Unit 1: Setting Up A Business Flashcards Preview

GCSE AQA Business Studies Unit 1 and Unit 2 > Unit 1: Setting Up A Business > Flashcards

Flashcards in Unit 1: Setting Up A Business Deck (111):
1

Business

An activity that requires the organisation of resources to achieve a reward, whilst running a risk

2

Entrepreneur

An individual with an idea or business

3

Gap in the market

A business opportunity that is either a completely new idea or adds something different to an existing product or service.

4

Franchise

The legal right to use the name and logo of an existing firm and sell the same products.

5

Business Aim

A stated target for the future. For example, a new business may have the aim to survive its first year of trading.

6

Business Objective

A clearly defined target for a business to achieve over a certain period of time.

7

Growth

An increase in turnover(sales), market share or profit.

8

Profit

What is left after costs have been deducted from revenue.

9

Profit Margin

Profit made as a proportion of sales revenue.

10

Sales

The amount sold or the value sold.

11

Market Share

The proportion of total market sales sold by one business.

12

Customer Satisfaction

How happy the customer is with the product or service.

13

Ethics

The moral questions on which decisions are made and the impact the business has on its internal and external environment.

14

Turnover

The value of sales made during the trading period, also called revenue.

15

Stakeholder

An individual or group with an interest in a business, such as employees, customers, managers, shareholders, suppliers, competitors and the local community.

16

Business Plan

A statement showing how a business sets out to achieve its aims and objectives.

17

Funding

The capital provided for the various stages of business growth by different sources of finance, either on a short- or long-term basis.

18

Forecast

A technique where the business attempts to estimate future sales, or other financial variables.

19

Risk

The potential for loss but rewards in business make it a calculated gamble.

20

Uncertainty

Not knowing the future, or what is going to happen.

21

Sole Trader

The most common form of business organisation, often just one person

22

Partnership

The simplest way two or more people can be in business together where partners are jointly and personally responsible for debts.

23

Unlimited liability

Unincorporated businesses, such as sole traders and partnerships, have unlimited liability, which means that the owners are responsible for all the business's debts.

24

Incorporation

The process of forming limited liability company such as a private limited company or PLC.

25

Limited Liability

Investors (shareholders) in a limited company can only lose their investment in the business if it fails; they cannot be forced to sell assets to pay off the firm's debts.

26

Technology

In relation to business location, this refers to the use of e-technology, such as the Internet and email, to create a virtual market between the business and the consumer.

27

Logistics

The process of buying, managing and delivering goods, from the point of manufacture to the end customer.

28

Market Research

Research that enables a firm to find out about its market, its customers and its potential customers

29

Primary Research

Gathering new information specifically for the purpose identified by the business

30

Secondary Research

Research that uses information that has already been gathered for another purpose

31

Questionnaire

A set of questions designed to discover information relating to a product or service. These may be left for consumers to complete themselves, carried out by using face-to-face interviews by researchers or from the basis of a telephone or postal survey

32

Internet Research

Using information that has already been published on the internet to gather information about the market for a firm's products or services

33

Telephone Survey

A series of set questions delivered over the telephone to consumers as a method of primary research

34

Supplier Feedback

Gathering information from companies that supply products or services on their forecasts for what is likely to happen in the market in the future

35

Customer Feedback

Formal or informal responses from customers to the product or service offered by a business

36

Focus Group

In-depth discussion with a small group of consumers (8-10), which probes their feelings towards a product or service.

37

Marketing Mix

The 4 major variables for which decisions must be made when marketing a product

38

Product

The service or physical good being sold by the company

39

Price

The amount charged by a business for its product or service

40

Promotion

All the ways a business communicates to consumers with the aim of selling products.

41

Place

The methods used by a firm to sell its products or services to consumers

42

Product range

The collective term given to all the products made or sold by a business

43

Product differentiation

Attempting to make your products stand out from those of your rivals through advertising, design or different product features

44

Demand

The quantity that consumers are willing and able to buy at the current price level

45

Marketing budget

The amount to be spent on marketing and promotion over a certain period of time

46

Advertising

Communication to consumers, using television and other media, to encourage them to buy a product

47

Publicity

Gaining press coverage for your business

48

Word-of-mouth recommendations

Getting customers to talk to their friends and family about your product or service

49

Direct mail

Sending promotional material directly to consumers

50

Personal selling

Employing a person to visit potential customers to persuade them to buy your goods and services

51

Website

Many businesses now have their own website on the Internet to provide information about their business for consumers

52

Banner

An Internet advert shown on another firm's website in the form of horizontal bar across the page

53

Pop-up

An Internet advert that 'pops-up' in a new window when visiting another company's website

54

Channel of distribution

The method used to transfer goods or services from the producer to the final consumer

55

e-Commerce

Transactions between people and business carried out entirely via the Internet

56

Wholesaler

Buys large quantities of a product from producers and break them down into more manageable batches for retailers or consumers

57

Retailers

Offer consumers a convenient and comfortable environment in which to buy products

58

Profit

What is left after costs have been deduced from revenue

59

Loss

When revenue is less than costs

60

Costs

The expenses a business pays for in producing goods and services

61

Revenue

The amount of money a business receives from selling goods or services

62

Cash

Money that the business has available to it straight away, such as money in its bank account

63

Forecast

A technique where the business attempts to estimate

64

Cash Flow Forecast

A prediction of a business's future cash inflows and outflows, showing the closing balance

65

Bank Loan

Finance provided by the bank that will be paid back over a set period

66

Loan From Friends and Family

Finance provided by friends or family where the interest rate and repayment periods are agreed with them

67

Overdrafts

A flexible arrangement that allows a business to spend more money than it has in its bank account, as and when it needs the finance

68

Mortgage

Long-term finance loan for purchasing a building

69

Trade Credit

Suppliers who allow debts for goods and services to be paid one or two months after delivery

70

Grant

Money given to a business by a government or organisation

71

Net Cash Flow

Difference between cash in and cash out of a business over a time period

72

Opening balance

The money the business has at the start of the month. It is the closing balance from the previous month.

73

Closing balance

The amount of cash the business has at the end of each month

74

Recruitment

Attracting people to apply for a job vacancy

75

Part-time Workers

Working for a proportion of the full working week

76

Internal Recruitment

Appointing an existing employee of the business to fill a vacancy

77

Full-time Workers

Working for the normal full working week

78

Wage

When an employee is paid a fixed amount for each hour or the day they work

79

Salary

When a worker is paid a fixed amount per month or year, no matter what hours they work

80

Pension

Payments made to retired workers in addition to the state pension

81

Non-Monetary Rewards

Rewards to employees that do not involve the direct payment of money to them

82

Commission

When the employee gets a percentage of the amount they sell

83

Equal Pay Act 1970

Men and women should be paid the same for the same job.

84

Minimum Wage Act 1998

The minimum amount that a business is allowed to pay a worker per hour

85

Race Discrimination Act 1976

A business can not discriminate against a person in the workplace based upon their race

86

Disability Discrimination Act 1995

A business can not discriminate against a person in the workplace based upon their disability

87

Maternity Pay

Pay given to expectant mothers for having a child

88

Paternity Pay

Pay given to expectant fathers for having a child

89

Sick Pay

Pay given to workers for being off sick (anything longer than 3 days requires a doctor's notice)

90

Holiday

Length of time a worker is allowed off work on full pay

91

Health and Safety Act

Employees have the right to work in a safe and healthy environment

92

Job production

Making one-off, specialised products for each customer.

93

Batch production

Groups of identical items that pass through different stages of the production process at the same time.

94

Operational efficiency

Producing goods and services to an acceptable standard with as few resources as possible to keep costs per unit low.

95

Unit costs

The average cost of making each unit.

96

Specialisation

Work is divided into separate tasks or jobs that allow workers to become skilled at one of them.

97

Information communication technology

The use of electronic technology to gather, store, process and communicate information.

98

Robot

A computer-controlled machine able to perform a physical task.

99

Computerised stock-control programs

The use of computers to keep records of all stocks and recorder necessary stock automatically.

100

Computer-aided design

Using computer-based tools to design products, such as buildings, cars and clothes.

101

Quality product

A good or service that meets customers' expectations and is therefore 'fit for purpose'

102

Customer expectations

The minimum quality standards for a product or service that is acceptable to consumers.

103

Quality assurance

A system of agreeing and meeting quality standards at each stage of production.

104

E-commerce

The buying and selling of goods and services over the internet.

105

Customer Service

Providing services to customers before, during and after purchase to standards that meet their expectations

106

Customer protection

Laws that protect the interests of consumers when buying goods or services

107

Sales of Goods Act 1979 and Supply of Goods and Services Act 1982

Goods and services must be as described, fit for purpose and made to a satisfactory quality

108

Consumer Protection Act 1987

Compensation must be paid to a consumer who suffers injury or damage to property when correctly using the good

109

Competition Act 1998

Businesses must not agree to fix prices at a high level with other similar businesses

110

Consumer Protection 2000

Protects consumers who purchase goods not in person and so businesses must give clear information and a cooling off period

111

Consumer Protection from Unfair Trading Regulations 2008

Advertisements must not be misleading or deceive and allow consumers to check price using comparison websites