Business key terms
Business: an active that requires the organisation of resources to achieve a reward, whilst running a risk. Entrepreneur: an individual with an idea for a business.
Franchise: the legal right to use the name and logo of an existing firm and sell the same products/services. Franchiser- the person selling it, for example, Macdonald’s. Franchisee- the person buying it, for example asda’s.
Social enterprise: an activity that achieves a reward for a society. Aim: A stated target for the future. E.g. a new business might have the aim to survive its first year of trading. A business objective: A clearly defined target that the organisation sets itself to achieve over a certain period of time. Helps achieve the overall aim. Stakeholders: An individual or group interest in a business e.g. shareholders, owners, customers, competitors, employees. Risk: the potential for loss but rewards in business make it a calculated gamble. Uncertainty: Not knowing the future or what is going to happen. Sole traders: The simplest form of business is typically an individual operating alone- a sole trader. However, a sole trader can actually employ people and still be classified as a sole trader. The important fact is that only one person is responsible for everything. Partnership: In a partnerships two are more people (max 20) share risk, cost and responsibilities. The partners take shares in the profits and a share of the decision making although this might not be an equal share. Though they are jointly responsible for any debts. Unlimited liability: unincorporated businesses such as sole traders and partnerships have unlimited reliability, which means owners are responsible for all the business’s debts. Public limited company (PLC): trades on the stock market, the public can buy shares. Private limited company (ltd): sells shares privately with permission of owner to known individuals Incorporation: the process of forming a limited company such as a...
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