Business in the real world

Key Words

Goods - a physical product eg. a car, a TV.

Service - an intangible (you can't touch it) product eg. legal advice, train journey.

Customer - someone who buys a product from a business.

Consumer - someone who uses goods and services produced by a business.

Entrepreneur - someone who is willing to take the risks involved in starting a new business.

Entrepreneurship - the ability to be an entrepreneur - to take risks to develop a business idea.

Social enterprise - a business that is set up to help society rather than to make a profit.

Resources - the inputs that businesses use to provide their goods or services.

Enterprise - a business and the skills of the people involved in the business to identify business opportunities.

Interest - money paid by banks as a reward to attract people to save with them.

Interest rates - cost of borrowing money or the reward for saving money in a percentage.

Inflation - rate at which prices rise.

Gross Domestic Product (GDP) - value of goods and services produced by a country in a year (does not included income from overseas).

Sole trader - someone who sets up in business on their own.

Profit - measures the difference between the values of a business's revenue (sales) and it's total costs.

Unlimited liability - a sole trader has this. It means that you can lose everything you own.

Partnership - two or more people set up in business to pursue profit.

Deed of Partnership - an agreement between partners that sets out the rules of the partnership.

Stakeholders - individuals and organisation that are affected by, and affect the activities of a business.

Company - a business that has its own legal identity. It can own items, owe money, sue and be sued.

Shareholder - a person or organisation that owns part of a company. They have a 'share' of the business.

Stock Exchange - a market for buying and selling shares of public limited companies.

Flotation - when a private limited company decides to become a public limited company.

Also see Changing Economic World