Business Vocab (As Level)

• Consumer goods are the physical and tangible goods sold to the general public
• Consumer services are the non-tangible products sold to the general public
• Capital goods are the physical goods used by the industry to aid in the production of other goods and services
• Creating value is increasing the differences between the cost of purchasing bought-in materials and the price the finished goods are sold for
• Added value is the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for
• Opportunity cost is the benefit of the next most desired option which is given up
• Entrepreneur is someone who takes the financial risk of starting and managing a new venture
• Social enterprise is a business with mainly social objectives that reinvest most of its profits into benefiting society rather than maximizing returns to the owners.
• Triple bottom line are the three objectives of social enterprises, including people, planet and profit
• SMART objectives:

  • Specific
  • Measurable
  • Achievable
  • Realistic and Relevant
  • Time-specific
• Primary sector business are firms that extract natural resources so that they can be used and processed by other firms
• Secondary sector business are firms that manufacture and process products from natural resources
• Tertiary sector business are firms that provide service to consumers and other businesses
• Quarternary sector business are part of the tertiary sector but are intellectual or knowlegdge-based services
• Public sector are comprises organizations that are accountable to and controlled by the central or local government
• Private sector are comprises businesses that owned and controlled by individuals or groups of individuals
• Mixed economy are economic resources are owned and controlled by both private and public sectors
• Free-market economy are economic resources are owned largely by the private sector with very little state in
• Command economy are economic resources are owned, planned and controlled by the state
• Sole trader is a business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all the profits
• Partnership is a business formed by two or more people to carry on a business together with shared capital investment and usually shared responsibilities
• Limited liability is the only liability - or potential loss - a shareholder has if the company fails is the amount invested in the company, not the total wealth of the shareholder
• Private limited company is a small to medium sized business that is owned by shareholders who are often members of the same family, this company cannot sell shares to the general public.
• Share is a certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights.
• Shareholder is a person or institution owning shares in a limited company
• Franchise is a business that uses the name, logo and trading systems of an existing business
• Public limited company is a limited company, often a large business, with the legal right to sell shares to the general public - share prices are quoted on the national stock exchange
• Public corporation is a business enterprise owned and controlled by the state - aka nationalised industry
• Revenue is the total value of sales made by a business in a given time period
• Capital employed is the total value of all long-term finance invested in the business
• Market capitalisation is the total value of a company's issued shares
• Market share are the sales of the business as a proportion of total market sales
• Internal growth is te expansion of a business by means of opening new branches, shops or factories
• Mission statement is a statement of the business's core aims, phrased in a way to motivate employees and stimulate interest by outside groups
• Corporate social responsibility - this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment
• Management by objectives is a method of coordinating and motivating all staff in an organisation by diving its overall aim into specific targets for each department, manager and employee
• Ethical code or code of conduct is a document detailing a company's rules and guidelines on staff behaviour that must be followed by all employees
• Stakeholders are individuals or organisations who have an interest in the success of a business
• Stakeholder concept is the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders
• Corporate social responsibility is the concept that accepts that businesses should consider the interests of society in their activities and decisions, beyond the legal obligations that they have