Business paper 2

• Goods


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


  An action that is carried out to fulfil a need or demand in return for payment
• Customer


  Individuals, businesses or organisations that purchase goods/services and make decisions about which supplier to choose
• Factors of Production


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


  Physical site on which a business is based an the natural resources required
• Labour


  The skills available and number of workers employed by a business
• Capital


  Investment in equipment required to produce/run a business such as factories and machinery
• Enterprise


  The skills of the people involved in business to identify business opportunities & bring resources together
• Opportunity Cost


  The cost of making one choice concerning the use of limited resources at the expense of an alternative choice
• Primary Industry


  A business that extracts the earth's natural resources
• Secondary Industry


  A business that uses raw materials to manufacture goods or construct items
• Tertiary Industry


  A business that provides services to consumers or other businesses
• Chain of Production


  The stages that a product goes through to be ready to be sold to customers
• Interdependency


  Businesses in a chain of production rely on one another
• Deindustrialisation


  Where there is a decline in manufacturing in a country and an increase in tertiary businesses
• Business Environment


  All the factors outside of a business that can affect it
• Owners


  Individuals who own the business or own a share(s) in it, in return for the right to decision making and profits, balanced with the risks involved
• Sole Trader


  A business that is owned and operated by one person
• Liability


  The extent of the owner's/owners' responsibility for the debts of the business
• 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
• Unlimited Liability


  When the owner(s) are responsible for all the debts of the business. Their personal funds would be used to settle the business' debts if the business' funds were insufficient
• Partnership


  A business that is owned and operated by a group of between 2 or more people
• Private Limited Company (Ltd)


  A business that is owned by shareholders; the shares are not available to the general public. Shareholders have limited liability
• Share(s)


  The units of the business that are available for sale to investors
• Public Limited Company (Plc)


  A business that is owned by shareholders. Anyone can buy shares in the business. Shareholders have limited liability
• Share issue


  New shares in a business made available for the public to buy
• 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. Profits/losses are retained/absorbed
• Dividend


  A proportion of the after-tax profit that is paid to shareholders according to the number of shares they own.
• Aim


  The intention to reach a goal
• Objective


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


  The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs
• Profit Maximisation


  A business' ability to make maximum profit with low operating expense
• Growth


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


  The proportion of the whole market for a product that is held by the business
• Customer Satisfaction


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


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


  A business' goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers
• Stakeholders


  Those with an interest in the way that a business operates
• Shareholders


  Those people who own shares in a limited company; each shareholder is a part owner of the business
• Location


  The site of a business and the reasoning behind the choice of site