Definitions

• Business Enterprise


  Any operation established to produce or supply goods/services desired by consumers generally with a view to making profit.
• Factors of Production


  The inputs of land, labour, capital and enterprise required to produce or supply goods/services.
• Entrepreneur


  Someone who starts and runs a business and has the responsibility of the risks involved.
• Entrepreneurial Characteristics


  These are common traits found in successful entrepreneurs and examples may include innovative, visionary, flexibility, knowledgeable, risk taker, decisiveness, goal orientated, motivated and committed.
• Adding Value


  A business will add value to raw materials used in its production process so that there will be a significant difference between the cost of purchasing raw materials and the selling prices of the finished article.
• Competitive Advantage


  A favourable situation that a business organisation has over its rivals arising from a marketing opportunity such as price or cost or both. It strengths and positions a business better within the business environment.
• Sole Trader


  A business organisation which has a single owner and in which there is no legal distinction between the owner and the business. The owner receives all the profits and has unlimited responsibility for all losses and debts.
• Partnership


  A business relationship of two or more entities conducting business for mutual benefit. They manage the business and share equal responsibility for the company's profits and losses, and its debts and liabilities.
• Deed of Partnership


  A binding legal document which states the formal rights of partners in the business.
• Sleeping Partner


  A partner who contributes capital and shares in profits/losses but does not participate in decision making.
• Limited Partnership


  A partnership which has at least one ordinary partner who has unlimited liability. A limited partner contributes capital, share in profits but has limited liability. A limited partner cannot participate in decision making.
• Limited Company


  A business organisation which has separate legal entity from those of its owners. The liability of the members of the company is limited to what they have invested to the company.
• Shareholders


  Investors who have bought a share in the company.
• Limited Liability


  Each shareholder is only liable for the original amount of money invested in the business.
• Franchise


  An agreement between two parties, which gives one party the rights to market a product or service using the trademark of another business.
• Social Enterprise


  A business venture established to address a social issue within a community or to improve the quality or life for citizens or the environment. All profit made is reinvested to help achieve the social objective of the business.
• Stakeholder Groups


  Specific groups of people who have a genuine interest in the activities of a particular business and who will be affected by the activities of the business. Examples include owners, employees, customers, lenders, government, suppliers, management and community.
• Consumer Goods and Services Market


  This is where households purchase the goods/services they desire and businesses try to meet their demand by selling the goods/services in store, online etc.
• Capital Goods Market


  This in an industrial market selling tangible goods required by businesses who supply the consumer goods market. Items include machinery, equipment, vehicles and tools.
• Labour Market


  This is where those seeking work can interact with employers who are competing to hire them.
• Demand


  The desire to own anything, the ability to pay for it, and the willingness to pay.
• Supply


  The quantity of products which suppliers make available to the market at any given price.
• Equilibrium Price


  The price at which the quantity demanded by consumers is equal to the quantity supplied.
• Mass Market


  A broad, non-targeted, non-segmented market.
• Niche Market


  A business aims their product at a narrow or focused subset of a larger market sector.
• Quality


  Providing goods/services that satisfy the consumers needs and expectations.
• TQM (Total Quality Management)


  A culture of quality embraced by everyone within an organisation. The emphasis is on 'getting it right' first time to make the organisation more cost efficient and to build up a good reputation for high quality products/services.
• Quality Assurance


  Processes established throughout the organisation to ensure that all activities associated with producing/supplying goods or services meet the highest possible standard of quality for customers.
• Quality Control


  Operational checks carried out at various stages of the products manufacture to ensure all errors are eliminated and the highest standards of quality has maintained.
• ISO 9000


  A series of quality standards developed by the International Organisations for Standardisation that are designed as a guide to ensure quality of products, services and management in a wide range of organisations.
• Productivity


  This is a measure of how efficient a firm is in providing its product/service.
• Investment


  This refers to the purchase of capital goods which are used to produce further wealth. It can also refer to expenditure by a business that is likely to yield a return in the future e.g. research and development.
• Job Production


  A method of production which involves employing all factors to complete one unit of output at a time to customer specifications.
• Batch Production


  A method of production which involves completing one operation at a time on all units before performing the next.
• Flow Production


  Very large production of a standard product, where one unit of production is performed continuously, one after the other, usually on a production line.
• Business Structure


  The way in which a business is organised.
• Hierarchy


  This refers to the order or levels of management in a business from the lowest to the highest.
• Chain of Command


  The system of reporting relationships within the organisation.
• Span of Control


  The number of subordinates working under a superior.
• Organisation Chart


  A diagram illustrating the structure of an organisation.