Business

• Dynamic nature of Business


  Business is ever-changing because external factors (technology) are changing
• Enterprise


  Personal characteristics of questioning and initiative that are shown by employee or entrepreneur
• Venture capital


  Capital provided by an investor willing to take a risk in return for share in later profits
• Demand


  Number of units customers want and can buy
• Obsolete


  Product or service with declined sales because customers have found something new
• Competitive advantage


  Feature of product/ service that make it stronger than competitors
• Lack of financial security


  Uncertainty for business owner about family income and assets
• Unique selling point


  Original feature of a product, competitors aren't offering
• Value added


  Difference between selling price and cost bought for goods and services
• Sales revenue


  Total value of sales made within a period of time
• Services


  Providing useful ways to help people live lives (Shops, Restaurants)
• Human resources


  Used by organisations to refer to employees
• Risk Taking


  Making decisions where unknown factors or chances of failure may happen
• Convenience


  Make life easier for customers by great location or product that saves time
• Primary research


  Research conducted first hand, and is tailored to a company's specific needs
• Qualitative data


  In depth research into opinions and views of a small group of customers (e.g. why customers buy what they buy)
• Quantitative data


  Factual research among a large sample of people to provide statistically reliable results
• Secondary research


  When a company uses research that has been carried out by someone else for general purposes
• Lifestyle


  Group people by characteristics/ tastes
• Market segmentation

  • Location
  • Income
  • Lifestyle
  • Age
  • Other demographic factors
• Competitive Environment


  Strength of competition between companies
• Innovative


  New, original, product or process
• SMART objectives


  Targets that are Specific, Measurable, Achievable, Realistic, Timebound
• Fixed costs


  Costs that don't vary because output varies
• Interest


  Charges made by banks for the cash they lent to a business
• Interest rate


  Annual cost of a loan to a borrower
• Profit


  Difference between revenue and total costs

  If negative the business is making a loss
• Total costs


  All costs for a set period of time
• Variable costs


  Costs that vary as output varies
• Break - even


  Level of sales where total costs are equal to to total revenue
• Margin of safety


  Amount by which demand can fall before a business starts making losses
• Cash flow


  Movement of money into & out the firms bank account
• Insolvency


  Business lacks cash to pay debts
• Overdraft Facility


  Agreed maximum level of overdraft
• Overdraft


  Lets business borrow money through an account by taking more money than there currently is in the account
• Cash flow forecast


  Estimating likely flows of cash over the coming months
• Negative cash flow


  Cash outflows are greater than cash inflows
• Net cash flow


  Cash in minus cash out over a monthly period
• Crowdfunding


  Raising capital online from small investors
• Dividends


  Payments made to shareholders from yearly profits