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The intention to reach a goal.
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| Something the business owns; it has a value. |
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The average profit for the year as a percentage of the original investment.
Average rate of return = average return per annum/initial investment × 100 |
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| A tool for analysing the contribution made by each product in a business’ product portfolio. It plots each product’s position according to its market share and the rate of growth of the market. |
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| The consumers’ perception of the brand; its character, qualities and shortcomings. It is developed over time and operates as a consistent theme through advertising campaigns. |
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| A diagrammatic representation of the costs and revenue for a product; it plots total costs against total sales revenue, showing the break-even point where they cross. |
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| The point at which the business’ total sales equals the total costs. There is neither profit nor loss. |
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| A stock of raw materials held in reserve to protect the production process from unforeseen shortages. |
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A detailed statement of how the business intends to operate, either at start-up or during a given period of time. Business plans are based on forecasts and so cover only a short time.
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| Money that the business has in cash or at the bank. |
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| A financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity |
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| Money received by the business from its operations or investments |
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| Money paid out by the business to fund its operations or investment activities. |
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Maintaining control by keeping authority at the senior levels of the organisation
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The line through the hierarchy that shows who is responsible for whom from top to bottom of an organization.
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| The route the ownership of the product transfers from the seller to the buyer; it may be a single transaction or pass through others such as wholesalers, distributors, agents and retailers. |
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| The amount that remains in the account at the end of an accounting period. |
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| An amount of money paid to an employee that is based on a percentage of the sales he/she achieved; paid in addition to a basic salary. |
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| The rivalry between businesses looking to sell their goods/services in the same market |
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The money spent by a business on goods and services. |
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| Setting the price of a product so that it is in line with competitors’ prices. |
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| Laws designed to ensure that businesses make products that are safe and of good quality, and that they deal with customers honestly and fairly. |
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| The money spent by households on goods and services to satisfy their needs and wants. |
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| A legal document that sets out the terms and conditions of the job for the employer and the employee. |
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| Setting the price of a good or service at an amount higher than the cost of producing it so that a profit is made. |
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Individuals, businesses or organizations that purchase goods/services and make decisions about which supplier to choose.
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| The relationship between the business and the customer that puts the customer’s requirements at the Centre of the operation to build brand loyalty. |
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| The likelihood that past customers will continue to buy from the business, enhanced by high quality customer service and/or reward programmers. |
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| Whether customers are pleased with the goods/services they receive; whether they would purchase again. |
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| Where authority is spread widely through the organization |
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| Where authority is spread widely through the organization |
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Allocating a task to someone who would not normally be responsible for it.
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The quantity of a particular product that will be bought at particular price over a specific time.
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