Defiinitions

.aEntrepreneur An entrepreneur is someone who starts up and owns a business and

takes a risk in the process

b.Revenue is the income generated from sale of goods or services

c.profit total revenue from goods and services sold - total costs. It is the amount
remaining when bills/expenses have been paid. TR-TC.

d.break even point is the amount of units produced until total revenue reaches total
costs

e.Fixed costs - Fixed costs are those costs which do not vary with output in the short run such
as rent.

f.Contribution - Contribution represents the amount of money a company has to cover its
fixed costs after it pays all of its variable expenses

g.)Margin of safety.The difference between the actual output and the Break Even Point

h.Limited company – a company which consists of shares purchased by shareholders

and has limited liability so has its own legal identity and the owner’s personal assets are
not at risk

i. franchisee is business owner that purchases the right to use an existing business's
trademarks or products

j.Economies of scale – the ability to reduce costs per unit as the business expands in size

k.USP – unique selling point. The special quality that a product has which gives it
differentiation from other rival products

l.Market share – The total sales of the business as a percentage of the whole market

m.Above the line promotion – General, broad methods used to make customers aware of
the product eg, TV, radio, magazines, billboards

n.Below the line promotion -Specific targeted methods of making customers aware of
the product eg direct sales, cold calling, social media

o.Competitive pricing is a strategy to price goods and services in line with rivals.

p.Primary market research - New research conducted by a firm to meet its specific
needs

q.Stakeholder - Anyone affected by / interested in an organisation

r..SWOT analysing is a framework used to evaluate a company's competitive position by
identifying its strengths, weaknesses, opportunities and threats

s.Motivation is what drive a person or inspire a person to do something

t..Bonus is a sum of money added to a person's wages as a reward for good

performance.

u..Fringe benefits are benefits in kind which are rewarded on top of a wage or salary.
Examples include: a corporate car, a company cell phone, housing allowance.

v.Span of control is the number of employees that a manager is directly responsible for

w.Chain of command is the line of communication which is passed from the higher tier
of managers to the lower tiers of the organisation structure

x.A centralised structure is where decisions are made at the top of the business
management and are purely controlled by the boss of the company

y.A decentralised structure is when decisions are spread out among all the layers and
there is more delegation

x.Delayering is a way of removing one or more levels of hierarchy from the organisation

structure

y.Lean Production – A method of production focused on eliminating waste.

z.Kaizen means ‘continuous improvement’ which an approach to production that aims to achieve
change from a series of small steps and results in an increase in quality and performance

zi.Just in time is a method of stock control designed to reduce the over or underproduction of stocks
and to ensure the right amount of stock is provided when needed

zii. Total Quality management is a lean production method which focusses on less defects, higher
quality and better customer service

ziii.Job rotation is when a worker can perform different types of tasks at the same level

ziv.Job enrichment is when a worker can carry out a variety of more challenging and creative tasks as
part of his job specification
1. income generated from sale of goods or services

2. business owner that purchases the right to use an existing

business's trademarks or products

3. Business owner which offers the right or licence to use his brand
and products

4. the amount of money a company has to cover its fixed costs after it pays
all of its variable expenses

5. total revenue from goods and services sold - total costs. It is the
amount remaining when bills/expenses have been paid. TR-TC

6. The difference between the actual output and the Break Even Point

7. the ability to reduce costs per unit as the business expands in size

8. a framework used to evaluate a company's competitive position by

identifying its strengths, weaknesses, opportunities and threats

9. – The total sales of the business as a percentage of the whole market

10. Specific targeted methods of making customers aware of the product

eg direct sales, cold calling, social media

11. continuous improvement’ which an approach to production that aims to

achieve change from a series of small steps and results in an increase in quality and performance

12. a way of removing one or more levels of hierarchy from the

organisation structure

13. when decisions are spread out among all the layers and there is
more delegation

14. the line of communication which is passed from the higher tier of
managers to the lower tiers of the organisation structure

15. a lean production method which focusses on less defects, higher quality and
better customer service