers
27
What is the difference between patent and copyright?
Patent is the right of ownership of an invention or process when it is registered with the government. Copyright is the legal ownership of material such as books, music and films which prevents these being copied by others.
28
What is a trademark?
The symbol, sign, or other features of a product or business that can be protected by law.
29
What is a calculated risk?
The probability of a negative event occurring.
30
What are financial objectives?
Targets expressed in money terms such as making a profit, earning income or building wealth.
31
List the words in SMART
Specific, measurable, achievable, realistic and timed.
32
What is revenue? What is the formula for total revenue? | A.K.A. sales revenue, turnover, sales turnover
The amount of income received from selling goods or services over a period of time. TR = P x Q Total Revenue = Price x Quantity
33
What is sales volume?
The number of items or products or services sold by a business over a period of time.
34
What is the difference between fixed costs and variable costs?
Fixed costs are costs which do not vary with the output produced such as rent, business rates, advertising costs, administration costs and salaries. Variable costs are costs which change directly with the number of products made by a business such as the cost of buying raw materials.
35
What is total cost and what is the formula for it?
All the costs of a business; it is equal to fixed costs plus variable costs. TC = FC + VC Total Costs = Fixed Costs + Variable Costs
36
What is profit?
Occurs when the revenues of a business are greater than its costs over a period of time. TR - TC = P
37
What is cash flow, inflow and outflow?
The flow of cash into and out of a business. The cash flowing into a business, its receipts. The cash flowing out of a business, its payments.
38
What is net cash flow?
The receipts of a business minus its payments | Inflows – Outflows = Net Cash Flow
39
What is insolvency?
When a business can no longer pay its debts.
40
What is cash flow forecast?
A prediction of how cash will flow through a business in a period of time in future.
41
What is the difference between opening and closing balance?
The amount of money in a business at the start of the month. | The amount of money in a business at the end of the month.
42
What is trade credit?
Where a supplier gives a customer a period of time to pay a bill (or invoice) for goods or services once they have been delivered.
43
What is stock?
Materials that a business holds. Some could be materials waiting to be used in the production process and some could be finished stock waiting to be delivered to customers.
44
What is the difference between long term and short term finance?
Sources of money for businesses that are borrowed or invested typically for more than a year e.g Mortgage, Venture Capitalist. Sources of money for businesses that may have to be repaid with immediately or fairly quickly, such as an overdraft, usually within a year.
45
What is share capital?
The monetary value of a company which belongs to its shareholders, for example, if five people each invest £10,000 into a business, the share capital will be £50,000.
46
What is the difference between shareholders and venture capitalists?
The owners of a company. An individual or company which buys shares in what they hope will be a fast growing company with a long term view of selling the shares at a profit.
47
What is a loan?
Borrowing a sum of money which has to be repaid with interest over a period of time, such as 1-5 years.
48
What is a security (or collateral)?
Assets owned by a business which are used to guarantee repayments of a loan; if the business fails to pay off the loan, the lender can sell what has been offered as security.
49
What is mortgage?
A loan where property is used as security.
50
What is a dividend?
A share of the profits of a company received by shareholders who own shares.
51
What is retained profit?
Profit which is kept back in the business and used to pay for investment in the business.
52
What is leasing? | What is overdraft facility?
Renting equipment or premises. Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn.
53
What is factoring?
A source of finance where a business is able to receive cash immediately for the invoices it has issued from a factor, such as a bank, instead of waiting the typical 30 days to be paid.
54
What is a marketing mix?
The combination of factors which help the business to take into account customer needs when selling a product – usually summarised as the 4 P's, which are price, product, promotion and place.
55
What is price?
The amount of money customers have to give up to acquire a product.
56
What is the product, who is it produced by?
A good or service produced by a business or organisation and made available to customers for consumption.
57
What is promotion?
Communication between the business and customer, making the customer aware that the product is for sale, telling or explaining to them what is the product, making the customers aware of how the product will meet the customers’ needs and persuading them to buy it for the first time or again.
58
What is the place?
The way in which a product is distributed – how it gets from the producer to the consumer.
59
What is a sole trader (proprietor)?
The only owner of a business which has unlimited liability.
60
What is the difference between unlimited and limited liability?
A legal obligation on the owner of a business to settle (pay off) all debts of the business. In law there is no distinction between what the business owes and owns and what the business owns and owes. When shareholders of a company are not personally liable for the debts of the company; the most they can lose is the value of their investment in the shares of the company.
61
What is HM revenues and customs (HMRC)?
The government authorities in the UK responsible for collecting tax.
62
What is VAT (Value Added Tax)?
A tax on the value of sales: it is paid by businesses to government.
63
What income tax and corporation tax?
A tax on the value of income earned by workers; this includes sole traders who have to pay income tax on their net earnings. C tax - A tax on the profits of limited companies.
64
What is National Insurance Contributions (NIC's)?
A tax on the earning of workers; Employers’ National Insurance contributions are paid by employers on the wages of their workers; employees and sole traders have to pay National Insurance contributions on their earnings.
65
What is customer service?
The experience that a customer gets when dealing with a business and the extent to which that experience meets and exceeds customer needs and expectations.
66
What is customer satisfaction?
A measure of how much products meet customers’ expectations.
67
Define Repeat purchases (or repeat business)
Orders or sales that occur from customers who have bought the product or service in the past.
68
What is a stakeholder?
An individual or a group which has an interest in and is affected by the activities of a business; stakeholders have an interest in how the business operates and whether or not it is successful.
69
What is budgeting?
Budgeting is a prediction of how much money a business will receive and spend.
70
what is budgeting control?
Budgetary control is when budgeted figures are compared with actual figures.
71
Gross profit formula and definition?
revenue - cost of sales= gp Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.
72
which of the following are external or internal sources of capital?
Internal: reinvested profits, share capital. External: bank loan, mortgage.

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