Business Terms PDF

business terms above / below the line promotion above the line - generally untargeted, massive campaigns to raise brand awareness and reach more people Television - one of the most popular forms of advertising Print Media - includes newspapers or magazines Radio Direct Mail...

business terms above / below the line promotion above the line - generally untargeted, massive campaigns to raise brand awareness and reach more people Television - one of the most popular forms of advertising Print Media - includes newspapers or magazines Radio Direct Mail Sponsorship Trade shows and Exhibitions Email Marketing Targeted Search Engine Marketing advantage: Reaching a wide audience. Raising brand awareness. Grabbing attention. disadvantage: Very expensive. Extremely diGicult to measure success. Little opportunity to target in sophisticated way below the line - much smaller and highly targeted world of ads, aimed at individuals and with easy to track returns on investment and a definitive audience outdoor adverising - billboards + flyers direct marketing - email / social media loyalty cards advantage: more opportunity to build customer-brand relationship more personal / intimate (what..) easier to track easier to keep an eye on the budget disadvantage: may not reach a large audience only targets a specific group of customers assembly plant: factory where large items are put together by parts usually made in other factories (such as cars or electronics) assets: current assets - short term, they will be owned for, or last for, less than a year. This may include things such as stock, raw materials, and cash. fixed (non-current) assets - long term, they will be owned, or last for, more than a year. These may include things such as vehicles, equipment and buildings. audits: the examination of the financial report of a business by someone independent from it break-even: cost + income are equal and there is neither profit nor loss fixed costs ÷ (selling price per unit - variable cost per unit) capital employed: achieved by adding any equity and reserves, such as shareholder funds, to the long- term liabilities. This figure should always match the net assets figure, to make the sheet balance. cash flow: Cash flow is the movement of money in and out of a business over a period of time. Cash doesn’t just mean the physical money a business has in notes and coins. It also refers to cash in the bank – in other words, money that is available in the business’ bank accounts. The management of cash is very important as cash allows a business to pay its bills. The main cash payments a business makes include: payments to suppliers payments to employees overheads, such as rent, electricity and telephone bills When a business has just a few large customers and they fail to pay on time, the business’ cash flow position is badly aGected because the business does not have money it was expecting to have. This can lead to the business having financial diGiculties and even failing. A business can arrange credit terms with its suppliers, in order to pay for raw materials or stock at a later date. Credit arrangements can also allow customers to pay for products or services within 30, 60 or 90 days. If a business allows its customers credit terms, it is a sensible option to also negotiate longer credit terms with its suppliers. cash flow forecasting: Cash flow forecasting involves predicting the future flow of cash in and out of a business’ bank accounts. A cash flow forecast will usually be for a 12-month period. Forecasting cash inflows and outflows is important, especially for three types of business: new businesses fast-growing businesses businesses with unpredictable sales patterns, for example seasonal businesses (eg an ice cream van) A cash flow forecast allows a business to plan for the future. It can therefore assist the business in making important decisions, such as: employing more staG opening a new branch investing in a new business rewarding the owners for their success Cash flow forecasting can also help a business to identify the risks of negative cash flow. Creating a cash flow forecast for a new business can be diGicult, as the business will have no previous figures to help it estimate its future cash inflows and outflows. This will require the entrepreneur to make some guesses. They will also need to monitor the business’ cash flow carefully to see whether their estimates were realistic, and make changes if not. An established business can compare its actual cash flow with its cash flow forecast to monitor whether it is achieving its targets. It can then make changes if necessary. Calculating cash flow involves finding or estimating figures for the following: cash inflows - all of the money coming into the business, which can be separated into diGerent categories, for example sales, rent received and loans cash outflows - all of the money moving out of the business to pay for its costs, for example suppliers, employees and overheads certificate of incorporation: specifies the birth of the company as a separate legal entity to its owner(s) charities: provides support to those in need, promotes a particular cause, advances well-being of society consumer cooperative: owned and democratically operated by consumers consumer goods: goods used by an end consumer, such as TVs or sofas cooperative: businesses owned by 'member-owners' and each member gets a voice in how it's run data interpretation on financial statements: Financial information can help a business make judgements about current performance, performance against previous years, performance against competitors and performance from the perspective of a range of stakeholders. Assessing business performance is one of the main benefits of creating financial documents. comparing against previous years - Businesses may want to measure key elements over several years, such as: Revenue made each year Gross and net profits Expenses Liabilities Assets comparison with competitors - Both income statements and statements of financial position can be compared with competitors. Businesses may be interested to see how their competitors are performing as a way of judging their own success. performance from the perspective of stakeholders - A range of stakeholders such as shareholders, employees and suppliers will take a great interest in the financial performance of a business. shareholders are interested in how much profit has been made, along with reducing the overall expenses for a business where possible. Shareholders generally have an expectation that a business’ financial performance will improve each year to help them gain more from their investment. suppliers are interested in the financial performance of a business so that they can rely on payment from a business. In addition, if a business is making a huge amount of profit, a supplier may view this as an opportunity to try to increase its prices. If a business is making a loss, a supplier may begin to question whether a business will be able to continue purchasing supplies from them. employees may want to see the financial performance of a business for a number of reasons. Firstly, they may expect to receive a pay increase when a business is making large amounts of profit. Secondly, some employees may receive a share of business profits. Lastly, employees may become concerned about their job security if a business is consistently making a loss. profit - The profit made by a business is the money left over once all of the expenses incurred in running the business have been paid. Businesses usually separate their costs into variable costs and fixed costs. This means that a business can calculate two diGerent types of profit, gross profit and net profit. gross profit margin - The gross profit margin is the percentage of sales revenue that is left once the cost of sales has been paid. It tells a business how much gross profit is made for every pound of sales revenue received. For example, a gross profit margin of 75% means that every pound of sales provides 75 pence of gross profit. Comparing gross profit margins over time can be useful for businesses. This indicates that the cost of sales, which includes raw materials, increased faster than the business increased the price it charged its customers. This business might respond by increasing the price that it charges its customers or by negotiating lower prices for raw materials with its suppliers. net profit margin - The net profit margin is the proportion of sales revenue that is left once all costs have been paid. It tells a business how much net profit is made for every pound of sales revenue received. For example, a net profit margin of 32% means that every pound of sales provides 32 pence of net profit. Businesses can use the net profit margin to identify what is happening to their fixed costs. They can do this in two ways: Comparing the net profit margin with the gross profit margin - by comparing the net profit margin with the gross profit margin for the same time period, a business can identify how significant its fixed costs, or overheads, are. For example, a business that has a gross profit margin of 50% and a net profit margin of 10% knows that for every pound of goods sold, 40 pence is used to pay fixed costs. This can then be used to identify whether there is any scope to reduce these fixed costs. Comparing net profit margins over time - by comparing net profit margins over time, a business can identify what is happening to its costs. For example, a decrease in net profit margin indicates either that sales revenue has fallen faster than costs or that costs have increased faster than sales revenue. de-industrialisation: country shifts away from traditional manufacturing and moves to service-based industries such as finance, healthcare, tech diseconomies of scale: when a business grows so large that the costs per unit increase As a firm continues increasing its scale of output, it will reach a point where its average costs (AC) will start to increase o The reasons for the increase in the average costs are called diseconomies of scale At some level of output, a firm will not be able to reduce costs any further. This point is called productive e?iciency Beyond this level of output, the average cost will begin to rise as a result of diseconomies of scale This indicates that there is an optimal level of output that exists when the state of technology and capital (machinery) is fixed dividend: portion of a company's profit that is paid out to investors economies of scale: the cost advantages that a business can exploit by expanding their scale of production As a business grows, it is able to increases its scale of output This generates eGiciencies that lower its average costs (AC) of production o These eGiciencies are called economies of scale o Economies of scale help large firms lower their costs of production beyond what small firms are able to achieve Economies of scale can result in lower average (or unit) costs, not lower total costs o The total costs will increase, but at a decreasing rate per unit advantage decreased cost-per-unit / variable costs - the cost of production (including fixed and variable costs) is spread over more units of production more eGicient average cost falls as the firm expands disadvantage risk for diseconomies of scale entrepreneur: individual who takes a risk to start a business financial statements: income statement and the statement of financial position, or balance sheet. advantages they allow a business to spot trends they allow comparison with other businesses they give a clear financial overview of the business disadvantages they can be time consuming to prepare they make it diGicult to hide financial information from competitors or potential investors flotation: Selling shares on the stock exchange for the first time is called flotation or going public Flotation is a complex legal process that allows large amounts of share capital to be raised globalisation: operating on an international sale to provide / produce goods + services goods + services: goods - tangible items that can be used & stored services - intangible actions that cannot be stored gross profit margin: (sales - variable costs) ÷ revenue (x100) income statement: a financial document that demonstrates financial performance based on income - revenue / cost of sales / other expenses / gross + net profit incorporated: businesses with a separate legal identity to its owners infrastructure: facilities that support everyday economic activities IPO: initial public oGering is the first time that a private company sells stock shares to the public just in time inventory: inventory management method in which goods are received from suppliers only as they are needed advantages  reduce inventory holding costs increase inventory turnover more cost-eGicient production waste elimination improve productivity improve supplier relationships reduce manufacturing time disadvantages chance of running out of stock supplier dependency more planning required time pressure greater disruption threats from natural disasters lack of continuity: if the owner dies / becomes incapacitated, the business ceases to exist liabilities: current liabilities / short-term debts - any debts a business owes that will need to be paid back within a year, for example an overdraft, trade credit or a short-term business loan. long-term (non-current) liabilities - money borrowed that is paid back in more than a year, for example mortgages or a long-term bank loan. limited liability: business owner(s) are only responsible for business debts up to the value of their investment in the business location factors: customer services (retail/restaurant/gym) proximity to customers proximity to competitors cost of rent transport links for customer access manufacturing businesses availability of labour legal reulations infrastructure (road, rail, sea access) availability of raw materials / components cost of land availability of government incentives - grants or a reduction in tax to locate businesses in certain areas. LTD: private limited company with limited liability market orientation: focusing on customer needs / what the customer wants - making products based on it advantages could be cheaper safe to creative products - it has already been made before could get more ideas from customers disadvantages competitive no unique diGerentiation can be overlooked owner dissatisfaction market research: When a business wants information about the market or what customers want, it undertakes market research. Market research collects information that might help a business to be more successful and spot gaps in the market. identifies customer needs - relating to price, quality, choice and convenience. A business must make sure it is providing the right product, at the right price, in the right place, at the right time. By identifying the needs of customers through market research, businesses are able to reduce their level of risk and make business decisions that are more likely to be successful. Customer needs change over time, so it is important for a business to keep up to date and be innovative with its products. identifies gaps in the market - an area where there is demand for a product or service that is not being met. For example, before the first car was invented, an entrepreneur may have noticed that there was a demand to get around more easily and more quickly. Similarly, online music streaming services spotted that there was a demand for more convenient ways to listen to music, so they provided online access to music that could be downloaded. Spotting a gap in the market gives a new business a good chance of success as there will be little competition to begin with. primary research - new research that a business undertakes itself; collecting new data specific to its customers surveys questionnaire focus groups observations secondary research - gathering existing data that has already been produced; can be internal (financial / marketing information like how customers responded to an advert) and external internet research market reports government reports market segmentation: Market segmentation is the practice of dividing your target market into approachable groups. Market segmentation creates subsets of a market based on demographics, needs, priorities, common interests, and other criteria used to better understand the target audience. market share: portion of a market controlled by a business total product / business sales ÷ total sales in whole market OR business revenue ÷ total industry revenue marketing mix: 4 Ps - product, price, place, promotion product - new product development oGers numerous benefits, including driving business growth, enhancing competitive edge, and meeting customer expectations. price - The prices set for goods or services influence nearly every aspect of a business, including things like cash flow, profit margins, business expenses able to be covered, and the business' products' positions in the market place - It guides businesses in strategically locating their products and services to ensure they are accessible to consumers. promotion - increases brand recognition, customer retention, high return on investment, lead generation marketing avantages Marketing that is properly researched and targeted will bring new and returning customers Opinions of current and former customers can identify areas for improvement Raising brand awareness Allows for a more personal relationship between the business and the customer Increased market share marketing disadvantages Marketing can be expensive and drain profits, especially for smaller businesses It's diGicult to accurately assess the cost benefit of a marketing campaign Not all campaigns are successful because they were not carefully researched and planned The business may require additional staG to assist with advertising The cost of branded items used for advertising reduces profit margins The time required to keep information updated on websites and social media may require additional staG markup percentage: (selling price - cost) ÷ cost (x100) mass market: very large markets in which products with mass appeal are marketed advantages cheaper wider target - more sales easier to develop products lower barrier to entry easier market research disadvantages low adaptability - businesses don't adapt products to meet consumer tastes / special requirements low profit margin - low prices to attract many customers high competition mission statement: contains a business' vision and values, allowing stakeholders to understand it natural monopoly: monopoly that can arise when barriers to entry or fixed costs are high needs / wants: needs - what the customer requires when purchasing product / service wants - what an individual desires but not requires net assets: Net assets is essentially what a business is worth. This is calculated by adding fixed assets and net current assets (working capital) together. It can also be calculated as the diGerence between total assets and total liabilities. net cash flow: Net cash flow is the diGerence between all cash inflows and all cash outflows of a business: net cash flow = cash inflows – cash outflows Cash flow forecast example: net current assets / working capital: This is calculated by subtracting current liabilities from current assets. Net current assets is the money available for the day-to-day running and operation of a business, such as paying wages and purchasing stock. net income: amount of money a business has left from total revenue after paying for all expenses, including interest, taxes, and dividends niche market: more specific products; smaller market within a large market advantages can charge higher prices - highly profitable  meeting a unique customer need loyal customers with a targeted buyer less competition credibility in the field disadvantages minimal exposure lack of "economies of scale" - lower unit costs that arise from operating at high production volumes risk of overdependence on a single product / market could attract competition if successful vulnerable to market changes - "eggs in one basket" high barrier to entry objective examples: financial increase revenue increase margines reduce / pay oG debt non-financial increase customer loyalty develop new products become international objectives: short-term steps a business needs to take to meet its overall aims opening + closing balance: The opening balance is the amount of money a business starts with at the beginning of the reporting period, usually the first day of the month: opening balance = closing balance of the previous period If there is no previous period, then the opening balance will be zero. For example: closing balance for January = £5,650 therefore opening balance for February = £5,650 The closing balance is the amount of money the business has at the end of the reporting period, usually the last day of the month: closing balance = net cash flow + opening balance For example: net cash flow = £2,550 opening balance = £5,650 £2,550 + £5,650 = £8,200 therefore closing balance = £8,200 operating profit margin: operating profit ÷ sales revenue (x100) output: a quantity of goods or services produced in a specific time partnership: two or more owners of a business deed of partnership - a document signed by all owners of a business setting out terms + obligations to abide by limited partnership - at least one owner is a general partner and at least one owner is a limited partner PLC: business that is able to oGer its shares to the public portfolio: collection of all the products / services oGered by a business pricing strategies: cost-plus pricing - calculate costs and add a markup competitive pricing - set a price based on what the competition charges price skimming - set a high price and lower it as market involves penetration pricing - set a low price to enter a competitive market and raise it later value-based pricing - base your product or service’s price on what the customer believes it’s worth. primary research: primary research - new research that a business undertakes itself; collecting new data specific to its customers surveys - asks questions to get opinions and learn about customers’ experiences with a product or service. A survey can be conducted using methods such as: o an online questionnaire o a paper-based questionnaire o an interview o a focus group questoinnaires - set of questions to find out customers’ opinions. It can be done online, in person or through the post. When creating a questionnaire, businesses need to have a clear goal and ask questions linked to this goal. Questionnaires are made up of open and closed questions: o Open questions aim to get detailed opinions and allow customers to respond using their own words. An example of this is, ‘What do you think of our new latte and why?’. This question would allow someone to express their thoughts about the new latte and give the reasons for their opinion. o Closed questions do not allow respondents to give reasons for their responses. For example, ‘Do you like our new latte – yes or no?’ or ‘On a  scale of one to five, how likely would you be to purchase our new hot chocolate?’ focus groups - a group interview. It can take place in person or online. In a focus group, people are asked questions or given scenarios and asked for their opinions about a product or service. Their replies provide businesses with more in-depth information than questionnaires. The size of the group is important. If the group is too small, not enough opinions will be gathered. If the group is too big, some people may not get a chance to contribute. observations - Observations involve watching customers to find out their reactions to certain products or services. For example, this could involve watching someone try a drink for the first time or monitoring which products a customer notices first when they go into a shop. advantages Specific to the business Provides detailed information Relevant and up to date Can gather a mixture of quantitative and qualitative data disadvantages Time consuming Expensive Sometimes diGicult to collect private limited company: shareholders / owners have a separate legal identity from the business; limited; shareholders are often family / close friends; shareholds are usually directors who run the business; registered and need to submit details of financial performance + changes in ownership each year advantages Shareholders benefit from limited liability for debts incurred by the company Access to greater finance from investors and lenders who consider limited companies to be less risky Ownership can be easily transferred by selling shares Business continuity as the business does not die with its original owner disadvantages More expensive and time-consuming to set up as legal advice is often required More complex operational rules than sole traders or partnerships Annual financial reporting and auditing are required Shareholders may have little control over the company as the founder usually imposes their own agenda privatisation: converting business from the public sector to the private sector producer goods: goods used by business to provide other goods / help in providing services - machinery or tools product life cycle: Once it has been designed and is ready to launch, a product will typically go through four diGerent phases during its life. These phases are referred to as the product life cycle. Phases of the Explanation product life cycle The product is launched, so sales may be low because only a Introduction small number of customers are aware that the product exists. As more customers become aware of the product, sales increase Growth rapidly, especially if customers like it. Sales reach their peak during this phase, as the product becomes Maturity established. It may become a regular purchase for customers who like it. Sales fall during this phase as the product loses popularity and Decline customers look for alternatives. It is withdrawn when it becomes unprofitable. the level of sales determines where a product is in its life cycle. This can be illustrated visually on a graph: The life cycle, and how long it takes a product to go through its life cycle, can vary enormously from one product to another. Some products will exist for years before entering a decline, while other less successful products may go through their life cycle very quickly. How long a product lasts will depend upon: how dynamic the market is – eg, technological products (such as tablets and laptops) have short life cycles as they quickly become out of date as new technology emerges how strong the brand image behind the product is – eg, a new sports shoe from a well-known brand is likely to have a longer life cycle than a new sports shoe from an unknown brand extension strategies Developing new products is expensive and takes time, so businesses will usually try to extend the life cycle of a product and prevent it from going into decline. To do this, they need to find ways of keeping people interested in the product for longer, thereby increasing the number of sales. Product diGerentiation – This means making a product stand out from its market competitors, usually by highlighting the diGerences between it and the other products. Ensuring that a product has a unique selling point (USP) is a good way to diGerentiate it from other products. Reducing the price of the product - By the time a product has reached maturity, it may face competition from other products. When this happens, the business may no longer be able to charge a high price for the product. If the price is reduced, existing customers are likely to continue buying it, while other customers may switch from competing products.  Rebranding the product – Tired-looking branding and packaging can put customers oG. Refreshing the brand and packaging design can appeal to new customers and convince previous customers to try a product again. Repositioning the product - This extension strategy involves exploring new markets for a product. It is possible to revive a product by testing new uses for it or adding value so that it appeals to a diGerent audience. For example, a business could try introducing a diGerent sized version of the product. Increasing marketing activity - Running new advertising campaigns and sales promotions can attract new customers, remind previous customers that the product still exists and encourage existing customers to buy more of the product. A unique selling point, or USP, is something about a product that makes it more appealing than its competitors. Examples include being the best quality, having the lowest price or having a feature that none of its competitors have. product orientation: focusing on design + innovation of a product rather than customer's needs advantages sense of value / worth in the product (apple) exclusive to business / diGerentiate owner satisfaction start new trends control certain markets / break into new ones disadvantages risky expensive productivity: output per person during a time period profit margin: net profit ÷ revenue (x100) profit maximisation: when a business aims to generate as much profit as possible promotion strategies: Businesses use promotion to: inform consumers of a new product or service persuade consumers to buy a product or service remind consumers about the benefits of a product or service To do this, a business will use a range of promotional methods. advertising - An advert is a paid-for message designed to influence consumer purchases. Adverts do this using emotive language, which is designed to make people feel a certain emotion, including excitement, sadness or fear. For example, ‘buy it now before it’s too late’ creates a fear of missing out. Types of media for advertising include:  o television o radio o print, eg newspapers and leaflets o social media o websites o billboards and posters, eg on buses and trains sponsorships - Sponsorships provide financial support to an event, person or organisation, either through free products or services, or through a financial payment. In return, the business, product or service is prominently displayed. Sponsorship is commonly used at sporting events, conferences, exhibitions and charity events. product trials - Product trials are designed to encourage consumers to try a product either for free or at a reduced cost. A product trial may involve oGering: o free samples, eg food products o free trials, eg movie streaming services o trial oGers, eg money back on a purchase special oGers - Special oGers are a type of sales promotion. They oGer incentives to persuade consumers to make a purchase. Examples include: o discounts o competitions o buy-one-get-one-free oGers o free gifts o money-oG vouchers o loyalty cards branding - A brand image can be used as promotion, so businesses often want to establish a positive brand image. When a new product is launched under an established brand name, consumers may be more likely to purchase it because of their knowledge of the existing brand. A promotional strategy combines some or all of the above promotional methods to reach the target audience. The promotional strategy will depend on the size of the business, how much the business has to spend on promotion, and the market segments that it is aiming to reach. A good promotional strategy for a small local gardening business might involve advertising using printed leaflets combined with an introductory discount for new customers. This strategy would target people living in the local area, who would be the most likely to become customers. A poor promotional strategy for a small local gardening business might involve advertising on national TV combined with sponsorship of a local gardening competition. TV advertising is very expensive so it is rarely used by small businesses, and there would be little point in a small local business advertising nationally. public corporations: owned by the government + run by directors appointed by the government public limited company: large business that sell shares publicly on the stock exchange; selling shares on the stock exchange for the first time is called flotation or going public advantages Significant amounts of capital can be raised Risks are spread among a large group of shareholders Company shares can be bought and sold easily on a public stock exchange A board of directors, made up of individuals from outside of the company management and major shareholders can bring in expertise/perspectives that can promote growth PLCs have high visibility with customers, suppliers, and potential investors which can help grow its customer base As large businesses PLCs may be able to dominate the market and benefit from economies of scale disadvantages PLCs must comply with complex legal and financial regulations such as o Completing regular financial reports o Maintaining accurate accounting records o Holding annual general meetings Setting up a public limited company can be expensive o Fees for legal and accounting advice o Costs of the flotation such as producing a prospectus The management team are likely to prioritise short-term financial performance (e.g. paying staG less) over long-term strategic planning (retaining talented staG) so as to maximise profits for shareholders Hostile takeovers are a risk as shares can be bought by rival businesses qualitative or quantitative data: qualitative data is usually expressed as opinions includes descriptive information is gained using open-ended questions, eg ‘What do you like about the product and why?’ It provides a business with detailed information that cannot be expressed in a graph or chart. While qualitative data gives detailed information, it can be time consuming and costly to gather and analyse. quantitative data is usually numerical data is gathered through the use of closed questions, such as ‘yes’ or ‘no’ responses, multiple-choice options or a rating system can generally be expressed in a graph or chart It has the benefit of being simple and quick to analyse. It can also be analysed in a way that gives easy-to-understand results. However, quantitative data lacks specific opinions and doesn’t always allow a business to see exactly what its customers think. retail cooperative: employs economies of scale on behalf of its retailer members retailer: A retailer is a business that sells goods to the public, often in a physical shop. It is common to use a retailer within a distribution channel. The producer distributes its product to a retailer, which then oGers the product for sale. Customers then visit the retailer’s shop to purchase the product. Some retailers sell a wide range of products. Others concentrate on selling a particular type of product, such as electrical products or shoes and clothing. An advantage of selling in physical shops is that customers are able to see and feel the quality of the products that they are interested in, eg customers can try on shoes to check fit and comfort. Retailers that sell a particular type of product may also be able to oGer specialist advice. A disadvantage of retailers is that they require premises, which are often located on high streets, and these are expensive to run. Types of retailers include: small independent traders supermarkets department stores advantages Increased customer spend. Brand Awareness. Upsell and cross-sell opportunities. disadvantages Negative brand reputation. Product damage or theft. Other costs. sales: any transactions where money is exchanged for ownership of a good / entitlement to a service scarcity: the demand for a good or service is greater than the availability of the good or service secondary research: secondary research - gathering existing data that has already been produced; can be internal (financial / marketing information like how customers responded to an advert) and external internet research o Internet research includes data taken from competitors’ websites, newspaper articles and social media. This provides a business with an overview of information relating to its industry and the types of products and services other businesses oGer. market reports o Market reports are industry specific. They may give specific information about an industry as a whole. An example of information that could be  found in a market report would be ‘46 per cent of adults aged 35–50 visit a coGee shop at least once a month’. This could help a business decide which customers to target. government reports o Government reports may consist of general information that is not usually industry specific but can still be useful for a business. Examples include ‘60 per cent of people aged 16–25 would consider working for £6.50 per hour’ or ‘25 per cent of the population is now aged 60 or above’. A business may use this information to decide what level of pay to oGer potential employees, who its target market will be or what kinds of products to develop. advantages Quick and easy to gather Can provide industry-specific information Often easy to analyse disadvantages Not specific to the business Could be out of date May be biased or inaccurate sectors: primary - businesses that produce / extract raw materials secondary - businesses that manufacture products tertiary - businesses that provide services shareholder: partial owners of a private / public limited company SMART aims: specific, measurable, achievable, realistic, time-bound targets social enterprise: a business with a clear goal to help the community sole trader: business owned / run by one person stakeholders: individuals / groups that aGect / are aGected by the actions of a business - holds an interest in the business internal - works within a business, either making / carrying out decisions (owner, employee, manager) external - do not work within a business but are aGected by its activities (customer, government) statement of financial position: considers key financial information that allows a business to monitor inflow / outflow, along with the overall value of the business stock market: a collection of publicly listed companies subsidies: a sum of money granted by the state or a public body to help an industry or business keep the price of a good / service low. unincorporated: business does not have a separate legal identity from its owner(s) unlimited liability: business owner(s) are personally responsible for all business debts worker cooperative: people who work in the company own / control the business on a democratic basis (one person, one vote)