business

• entrepreneur an individual who has the idea for a new business, starts it up and carries most of the risk but benefits from the rewards
• opportunity cost the value of the next most desired option that is given up
• multinational business a business organisation that has its headquarters in one country, but with operating branches, factories and assembly plants in other countries
• intrapreneur a business employee who takes direct responsibility for turning an idea into a profitable new product or business venture
• trade credit the loan extended by one trader to another when the goods and services are bought on credit
• debtors a person, country or organisation who owes money to another entity
• credit the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future
• business plan a written document that describes a business, its objectives, strategies, target market and its financial forecasts
• private limited company a business that is owned by shareholders who are often family; this company cannot sell shares to the general public
• initial public offering (IPO) an offer to the public to buy shares in a public limited company
• public limited company (plc) a company whose shares are traded on a stock exchange and can be bought and sold by the public
• primary sector business activity Deals with production of tangible goods mainly consisting of raw materials or goods directly consumed at production
• secondary sector business activity Deals with changing outputs produced in the primary sector(raw materials) to finished products through manufacturing or processing
• tertiary sector business activity Deals with provision of services to consumers or other businesses e.g. hotel accommodation
• quaternary sector business activity Deals with provision of information and technology related services, like computing, web design, ICT etc.
• public sector organizations accountable to and controlled by central or local government // an area of economic activity where a majority of businesses are controlled and owned by the government
• private sector businesses owned and controlled by individuals or groups of individuals
• mixed economy when economic resources are owned and controlled by both private and public sectors
• free-market economy when economic resources are owned largely by the private sector with very little state intervention
• command economy when economic resources are owned, planned and controlled by the state
• public corporation business enterprises owned and controlled by the state also known as nationalized industry
• sole trader a business where one person provides permanent finance, has full control of the business and can keep all the profits
• unlimited liability owners have full legal responsibility for the debts of the business
• partnership businesses formed by two or more people who carry it on together with shared capital investment, profits and responsibilities
• limited liability the only potential loss a shareholder has, if the company fails, is the amount invested into the company, not the total wealth of the shareholder
• share a certificate confirming part-ownership of a company and entitling the shareholder owner to dividends and shareholder rights
• shareholder a person or institution owning shares in a limited company
• memorandum of association states the name of the company its head office address where it can be contacted, the maximum share capital that authorization is sought out for and the declared aims of the business
• articles of association a document that covers the internal workings and control of the business, names of directors and the procedures to be followed at meetings
• co-operative a jointly owned business operated by members for their mutual benefit to produce or distribute goods/services
• franchise the legal right to use the name, logo and trading systems of an existing successful business
• franchiser a person or business that sells the rights to open stores and sell products/services under the brand name and identity
• franchisee a person or business who buys the rights from the franchiser to operate the franchise
• joint venture 2 or more businesses agree to work closely together on a project and create a separate business division to do so
• social enterprise a business with mainly social objectives that re-invests most of its profits into benefiting society instead of maximizing returns to owners
• revenue the total value of sales made during the trading period = selling price x quantity sold
• capital employed total value of all long-term finance invested in the business
• market capitalization the total value of a company's issues shares
• market share sales of the business as proportional total market sales = (ttl sales of business/ttl sales industry) x100
• organic (internal) growth expansion of a business by opening new branches, shops or factories