Business In The Real World

• Aim

  The intention to reach a goal.
• Business plan

  A detailed statement of how the business intends to operate, either at start-up or during a given period of time.
• Competition

  The rivalry between businesses looking to sell their goods/services in the same market.
• Cost

  The money spent by a business on goods and services.
• Customer

  Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose.
• Customer satisfaction

  Whether customers are pleased with the goods/services they receive; whether they would purchase again.
• Demand

  The quantity of a particular product that will be bought at particular price over a specific time.
• Directors

  The people who are elected by the shareholders to run the business on their behalf.
• Diseconomies of scale

  When a business grows too large, leading to a possible increase in unit cost.
• Dividend

  A portion of the after-tax profit that is paid to shareholders according to the number of shares they own.
• E-commerce

  Business transactions carried out electronically on the internet.
• Economies of scale

  The cost advantage of producing on a large scale. As output increases the unit cost decreases.
• Employees

  Individuals who work full time or part time for the business; they have a contract of employment detailing their duties and rights.
• Enterprise

  A unit of economic organization or activity
• Entrepreneur

  A person who has the vision to use initiative to make business ideas happen, managing the resources and risks.
• Ethical objectives

  A business' goals that relate to fair business practice or moral guidelines and make a positive contribution to the business' reputation.
• Ethics

  The moral principles that guide how a business operates.
• Expansion

  The process of increasing a business' size.
• Export

  Good/service sold to a customer in another country.
• External growth

  The growth of a business by joining with another by merger or takeover.
• Factors of production

  The elements that combine in the production process: land, labour, capital and enterprise.
• Fixed costs


  The costs that stay largely the same, regardless of the business' output.
• Franchising


  The sale of the rights to use/sell a product by a franchisor to a franchisee.
• Gap in the market

  An opportunity for a new business (or expansion) which may meet a need that is not being met.
• Goods

  Items that are produced from raw materials for sale to businesses or consumers.
• Growth

  A business' increase in size. Methods include: asset value, employees, market share, markets, profits and sales.
• Import

  Good/service bought from a supplier in another country.
• Integration

  Two or more businesses join together.
• Limited liability

  The owners are not responsible for the debts of the business. The limit of their liability for the business' debts is the amount they invested.
• Local community


  The individuals, other businesses and organisations that are located close to the business. The business interacts with these groups.
• Location

  The site of a business and the reasoning behind the choice of site.
• Loss

  Where expenditure is greater than income.
• Market

  Where those wishing to buy goods/services make contact with those who have them to sell.
• Market share

  The proportion of the whole market for a product that is held by the business.
• Mergers

  When two or more businesses agree to join together.
• Not-for-profit organisations

  Associations, charities, co-operatives or voluntary organisations set up to further non-monetary ideals such as cultural, educational, religious and public service.
• Objective

  A specific statement that defines a precise goal that can be measured and delivered within a given time.
• Opportunity cost

  The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
• Organic growth

  A business grows by increasing its output, by increasing its customer base or by developing new product(s).
• Outsourcing

  Contracting another business to carry out some of the business' activities, often to reduce costs.