OCR CTEC Business Unit 1

• Business activities


  the activities a business will take part in with the main purpose of making profit
• Retail customer


  spending their own money to buy products
• business customers


  purchasing a product of service for production of other products
• private sector


  a business that run on their own terms and aren't owned by the government
• public sector


  owned by the government but without the interest of making profit and funded by taxation
• third sector


  not owned by the government and doesn't want to make profit so example a charity
• NPO (non profitable organisation)

  a organisation that doesn't make any profits but is set to aim government needs
• Sole trader


  a business owned by one person
• Partenrship


  a business owned by 2 or more people
• private limited company (LTD)


  a company that can privately hold data, usually a small company
• public limited company (PLC)


  this is usually a government ran company that has to share its profits and other legal information
• charity


  this is a NPO but not ran by the government, set to help out people and not make profit
• franchise


  this is where someone can own a building under a companies name but have to sell the products they say and some of the profits go back to the HQ of the company
• worker copperative


  this is hen the workers of the company have a decision on what happens in the business and not just the owners
• community interest companies (CIC)

  this is a government owned company that do stuff to repair and help the community
• public sector organisations


  owned by the government but without the interest of making profit
• unlimited liability


  The owner is personally and fully responsible for all losses and debts of the business
• limited liability


  A form of business ownership in which the owners are liable only up to the amount of their individual investments.
• diseconomies of scale


  the property whereby long-run average total cost rises as the quantity of output increases
• legal status


  state constitutions are the supreme law of the state and only subordinate to the US constitution
• liability


  An amount owed by a business or a claim against the assets
• funding


  money given by a government or organization for an event or activity
• enterprise


  A business organization in such areas as shipping, mining, railroads, or factories.
• Entrepreneur


  A person who organizes, manages, and takes on the risks of a business.
• venture capital


  Money that is invested in new or emerging companies that are perceived as having great profit potential
• SMART objectives


  Specific

  Measurable

  Achievable

  Relevant

  Time-bound
• business aims


  a summary of what the business wants to achieve in the future
• Recession


  A slowdown in a nation's economy
• economies of scale


  factors that cause a producer's average cost per unit to fall as output rises
• Unique selling point (USP)

  Any aspect of or characteristic of a product that differentiates it from the competition. Firms will often want to stress this in their marketing.
• Statement of Financial Position

  A financial statement that describes an individual or family's financial condition on a specified date by showing assets, liabilities, and net worth
• Income Statement


  A financial statement showing the revenue and expenses for a fiscal period.
• Balance Sheet


  A financial statement that reports assets, liabilities, and owner's equity on a specific date.
• profit and loss account

  a financial statement showing revenue, expenditure and profit during a given period
• Cash flow forecast


  forecast that predicts the cash inflows and outflows in future periods, usually months or quarters
• Pricing Strategy


  A long-term approach to setting prices for the firms' products.
• psychological pricing


  pricing goods and services at price points that make the product appear less expensive than it is
• loss leader pricing


  the pricing policy of setting prices very low or even below cost to attract customers into a store
• cost-plus pricing


  adding a standard markup to the cost of the product
• premium pricing


  Pricing the highest-quality or most versatile products higher than other models in the product line