An enterprising business is any business that innovates in a market, that is to bring a new product or a new feature to a market. An enterprise will almost always operate for a profit.

An entrepreneur is most likely to set up an enterprise, as the entrepreneur they will need to have good ideas, and the skills to take risks in the business, that will reward them.

Many entrepreneurs fail, and they simply have to start again, and take larger risks with hopefully larger rewards.

Risk is the chance of failure a business has, by taking many risky decisions there is a greater chance of reward, the greater the inputs that could be lost the higher the risk.

Reward does not just include the benefits but also any losses, reward can be negative.

Profit is the amount of money a business makes after its sales costs have been taken into account.

Sales revenue – total costs = profit

If profit is negative it is a loss.

The opportunity cost is the value of a good that is not purchased, to allow you to make a different purchase.

For example, the opportunity cost of buying a new car for £2000, is redecorating you house to the value of £2000.

This also includes the benefit that is lost from the next best alternative, for example the benefit of a decorated house.

A trademark is a sign, symbol, slogan or even sound that distinguish a business from others, this means the trademark cannot be copied by other businesses wanting to use the brand image.Copyright prevents the copying of an art based medium, such as a painting or a musical composition. A patent is an innovative feature of production method that is unique to this business, a patent stops any other rival businesses copying the idea and gives a patented product unique selling point.

A franchise is the authorization to distribute an established businesses goods and services, the main advantage is a newly established business will have a recognized brand.

The inputs into a business are the things that are needed for the business to trade. For example any raw materials that are needed.The end product that a business produces, usually this will involve the manufacturing of raw materials or components.

The transformation process is how the business manufactures the inputs into an output. This service is what people are paying for when they buy the good. This will involve the employment of the four factors of production.

Adding value is where the value of the outputs from a business outweigh the value of the inputs, this is a successful transformation process. And is essential for a business to be profitable.

A business plan is a literal plan of how the business is going to be run, and will contain forecasts of cash flow, break even and sources of finance.A business plan is a vital document needed when attaining a loan from a bank, they will want to make sure they get a return on the money they lend, and will rarely lend to an unplanned business.

Research is where a business looks into its markets trends to allow them to run more successful advertising campaigns. primary research is research that has been gathered, analysed and evaluated by the business for itself.Secondary research has been somebody else's primary research, and for this reason it can be inaccurate or out of date.

Quantitative research is data gathered that can be ordered numerically. This kind of data is the easiest to analyse graphically, as it is usually true , false or multiple choice.Qualitative research however is usually based on opinion, and can be a sentence of opinion. This type of data is hardest to analyse and cannot be completed through a computer.

Sampling is the way in which businesses choose who they will analyse for their market research. A sample must be taken because it is rarely possible to analyse an entire market.There are many ways to break the market down to decide who you will choose to analyse, such as:

Random Sampling Regional Gender Stratified Sampling – Taking a portion of different areas of the

market.

Electronic Markets – A retailer that primarily uses electronic methods of communication to sell its goods.Physical Markets – Retail through a physical stall of shop.National Markets – A business who’s markets spread nationally, this can be because of good marketing, or more likely there are several outlets for the same business.Local Markets – Where retailers are closely located to their markets, this is usually the best source for items such as fresh fruit and veg.

A mass market is a where a product appeals to or is marketed a wide range of people.A niche market is the opposite, and so has very specialised products. A product with this type of market is less likely to be able to exploit economies of scale and so are often considerably more expensive.

Supply is the amount of a product supply is willing to supply at a range of prices at a moment in time.Demand is the amount of a product the consumer is willing to purchase at a range of prices.

The point at which these two factors agree, (they are willing to produce and consume the same amount at a certain price) is the point at which a normal good will be sold.

This is where the market for a particular good is split up to allow for easier or more accurate market research. These sub-markets are markets that will react differently to how the product is marketed.A business will often create variations of their products to better satisfy each of the market segemnts.

A target market is a market which the business aims its products at, they will usually have very special features to make it appeal more to the target market.A business with a specific (Niche) market will often have a smaller market size, but a greater share in the market.

The market size can be measured in either the quantity of sales to a market, or in the value of sales within a market.

A businesses market share is the percentage of the total market size that a business has, so either the percent of the total sales, or percentage of total revenue.

Market growth is where there is an increase in demand for a product. This can be over a short period of time or a long period of time depending on the price of the product.

The type of business ownership refers to how many owners a business has:A sole trader has one owner whereas a partnership has two to twenty owners.Both of these organisations are relatively easy to set up, and the owners have unlimited (shared) liability.

Limited companies come in two forms: Public Ltd Companies – Can sell their shares

on the stock market to raise finance Private Ltd Companies – Can only sell their

shares to family and friendsBoth Ltd companies must fill in two key documents, Memorandum and articles of association, other key features include having to send a copy of annual accounts to the registrar, and must hold an annual AGM to keep its shareholders informed.

This type of organisation is set up to provide a service usually to less well off people or countries. The workers within the business will either work voluntarily or will be paid for through contributions from the general public or government subsidies/grants.

Good examples of these types of businesses are and charity, such as oxfam.

Share capital is the value to shares that can be sold to turn into cash capital, or can be exchanged for goods directly.

A bank loan is simply money borrowed from the bank that must be paid back with interest, loan capital is the way in which this loan is invested into a business. In such a way it can be profitable to repay the loan.

An overdraft is an agreement with the bank to allow you to borrow money on a bank account. Similar to a loan in the sense interest almost always has to be paid but it is far shorter term and more flexible.

Venture Capital is the money invested by venture capitalists, they are experienced businessmen and women who finance an idea for a return on the profits.

The panel on dragons den are venture capitalists.

Personal finance is finance that is brought forward by the owner, this is not a loan instead it is an investment and so no interest needs to be paid.Also with this kind of finance it can be invested when and where it is needed, unlike having to justify a loan with a bank, this can be time consuming.There are also tax incentives to both the individual and the business as a whole to invest personal finance into a business.

Business location is where the business chooses to have its home depot or outlets, and the reasons for why they have located where they have.Many things must be considered when locating a business, the business must be able to afford an adequately sized area at an affordable price. These two factors cannot be overcome they decide where a business can and cant set up.The business must balance this with how close they are to suppliers and customers, and if they are far away good transport links are vital.

An areas infrastructure refers to the transport links, an area with cheap, reliable bus services for example has a good infrastructure. One in which roads are heavily relied upon and are heavily congested meaning slow commuting has a bad infrastructure.

A good infrastructure means a business will not have to locate as close to its staff or customers.

A permanent employee has a contract that continues indefinitely, whereas a temporary one last for a set period of time, or until a specific job or jobs are completed.

This type of employment refers to the amount of hours worked per week, usually below 35 hours is called part time, and above is full time.

Full time employees are more likely to work a regular 9 until five day, and are expected to finish work rather than to just end the day at five, part time employee’s will usually work set hours and get paid overtime for extra work.

Consultants are people external to a business who can be employed on temporary, permanent, long or short term contracts. Usually they will bring a specialised area to the business that is too expensive to hire an individual into the business.

Consultants are people external to a business who can be employed on temporary, permanent, long or short term contracts. Usually they will bring a specialised area to the business that is too expensive to hire an individual into the business.

Break even is how a business works out the volume of sales required to cover its costs,

Break even = fixed costs – units*(contribution)

Fixed costs are costs that do not change based upon how many units the business sells, such as rent.

Variable costs are costs that vary as the business produces more, such as cost of raw materials

Total costs is simply the sum of these costs

Revenue is the income a business gets from selling its goods, and dose not take into account the costs.

Revenue = units sold * cost

This is the financial cost to a consumer of purchasing the good, and is usually where the supply and demand produce and consume the same amount.

This is the financial benefit the producer takes from the production and selling of a good, and is worked out by variable costs – selling price.

A cash flow is the way money moves in and out of a business, a cash flow report is normally used to assess how well money is being spent in the business. A positive cash flow is desired as it means the business is generally making more money than it is spending.A cash flow forecast is a prediction of how the cash will flow usually over a yearly basis.

This is the two ways money can flow for a business, in via income, or out via expenditure.

Income is usually from sales revenue, and expenditure is the costs.

A business will set budgets to guide the business, budgets should be reasonable and rewarded if successful to increase staff motivation.

Missed budgets are a sign of overspending, but as they are only a prediction variances must be analysed.

An income budget is a minimum goal of how much money the budget setters want to flow into the business.

Similarly an expenditure budget is a maximum goal of how much money should flow out of the business.

A profit budget combines these two and aims for a minimum profit. Profit of course being total revenue – total expenditure

A businesses main objective is usually to make a profit, but it could be an objective to allow the business to make more profit.

Such as to expand, to reduce costs, or to increase market share.

Any small new business of course needs to be started up, and this phrase refers to how well the owners introduces the new business to a market.

Any new business that hopes to be successful must have a unique selling point or idea to make it successful in the market.