Business Unit 1 - Developing New Business Ideas

Adding Value - changing inputs in a way that customers see as beneficial.

Aggregate Demand - measure of all the spending in the economy.

Assertation - making a claim not supported by evidence.

Assets - useful or valuable. Premises, equitment, and goodwill are examples.

Autocratic - dictorial power. Decisions handed down for implemation.

Bank Loan -  a fixed amount borrow from a bank, set repayments of the loan plus interest. Fixed period of time to pay it.

Benefits - gains often payments from government eg. children or the disabled.

Brand - names on product labels. A well known brand is a valuable asset.

Busines Plan - document settng out a propsal for a new business, good way to rasie capital.

Cash flow - calculation of cash coming into a business and payments going out.Cash flow projections are important in planning.

Collateral - something of value uses to gurantee a repayment of a loan eg house

Consumer Price Index - rate of inflation (a measure) based on a weight of prices from consumer spending.

Corporate resposility - businesses taking into consideration towards their stakeholders.

Cost of sales - directs costs of things used in the production process eg labour

Cost - plus pricing - setting prices by calculation the level of costs and adding a margin for profit which VARIES.

Creditor - someone you owe a debt too eg a bank

Customer loyalty - customers bringing back repeat business. Cheap.

Demand - willingingness to buy (consumers)

Demand curve - less at high price and more at a low price.

Democratic - everyone shares power. Consultation and shared decison making.

Disposable income - how much people have available to spend, takng into taxes and benefits.

Distribution - products from producer to consumer.

Economies of scale - ways in which long run increases in output can reduce costs per unit of output. eg ship does not need two captains

Equilibrium - balance between demand supply.

Exchange rate - price paid for one currency in terms of anothre eg £1=2 dollars.

Gross Domestic Product - main measure economic activity.

Hyperinflation - a situation in which prices rise too rapidily, people lose all confidence in money.

Indirect costs - costs not linked to output. Fixed costs or overheads.

Inferior goods - products we buy less of when rising incomes - switch to more attractive alternatives.

Inflation - sustained rise in the genral level of prices. Could be measured by consumer price index.

Interest rate - charge paid by borrows to lenders for loans.

Laissez - faire - allowng people to operate with as much fredom from interference as possible. Independence.

Lease - a rental agreement.

Limited liability - shareholders/owners not liable for its debts beyond the shares they owe when a busines fails.

Long run - long run is the time it takes to make chang in the fixed assets of a business.

Long tail - modern markets have room for many small niche suppliers alongside large firms eg thanks to the interent

Margin of safety - small surplus of revenue over planned costs to allo developments.

Marketing mix - price, product, place, promotion

Market orientation - setting wishes of customers and what they are willing to pay to guide production and decisons

" postitioning - focusing a product on a partical market segment.

Market segment - a subdivison of the market that has a particular charactertistics.

Monetary policy - use of the Bank of England base rate to influence economc and business activity.

Net profit - sales revene - all costs

Non-price competition - innovation, differnation or advertising to get an advantage over a competitor.

Overheads - indirect costs that are not tied to specific prodcuts. eg rent

Paternalistic - leader is firmly in control but taking into account welfare of workers.

Piece rates - quanity of output from a worker

Primary activity - direct exploitation of land resources eg mining

Primary research - new research. First hand

Private limited company (PLC) - limited liability. one shareholder. cannot offer shares for public sal. Small business do this usually for tax advantages or safety ll.

Product oriented - prioritising product quality

Product positioning - choosing key characteristics to the competition

Public limited company - limitited liablity. Sell shares and advertise to public.

Public sector - organisations owned by the state (LA) rather than private groups.

QuaLITative research - preferences and attitudes.

QuaNTitave research - numerical research eg potential customers or rivals

Satisficers - target a satisfactory performance than profit maximistation. Comfort.

Secondary Market Research - taking information from data already collected by others.

Shareholder - someone who owns shares in a business and is thereforea part -owner to an distributed profits.

Sole - trader - individual who owns and controls a business.

Stakeholder - someone with an interest in the business and its activities. eg workers or suppliers

Start up costs - expenditure to set up a business

Strong pound - high value of the sterling making imports cheapers and exports dear.

Supply curve - a line showing quantities that a market will sell at different price levels.

Theory X - management approach based on the idea than workers are lazy and need supervision.

Theory Y - " that workers want to achieve and can be trusted.

Time lags - between cause and effect eg between output and change in revenue

Trade credit - willingness of supplies to delay payment from their business for goods or services supplied

Trade offs - taking a set back to prioritise another eg a holiday

Variable costs - raw materials, which change with level of output in the short term

Venture capitatilists - lending money to new or expanding businesss in return for interest or part - ownership