Essentials of Business

Market Economy

a system where factors of production are privately held; decisions are made by the business in response to supply and demand

Limited Liability Company

a type of business ownership combining several features of a corporation and partnership structures, but is neither a corporation nor a partnership; the owners are members, not partners or shareholders, and the number of members is unlimited

Budget

a written plan of what you project that your income and expenses will be during a certain time period

Leadership

an act or instance of leading; guidance; direction

Franchise

an agreement by contract with a company to sell its products or services within a specific territory

Business Plan

an outline of your expenses, goals, and needs and how you expect to meet them

Mass Media

any of the means of communication, such as television or newspapers, that reach very large numbers of people

Asset

anything of value that an individual or business owns

Money

anything that people accept as a standard for payment (e.g., coin, currency, credit cards, checks, etc.)

Goods

articles of trade; wares; merchandise

Consumer Rights

basic rights of consumers to safety, to be heard, to choose, to be informed, to have problems corrected, to consumer education, and to service

Fraud

business practices that are deliberately misleading

CPA

certified public accountant

Information Utility

communication with the customer through selling, advertising, and packaging.

Place Utility

considers where you put the product so the most people can access it. The Internet has made place utility much easier to reach consumers.

Commercial Credit

credit issued by a bank to a business to finance trading or manufacturing operations

Marketing

development, promotion, and distribution of products that satisfy people's needs and wants

Nonprofit organization

established for the purpose of not making a profit, often service oriented

Delegating

giving employees the power to run things in a business and make decisions

Business

goods or services that are provided for profit.

Integrity

holding to principles such as honesty, fairness, and loyalty

Compensation

how much the job pays and benefits offered.

Factors of Production

land, labor and capital

Free-rein leadership

leadership style wherein managers and employees are given particular goals and then are left alone to get the job done; also called a "laissez-faire" style from the French expression "leave it alone"; this style gives the employees the most authority

Democratic Leadership

leadership style wherein managers work with employees to make decisions; leaders don't make unilateral decisions but encourage employees to be involved in the process; this style utilizes delegating but maintains the final right of approval

Autocratic Leadership

leadership style wherein one person runs everything and makes every decision without talking to or consulting with others; this style is more inclined to give orders

Recruitment

actively looking for qualified people to fill a job.

Credit

agreement to receive money, services, or goods now in exchange for the promise to pay in the future

Resources

also known as factors of production, resources are natural, human (labor), and capital; all are needed to produce the goods and services that satisfy our wants and needs

Partnership

an association of two or more people operating the business as co-owners and sharing in the profits and loss according to a written agreement

Small Business Administration

an independent agency of the United States government whose function is to offer different kinds of loans to aspiring small-business owners

Demographics

the statistical data of a population, especially those showing average age, income, or education

Consumer

one who selects, purchases, uses, or disposes of services or goods

Financial Institution

organization for managing money

Start-up Budget

plan for your income and expenses from the time a business starts to when it makes a profit

Conservation

process by which people attempt to preserve, protect, and manage resources

Accounting

process or system of recording and reporting a business's financial position

Marketing Mix

product, price, distribution, and promotion

Time Utility

products are available when customers want them

Employability Skills

qualities employers seek in a person, including experience, education, character, and ability to work well with others.

Initiative

readiness and ability in initiating action

Boycott

refusal to buy a company's services or product

Fixed Expenses

regularly occurring and paid expenses

Income Statement

report of net loss or net income during an accounting period

Stock

shares of a company that can be bought and sold by individuals or firms; stocks are issued by a company to raise capital

Collateral

something of value a person puts up for a loan, such as a car or house, so that the bank can take it if you do not pay back the loan

Motivation

something that motivates; inducement; incentive

Form Utility

taking raw materials and making a usable product from them

Sole proprietorship

a business owned by only one person

Consumer

a buyer of goods or services.

Installment Loans

a loan repaid with interest in equal periodic payments

Consumer Movement

a movement to pass laws that protect the consumer from unsafe and unfair business practices

Consumers

a person or organization that uses a commodity or service

Shareholder

a person who became an owner of a corporation by buying stock

Operating Budget

a plan for how much a business plans to spend and earn in a given period

Cash Budget

a plan for the actual money a business plans to spend and earn in a certain time period

Marketing Concepts

a plan on how to market a product or service to consumers

Money Managment

a process of planning how to get the most from your money

Advertising

the act or practice of calling public attention to one's product, service, or need

Investment Capital

the amount of money needed to launch and sustain a business for a set amount of time while it gets off the ground

Limited Resources

the availability of natural, human, and capital resources

Budget Variance

the difference between how much you expected to be spent and how much you actually spend

Human Resources

the knowledge, efforts, and skills people bring to their work, also called labor.

Profit

the monetary surplus left to a producer or employer after deducting wages, rent, the cost of raw materials, and other costs

Fiscal Year

the period of record keeping of a business for one year

Financial Manager

the person in charge of a business's financial funding, planning, and accounting

Management

the person or people controlling and directing the affairs of a business

Human Resources Management

the process of finding, selecting, training, and evaluating employees.

Services

the providing or a provider of accommodation and activities required by the public

Target Market

the specific group of customers that a company wants to identify; a people with wants and needs that can be met with the goods or services the company provides

Management Philosophies

the study of management to improve efficiency, effectiveness, motivation, and productivity

Gross Domestic Product

the total market value of all goods and services a country produces in one year

Marketing Utilities

the value added to a product by using the marketing functions

Economic

the way a society allocates its resources (land, labor, capital and entrepreneurship) to satisfy its needs

Corporation

though this type of business is owned by many people, the law treats it as though it is one person

Capital

total use of tools, equipment, machinery, and buildings used to produce goods and services

Possession Utility

trading a product or service for money-changing who owns the product.

Consumer Credit

type of credit extended by a retail store, bank, finance company, or another lender, chiefly for the purchase of consumer goods

Bait and Switch

when someone advertises a product at a low price to lure consumers into the store, then tries to get them to switch to a more expensive item

Job Description

a detailed outline of the duties, qualifications, and conditions required to do a specific job.

Cooperative

a jointly-owned enterprise engaging in the production or distribution of goods or the supplying of services, operated by its members for their mutual benefit, typically organized by consumers or farmers

Supply

a quantity of something on hand or available

Human Relations

an ability to communicate with other people

recycling

collecting items for processing in order that they might be used again

Marketing Functions

the techniques a company uses in the practical marketing of products

Capital

the wealth, whether in money or property, owned or employed in business by an individual, firm, corporation, etc.

Needs

things that are necessary

Wants

things you desire greatly, wish for

Labor

total human resources required to turn raw materials into goods and services

Unlimited Wants

wanting everything under the sun, plus some

Land

natural resources that are used to create goods and services

Balance Sheet

report of a business's financial state on a certain date

Decision-Making Process

the cognitive process of reaching a decision

Scarcity

the conflict between unlimited wants and limited resources; also referred to as the basic economic problem

Pollution

the contamination of air, water, or land

Product Liability

the contamination of air, water, or land

Demand

the desire to purchase with the means to do so; the quantity of goods that buyer will take at a particular price

Caveat emptor

Latin for "let the buyer beware"; buyers need to know what they are purchasing, whether it has a warranty, etc.

caveat venditor

Latin for "let the seller beware"; sellers need to take responsibility for the products they sell