Botswana BGCSE Business Studies key terms

The organised effort of combining resources such as land, labour, capital and enterprise to produce goods or services that people need or want, usually in exchange for money.

The four inputs used to make goods and services: land (natural resources), labour (human effort), capital (money and equipment) and enterprise (the person who takes the risk and organises the rest).

The willingness of a person to take a financial risk, spot an opportunity and organise the other factors of production in order to start and run a business.

The money left over when total revenue from sales is greater than total costs. It rewards owners for taking risk and is a main aim of private businesses.

A business owned and controlled by one person, who keeps all profit but has unlimited liability and usually raises capital from personal savings, family or a small loan.

A business owned by two or more people who share capital, work and profits under an agreed deed, and who normally each carry unlimited liability for the debts of the firm.

A business registered as a separate legal entity from its owners, so shareholders' liability is limited to the money they invested, and it can raise capital by selling shares.

A legal position in which the owner of a business can be forced to sell personal assets to pay business debts if the firm cannot pay them.

A legal protection meaning owners of a company lose only the money they invested in it and cannot be made personally responsible for the firm's debts.

A person or institution that owns part of a company because they bought shares, giving them a claim on profits (dividends) and a vote at meetings.

An arrangement where a person pays a fee and often a share of sales to use an established brand, products and systems of a larger business.

An increase in the size of a firm, measured by sales, output, employees or market share, achieved internally by expansion or externally by merging with or taking over other firms.

The way a business arranges its jobs, departments and reporting lines, showing who is responsible to whom and how information and instructions flow.

The number of workers who report directly to one manager. A wide span means many subordinates and less close supervision; a narrow span means closer supervision.

Passing authority for a task to a lower-level employee while the manager keeps overall responsibility, which can motivate staff and free managers for planning.

The specific targets a business sets itself, such as profit, sales growth, market share or survival, which guide decisions and allow performance to be measured.

Any group or person with an interest in how a business behaves, including owners, employees, customers, suppliers, lenders, government and the local community.

The proportion of total sales in a market that one business holds, usually expressed as a percentage of all sales in that market during a period.

A business accepting that it should act fairly towards society and the environment beyond what the law demands, for example by reducing waste or supporting local communities.

The organised collection and analysis of information about customers, competitors and markets, using primary methods such as surveys, or secondary sources such as reports and statistics.

A written set of questions used to gather primary data from many people quickly and cheaply; its value depends on clear wording and a representative sample.

Dividing a market into groups of customers with similar needs or features, such as age, income or location, so that products and advertising can be targeted at each group.

The combination of product, price, place and promotion that a business controls to persuade its chosen customers to buy, often called the four Ps.

The stages a product passes through from development and introduction, through growth and maturity, to decline, which helps managers decide on pricing and promotion changes.

The process of turning inputs such as raw materials, labour and machinery into finished goods or services that customers will pay for.

A measure of how much output is produced from a given amount of input, such as units per worker per hour; rising productivity lowers average costs.

Checking finished products or work against set standards, often at the end of production, so that faulty items are found and rejected before reaching customers.

Building quality into every stage of the process by setting procedures and standards, so that faults are prevented rather than only detected at the end.

The stock of raw materials, work in progress and finished goods a business holds; too much ties up money and risks waste, too little risks lost sales.

Any place from which a business obtains money, such as owner's savings, bank loans, overdrafts, trade credit, share capital or retained profit, each with different costs and conditions.

The movement of money into and out of a business over a period; a cash flow forecast predicts these amounts to show when cash shortages may arise.

The level of sales at which total revenue equals total costs, so the business makes neither profit nor loss; it can be found by calculation or by a chart.

The total money received from selling goods or services, calculated as selling price multiplied by quantity sold, before any costs are deducted.

The part of a company's profit that is paid out to shareholders, usually as an amount per share, with the remainder kept as retained profit.

The reasons why employees work hard and stay with a business; it can be encouraged by fair pay, job security, praise, promotion and interesting work.

An organisation of workers that joins together to negotiate pay, hours and working conditions with employers and to represent members in disputes.

Moral principles that guide business behaviour, such as honesty in advertising, fair treatment of workers and refusal to bribe or exploit suppliers.

Running a business so that it meets present needs without destroying the resources, environment or community wellbeing that future generations depend on.

A written document setting out a business idea, its aims, market research, marketing and production plans, and financial forecasts, used to guide the owner and attract finance.

A person who spots a business opportunity, gathers the resources needed, takes the risk of loss and manages the venture, often creating jobs and new products.