Edexcel GCSE Business (9‐1)

Glossary
Keyword Definition
Investigating small business
Added value The difference between the cost of the
materials taken to make a product and the
price that is charged for the product.
Aims and objectives The goals of a business. These may be financial
or non‐financial.
Breakeven The number of products a business must sell so
that its total revenue is the same as its total
costs. At this point the business will make no
profit or loss.
Business plan A plan for the development of a business,
giving details such as the products to be made,
resources needed, and financial forecasts.
Business success A measure which could be sales, market share
or profit related.
Cash flow The flow of money into and out of a business
over a period of time.
Cash inflow (Receipts) Money coming into the business. E.g. Revenue,
a loan or another source of finance.
Cash outflow (Payments) Money leaving the business. E.g. Wages,
suppliers, loan repayments or Advertising.
Choice A range of products aimed at differing needs
and segments.
Closing balance The amount of money left at the end of the
current time period.
Competition When companies produce comparable
products or services within the same market.
Competitive advantage The advantage one company has over another,
or several others.
Competitive environment A market which has many competitors.
Consumer The person who uses the product.
Consumer income The amount a person or household has to
spend, after paying tax.
Consumer rights What the consumer is entitled to by law.
Crowdfunding Where a large number of individuals invest into
a business project on internet sites such as
 Kickstarter.
Customer The person who buys the product.
Customer needs What the customer wants, these can change
over time. E.g. Price, quality, choice or
convenience.
Customer service Having a clear understanding of customer
expectations and delivering.
Demographics The characteristics of the population in terms
of age and gender.
Digital communication Communicating with customers electronically
through things such as a website, social media
and email.
Discrimination Judging someone based on their age, gender,
race, religion or disability.
Dynamic business Businesses responding to what consumers
want.
e‐commerce The use of online systems to sell goods and
services.
Economic climate The broad performance of the UK economy, as
measured by GDP growth.
Enterprise The skills shown by an entrepreneur.
Entrepreneur A person who organises resources, makes
decisions and takes risks in business, in order to
benefit from the potential future rewards.
Exchange rate The price of one currency in terms of another.
E.g. £1=$2
Export Goods or services that a firm produces in its
home market, but sells in a foreign market.
Financial aim Aims and objectives that relate to the money.
E.g. Survival, profit, sales, market share.
Fixed cost Costs which do not change with output. E.g.
Rent or salaries.
Focus group Where a number of customers are invited to
attend a discussion about a product.
Forecast A prediction of future finances. E.g. Sales, cash
flow or profits.
Franchise The right given by one business to another to
sell goods or services using its name.
Franchisee A business that buys the rights to a franchise.
Franchisor The person who owns the rights to the
franchise.
Gap in the market An area of the market, with no products
currently being provided.
Good Physical items a business sells. E.g. Bikes,
laptops & pens.
Import Goods and services that are bought into one
country from another.
Inflation A general and persistent rise in prices which
reduces purchasing power.
Insolvency When a business can no longer afford to pay its
 debts.
Interest The cost of borrowing and the reward of
saving. Can be fixed or variable.
Legislation Laws passed by Acts of Parliament.
Limited liability Where a business and its owners have separate
legal identities, meaning shareholders can only
lose the original amount they invested into a
business.
Location Where a business locates.
Margin of safety The amount of products a firm sells over and
above the breakeven point.
Marketing mix The elements of marketing that are designed to
meet the needs of the customer. The elements
are product, price, place and promotion.
Market mapping A method of evaluating business ideas by
setting out the features of a market and
plotting on current products being provided.
Normally these are used to find a gap in the
market.
Market research Collecting and analysing data from customers,
competitors and the market in general.
Market segments An identifiable group of people with the similar
characteristics. This could be split by location,
demographics, lifestyle or income.
Net cash flow The difference between cash inflows and cash
outflows over a period of time.
Non‐financial aim Aims and objectives that relate to areas other
than finance. E.g. Social objectives, personal
satisfaction, challenge and control.
Obsolete A product which is out of date and no longer
used.
Opening balance The amount of money the business has at the
start of the current time period.
Overdraft With agreement from your bank, taking more
out of your account than you actually have,
leaving a negative bank balance.
Partnership A business organisation that is usually owned
by 2‐20 people, who have unlimited liability.
Payment systems The variety of ways in which customers can pay
for a product. Includes contactless payments,
apple & android pay, PayPal and more
traditional methods.
Place How the product passes from the producer to
the consumer.
Pressure group A group with a common interest/goal who
work collectively to further the cause.
Price The amount charged to the customer for the
product.
Primary research Research which is being collected for the first
time.
Private limited company (Ltd) An incorporated business, with Ltd after its
 name that can sell shares to family and friends.
The shareholders have limited liability.
Product The good or service a business is selling.
Product portfolio The range of products a business sells.
Profit The amount left from revenue after costs have
been paid.
Promotion An attempt to obtain and retain customers by
drawing their attention to a business or its
products. E.g. Sales promotions, advertising
and public relations.
Qualitative data Data which is detailed and contains
information about people's feelings and
opinions.
Quantitative data Data which is limited in detail, but can easily be
put into graphs and charts for analysis.
Resource The land, labour and capital used by
entrepreneurs. E.g. Buildings, equipment &
staff.
Retained profit Profit that is 'ploughed back' into the business.
Revenue The money made from selling a product.
Reward The return for taking a risk and making it a
success.
Risk A situation or decision that has exposure
business failure, financial loss or lack of
security.
Secondary research The collection of data that already exists but is
then used for a business's own requirements.
Selling assets When a person or business sells assets it owns,
such as equipment or vehicles it no longer uses,
in order to raise finance.
Service Non‐physical items a business sells. E.g.
Hairdressing, public transport & music
streaming.
Share capital A way of raising finance through sale of shares.
Shareholder A person who owns a 'share' in a business.
Sole trader A business with a single owner, who has
unlimited liability.
Stakeholder Those with an interest in the activities of a
business. These can be internal or external.
E.g. Shareholders, managers, customers and
the local community.
Stakeholder conflict When different stakeholder groups have
different aims and objectives, which can be
difficult for a business to satisfy at the same
time.
Target market The segments of the market you are aiming
your product at.
Taxation Charges from the government.
Technology Hardware and software that businesses may
use.
Trade credit A period of time given to a customer between
receiving the goods and payment being due.
Unemployment The number of people who are looking for
work but unable to find any.
Unique selling point A characteristic of the product that makes it
different from other similar products being sold
in the market.
Unlimited liability Where a business and its owners are one and
the same, meaning the owners are responsible
for all business debts.
Variable cost A cost which rises as output rises. E.g. Raw
materials or packaging.
Venture capital An experienced business person provides funds
for small or medium sized companies that may
be considered too risky for other investors, in
return for equity.