139 terms in 3.1
Accounts Receivable (Trade Credit)
Amount customers owe for goods/services already delivered.
Understanding different business forms
Angel Investor
(see Business Angel in 1.5).
Anticipation (Risk)
Recognizing potential future threats/opportunities and preparing responses.
Understanding the nature and purpose of business
Asset Finance
Borrowing to purchase specific assets (equipment, vehicles, property).
Bank Loan
Money borrowed from bank to be repaid with interest over agreed period.
Bootstrapping
Starting/growing business with minimal external funding; relying on: personal savings, revenue reinvestment, free resour...
Business Angel
Individual investor providing capital to startups in exchange for equity.
Business Creation
Process of starting new business from concept to launch.
Business Cycle
Alternating periods of economic expansion and contraction.
Understanding that businesses operate within an external environment
Business Cycle (Global)
Economic fluctuations affecting multiple countries.
Business Objectives
Goals/targets business aims to achieve.
Business Plan
Formal document detailing: business concept, market analysis, financial projections, operations plan, management structu...
Business Start-Up
The process of creating and launching a new business venture from the initial idea through to becoming operational.
Capital
Funds invested in business; financial resources.
Capital Equipment
Assets used long-term in business operations: machinery, vehicles, buildings, computers.
Characteristics (Entrepreneurial)
Personal qualities of successful entrepreneurs: vision, risk tolerance, determination, creativity, resilience, adaptabil...
competition
The rivalry between businesses offering similar products/services to the same market.
Contingency Plan
Backup plan if primary plan fails.
Cost Efficiency
Business objective minimizing costs while maintaining quality.
Cost Push Inflation
Inflation caused by rising production costs (materials, labor, energy).
Creative Thinking
Generating novel ideas/solutions to problems.
Customer Satisfaction
Business objective ensuring customers receive value and are content.
Debt Finance
Raising capital through borrowing; must repay with interest.
Demand-Pull Inflation
Inflation from high demand exceeding supply ("too much money chasing too few goods").
Discount Rate
Percentage applied to future cash flows to calculate present value.
dividend
Distribution of profits to shareholders.
Elastic Demand
A situation where the percentage change in quantity demanded is greater than the percentage change in price (PED > 1 in ...
Employee Welfare
A business objective focused on the physical, mental, and financial wellbeing of employees beyond minimum legal requirem...
Entrepreneur
Individual creating/running business, assuming financial risk for potential reward.
Entrepreneurial Characteristics
See Characteristics (Entrepreneurial) above.
Entrepreneurial Skills
Abilities supporting business success: business planning, financial management, marketing, leadership, problem-solving, ...
Entrepreneurship
Process of creating/running business ventures.
Equity Finance
Raising capital through selling ownership shares.
Ethical Stance
The moral position or set of values that guides a business's decision-making, particularly regarding issues such as the ...
External Economies of Scale
Cost advantages that arise from the growth of the whole industry or cluster of businesses in a region, benefiting all fi...
Failure (Business)
Business ceasing operations; unable to continue.
fair trade
Trade practice ensuring fair prices, conditions for producers (especially in developing countries).
Family Funding
Capital from family members for business.
Financial Incentive
Money-based rewards motivating performance: salary increases, bonus, commission, profit share, pay rises.
Financial Motive
Drive to earn money/profit.
Fixed Assets
Long-term business assets lasting >1 year: property, equipment, vehicles, technology.
Flotation
(Stock Market - see 1.5).
Franchise/Franchising
Business model where franchisee operates business using franchisor's brand/systems for fee/royalty.
Friends Funding
Capital from friends for business.
Funding
Providing financial resources for business.
Gilts
UK government bonds; low-risk investment paying interest.
Government Grants
Non-repayable funding from government for specified purposes: research, training, regional development, environmental in...
Growth Objective
Strategic goal to increase business size/revenue.
Hire Purchase
Arrangement to use asset while paying for it in installments.
Home Working (Entrepreneurship)
Running business from home.
Idea Generation
Process of creating new business concepts.
Independence (Motive)
Desire to work for oneself, control own decisions, be own boss.
Inelastic Demand
A situation where the percentage change in quantity demanded is less than the percentage change in price (PED < 1 in abs...
Inflation (Global)
Worldwide general price increase.
Inflation Rate
Percentage increase in price level year-over-year.
Informal Finance
Funding outside formal banking system: family, friends, saving groups, private investors.
Innovation (Entrepreneurial)
Creating new products, services, processes, business models.
Interest
Cost of borrowing; paid by borrower to lender.
interest rate
Cost of borrowing; return on savings.
Internal Economies of Scale
Cost advantages that arise from growth within a particular business, reducing average unit costs as output expands.
Investment
Purchasing assets expecting future returns: financial (stocks, bonds), physical (equipment, property), business (equity ...
Invoice Factoring
Selling unpaid invoices to factor at discount to get immediate cash.
Joint Venture
Partnership between companies/individuals for specific project/business.
Kick-Starter
(funding).
Lease
Arrangement to use asset for set period paying regular fees.
Lifestyle Business
Business primarily providing income for owner rather than seeking growth/profit maximization.
Limited Company
Legal structure where business is separate legal entity from owners.
limited liability
Legal structure protecting personal assets from business debts.
Loan Covenants
Conditions/restrictions imposed by lender in loan agreement.
Loans
Borrowing arrangement; money provided to be repaid with interest.
market capitalisation
The total market value of all a company's issued shares: Share Price multiplied by Number of Shares in Issue.
Market Opportunity
Gap/need in market addressable by new business.
Market Power
The ability of a business with a large market share to influence prices, terms of trade, or competitive conditions in it...
Market Rates (Finance)
Typical interest rates, fees, terms offered in financial market for different types of borrowing.
Market Saturation
Market where existing supply meets/exceeds demand; limited growth opportunity.
Mentoring (Entrepreneurship)
Experienced entrepreneur/professional guiding startup founder.
Merchant Banks
Financial institutions providing: corporate finance, investment services, advisory to businesses.
Micro-Finance
Small loans to individuals/micro-businesses often in developing countries.
Mission Statement
Concise statement of organization's purpose/values/long-term direction.
Mortgages
Long-term loans for property purchase.
New Business
Startup; newly created business venture.
Non-Current Assets
Long-term business assets held >12 months.
Non-Financial Motive
Non-monetary reasons for entrepreneurship: independence, ethical values, social impact, achievement, flexibility, family...
Offer for Sale
Public method of selling company shares on stock exchange.
Optimism (Entrepreneurial)
Tendency to expect positive outcomes; characteristic of entrepreneurs.
Owner's Capital
Money invested by owner/shareholders in business.
P2P Lending
(Peer-to-Peer).
partnership
Business structure of 2+ individuals owning jointly.
Partnership Finance
Funding structure for partnerships; capital from partners, loans against personal assets.
Peer-to-Peer Funding
(see P2P Lending).
Personal Savings
Individual's accumulated money used for business capital.
PESTLE Analysis
A framework for scanning everything outside the business that could affect it.
PLC (Public Limited Company)
Company publicly traded on stock exchange.
Preference Shares
Class of shares with priority over ordinary shares for dividends/asset distribution.
Private Equity
Investment in private (non-public) companies by PE firms.
Private Limited Company (Ltd)
A business structure where the company is a separate legal entity from its owners, shareholders have limited liability, ...
Private Placement
Sale of shares/securities to limited number of investors privately rather than public offering.
Problem-Solving (Entrepreneurial)
Identifying/addressing business challenges creatively.
Property (Finance)
Real estate asset; valuable collateral for loans.
Prospectus
Formal document issued by company offering securities.
Public Company
(see PLC).
Regulation (Business)
Laws/rules governing business operations: company law, employment law, environmental, health/safety, consumer protection...
Resilience (Entrepreneurial)
Ability to recover from setbacks; persistence despite difficulties.
Return on Investment (ROI)
Profit made on investment relative to cost.
revenue
Income from selling products/services.
Risk Spreading
Diversifying investments/activities reducing total risk.
Risk Taking
Willingness to accept probability of loss for potential gain.
Sale of Assets
Selling business assets for cash.
Sales Maximisation
Business objective increasing sales volume/revenue (rather than profit).
Secured Loan
Loan backed by collateral (asset) lender can claim if unpaid.
Securities
Financial instruments representing value: stocks, bonds, derivatives.
Seed Funding
Initial capital to develop business idea to viable stage.
Self-Employment
Working for oneself rather than employer.
share price
The market price at which a single share in a company can be bought or sold on the stock exchange, reflecting investor e...
shareholder
Individual/organization owning shares in company.
Shareholder Approach
A management philosophy, associated with Milton Friedman, that argues a business's primary duty is to maximise financial...
Shares
Units of ownership in company.
social enterprise
A business that trades primarily to achieve social, environmental or community objectives, reinvesting profits into its mission.
Social Entrepreneurship
Creating business to address social/environmental problems; profit secondary to impact.
Social Objective
Business goal benefiting society/environment beyond profit.
Soft Loan
Loan with favorable terms: low/no interest, long repayment period, flexible conditions.
sole trader
Individual owning/operating business alone.
Sponsorship (Entrepreneurship)
Support/backing from established business/individual for new venture.
Stock Exchange
Market where company shares are traded.
Stock Market
Exchange where company shares are traded.
Stock Market Flotation
Process of company offering shares publicly on stock exchange; becoming PLC.
Subordinated Debt
Loan repaid only after senior debt in bankruptcy.
Success (Business)
Achievement of business objectives; sustainable profitable operation.
Support (Entrepreneurial)
Assistance for entrepreneurs: funding, mentoring, advice, networks, training, incubators.
Surplus Cash
Excess money beyond operational needs.
Survival (Business Objective)
A short-term business objective focused on generating enough revenue to cover costs and continue operating, particularly...
Syndicated Loan
Large loan arranged by group of lenders reducing individual risk.
Term Loan
Fixed-term loan repaid in regular installments over set period.
Trade-Off
Accepting less of one thing to gain more of another.
unlimited liability
Legal responsibility for all business debts with no limit.
Unsecured Loan
Loan without collateral backing.
Valuation
Determining business/asset worth.
Vision (Entrepreneurial)
Clear picture of future desired state; long-term direction.
Wage Inflation
Rapid increase in wage levels.