Business studies key terms

The cards, front and back

1. 1
   Front

   Sole trader

   Back

   A business owned and run by one person, who keeps all the profit but usually has unlimited liability for its debts.

2. 2
   Front

   Partnership

   Back

   A business owned by two or more people who share the decisions, the profits and, in a general partnership, the liability for debts.

3. 3
   Front

   Limited liability

   Back

   The owners' risk is limited to the money they invested, so their personal belongings are protected if the business fails.

4. 4
   Front

   Stakeholder

   Back

   Any person or group affected by or interested in a business's activities, such as employees, customers, suppliers, owners and the local community.

5. 5
   Front

   Shareholder

   Back

   A person or organisation that owns shares in a company and therefore owns part of it. Shareholders may receive dividends.

6. 6
   Front

   Revenue

   Back

   The money a business receives from selling its goods or services. Revenue equals price multiplied by quantity sold.

7. 7
   Front

   Profit

   Back

   Revenue minus total costs. If costs are greater than revenue, the business makes a loss.

8. 8
   Front

   Fixed and variable costs

   Back

   Fixed costs, such as rent, do not change with output. Variable costs, such as raw materials, rise as the business produces more.

9. 9
   Front

   Break-even point

   Back

   The level of output where total revenue equals total costs, so the business makes neither a profit nor a loss.

10. 10
    Front

    Cash flow

    Back

    The money flowing into and out of a business over time. A profitable business can still fail if it runs out of cash to pay its bills.

11. 11
    Front

    Market research

    Back

    Collecting information about customers, competitors and the market. Primary research is gathered first-hand; secondary research uses data that already exists.

12. 12
    Front

    Market segmentation

    Back

    Dividing a market into groups of customers with similar needs, for example by age, income, location or lifestyle.

13. 13
    Front

    Marketing mix (4 Ps)

    Back

    The four elements a business combines to market a product:

    • Product
    • Price
    • Place
    • Promotion
14. 14
    Front

    Unique selling point (USP)

    Back

    A feature that makes a product different from and better than competing products in the eyes of customers.

15. 15
    Front

    Product life cycle

    Back

    The stages a product goes through: development, introduction, growth, maturity and decline.

16. 16
    Front

    Economies of scale

    Back

    Falling average costs per unit as a business grows, for example because it can buy materials in bulk.

17. 17
    Front

    Supply chain

    Back

    The network of businesses and steps involved in getting a product from raw materials to the final customer.

18. 18
    Front

    Motivation

    Back

    The factors that make employees want to work hard. These can be financial, such as pay and bonuses, or non-financial, such as recognition and training.

19. 19
    Front

    SWOT analysis

    Back

    A planning tool that looks at:

    • Strengths and Weaknesses (inside the business)
    • Opportunities and Threats (outside the business)
20. 20
    Front

    Entrepreneur

    Back

    A person who sets up a business, takes the financial risk and makes decisions in the hope of making a profit.

21. 21
    Front

    Corporate social responsibility

    Back

    A business's commitment to act ethically and consider its effect on society and the environment, not only its profits.