Small Business Terms

Question 1

Added value

Answer 1

The increased worth that a business creates for a product;it is the difference between what a business pays its supplier and the price that it is able to charge for the product or service

Question 2

Competitive advantage

Answer 2

An advantage that enabled the business to perform better than its rivals in the market and which is both distinctive and defensible

Question 3

Cash flow

Answer 3

The flow of cash in and out of the business

Question 4

Net cash flow

Answer 4

The receipts of a business minus its payments

Question 5

Customer satisfaction

Answer 5

A measure of how much products meet customers’ expectations

Question 6

Customer service

Answer 6

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

Question 7

Fixed cost

Answer 7

Cots which do not vary with the output produced such as rent,business rates,advertising costs,administration costs and salaries

Question 8

Gap in the market

Answer 8

Occurs when no business is currently serving the needs of customers for a particular product

Question 9

Income tax

Answer 9

A tax on the value of income earned by workers; this includes sole traders who have to pay income tax on their bet earnings

Question 10

Market gap

Answer 10

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 quantity

Question 11

Personal specification

Answer 11

A profile of the type of person needed for a job-their skills and qualities

Question 12

Outflow

Answer 12

The cash flowing out of a business,its payments

Question 13

Price sensitive

Answer 13

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

Question 14

Qualitative data

Answer 14

Information about opinions,judgements and attitudes

Question 15

Quantitive data

Answer 15

Data that can be expressed as numbers and can be statically analysed

Question 16

Raw material costs

Answer 16

Raw materials are a large proportion of the total cost,so a change in their prices have a big impact on his costs and his profits

Question 17

Interest rate

Answer 17

The percentage reward or payments over a period if time that is given to savers or paid by borrowers on savings or loans

Question 18

Repeat purchase

Answer 18

Orders or sales that occur from customers who have brought the product or service in the past

Question 19

Revenue

Answer 19

The amount of income received from selling goods or services over a period of time

Question 20

What is the bank of England.

Answer 20

Central bank for the uk. Its role is to control the banking system and be the banker to other dance.

Question 21

What is the business cycle?

Answer 21

Fluctuations of the level of economical activity .

Question 22

What are perceptual maps?

Answer 22

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

Question 23

What is price sensitive?

Answer 23

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

Question 24

What is corporation tax?

Answer 24

Tax on the profit of limited companies

Question 25

What is deliberate creativity?

Answer 25

The intentional creation of new through recognised and accepted techniques.

Question 26

What is desk research?

Answer 26

It is information that has already been gathered such as sales records, government statistics or reports from market research groups.

Question 27

What are franchises?

Answer 27

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

Question 28

What is a franchisee?

Answer 28

A business that agrees to manufacture, distribute or provide a branded products, under license of a franchisor

Question 29

What is a franchisor?

Answer 29

Business that gives the franchisees the right to sell its products in return for a fixed sum of money.

Question 30

What is innovation?

Answer 30

The process of transforming inventions into products that can be sold to customers.

Question 31

What is invention?

Answer 31

The discovery of new processes and potential new products, typically after a period of respect.

Question 32

What is limited liability?

Answer 32

When shareholders of a company are not personally liable for the debts of the company: the most they can loose is the value of their investment in the share of the company.

Question 33

What is marketing mix?

Answer 33

The combination of factors which help the business to take into account the customer needs when selling a product- summarised as the 4 p’s

Question 34

What is primary data?

Answer 34

Gathering of data and new information which has not been collected before.

Question 35

What is secondary data?

Answer 35

Information that has already been gathered such as sales records, newspaper articles or reports from market research groups.

Question 36

What is share capital?

Answer 36

The monetary value of a company which belongs to its shareholders.

Question 37

What is a sole trader?

Answer 37

The only owner of a business that has unlimited liability.

Question 38

What is a stakeholder?

Answer 38

Individual of group which are interested and are affected by the activity of a business; they hVe an interest in weather or not the business is successful

Question 39

What is surplus?

Answer 39

When the demand for a good or service is less than the available supply. When a shortage exists prices tend to rise.

Question 40

What is trade credit?

Answer 40

Where a supplier gives a customer a period of time to pay a bill for good/ services once they have been delivered

Question 41

What is unlimited liability?

Answer 41

Legal obligation on the owner of a business to settle all debts if a business.

Question 42

What is a venture capitalist?

Answer 42

Individual of company that buy shares in what they hope will become a fast growing business with a long term view of selling the shares if the profit.