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