Business 9609

• Entrepreneur


  An individual who has the idea for a new business, starts it up and carries most of the risks but benefits from the rewards
• Customer


  An individual consumer or organization that purchases goods or services from a business
• Consumer


  An individual who purchases goods and services for personal use
• Consumer goods


  • Durable consumer goods (e.g. cars, washing machines)
  • Non-durable consumer goods (e.g. food, drinks, sweets)
• Consumer services


  The non-tangible products sold to consumers that are not intended for resale (e.g. hotel accommodation, insurance services, train journeys)
• Factors of production


  • Resources needed by business to produce goods or services
• Capital goods


  The physical goods used by industry to aid in the production of other goods and services, such as machines and commercial vehicles
• Enterprise


  The action of showing initiative to take the risk to set up a business
• Adding value


  Increasing the difference between the cost of bought-in inputs (materials) and the selling price of the finished goods
• Added value


  The difference between the cost of purchasing bought-in inputs (materials) and the selling price of the finished goods
• Branding


  The process of differentiating a product by developing a symbol, name, image or trademark for it
• Opportunity cost


  The next most desired option that is given up
• Multinational business


  A business organization 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
• Business plan


  A written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts
• Private limited company


  A business that is owned by shareholders who are often members of the same 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
• Business activity sectors


  • Primary sector (e.g. farming, fishing, oil extraction)
  • Secondary sector (e.g. manufacturing, processing)
  • Tertiary sector (e.g. retailing, transport, insurance, banking, hotels, tourism)
  • Quaternary sector (e.g. computing, web design, ICT, management consultancy, R&D)
• Economic systems


  • Public sector
  • Private sector
  • Mixed economy
  • Free-market economy
  • Command economy
• Public Corporation


  A business enterprise owned and controlled by the state - also known as a nationalized industry
• Sole Trader


  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 of the profits
• Unlimited Liability


  Business owners have full legal responsibility for the debts of the business
• Limited Liability


  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
• Share


  A certificate confirming part-ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights
• Shareholder


  A person or institution owning shares in a limited company
• Memorandum of Association


  This states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and the declared aims of the business
• Articles of Association


  This document covers the internal workings and control of the business, the names of directors and the procedures to be followed at meetings
• Cooperative


  A jointly owned business operated by member for their mutual benefit, to produce or distribute goods or services- as in consumer's cooperatives or farmers cooperatives
• 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 right to open stores and sell products or services, using the brand name and brand identity
• Franchisee


  A person or business that buys the right from the franchiser to operate the franchise
• Joint Venture


  Two or more businesses agree to work closely together on a particular 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 rather than maximizing returns to owners
• Revenue


  The total value of sales made during the trading period = selling price x quantity sold
• Capital Employed


  The total value of all long-term finance invested in the business
• Market Capitalization


  The total value of a company's issued shares
• Market Share


  Sales of the business as a proportion of total market sales
• Organic Growth


  Expansion of a business by means of opening new branches, shops or factories (also known as internal growth)
• External Growth


  Business expansion achieved by integrating with another business by either merger or takeover