Enterprise Vocabulary

To run a successful business, you need to understand concepts such as:

profit stock revenue

credit receipt loss
budget expenses
 All businesses incur expenses.
An expense is something the business has to spend money on. Stock, rent,
wages and bills are examples of expenses.
The amount of money a business receives
is known as its revenue.
Revenue is the money the business earns, without considering expenses.

Revenue can also be referred to as turnover.

 Businesses trade to make a profit.
Profit is the amount of money a business makes. It is their revenue minus
their expenses.
 Businesses do not want to make a loss.
A loss occurs when business expenses are greater than the amount of revenue
in a set period of time.

If the business spends more money than it receives, it makes a loss.

 All businesses need to
know their budget.
A budget is the amount of money a business has available to spend in a set
period of time.
All businesses need to keep their receipts
in order.
Businesses keep receipts to show what
they have paid for goods and services.

This helps the business to keep track of

their budget.
The items a business sells are known
as stock.

Businesses need to decide how much stock they need

to make, or keep ready for their customers.

Some businesses, like bakers, sell almost all their

stock every day.
 Businesses often buy stock
on credit.
Buying stock on credit means that businesses can receive goods from
suppliers now but pay later for the items they have received.

Sometimes
businesses buy
goods on ‘sale or
return’ – this means
that if they do not
sell them all, they
can return them to
the supplier and get
a refund.
 Can you read the following passage and
answer the questions?
Gerry has a small business making ice-cream. Yesterday, he had a stall
at the local market. Gerry’s budget for buying ingredients to make
stock for the market was £100. He had to pay £20 to hire the stall and
a further £10 each for electricity to run two freezers to keep the ice-
cream frozen.

After a successful day, Gerry’s revenue was £250.

1. Did Gerry make a profit or loss at the market?

2. How much profit or loss did he make?
3. Can you show how you worked this out?