OCR GCSE Business key terms

A person who poses as an ordinary customer to assess the standard of service and report their findings to a business.

Something essential, such as food, shelter or warmth.

The difference between total cash inflow and total cash outflow during a time period: $\text{Net cash flow} = \text{Total inflow} - \text{Total outflow}$.

Profit remaining after both direct costs and overheads have been deducted from revenue.

Net profit expressed as a percentage of total revenue: $\frac{\text{net profit}}{\text{total revenue}}\times100$.

An additional joint owner who invests money in a partnership in exchange for a share of ownership and profits.

A small, specialised section of a larger market serving customers with particular needs.

A way of encouraging employees’ effort and commitment without directly rewarding them with money.

An organisation whose main purpose is not to distribute profits to owners, but to fulfil another purpose, such as providing a community service.

Something an individual, group or business aims to achieve.

Moving business activities from the home country to another country.

Training undertaken away from employees’ normal work duties, such as attending a course at a college or training centre.

Training undertaken in the workplace while employees learn through their job duties, often with guidance from experienced colleagues.

The cash balance at the beginning of a time period, carried forward from the previous period’s closing balance.

The business function that organises the transformation of inputs, such as materials and labour, into goods or services.

Expansion through a business’s own activities rather than by merging with or taking over another business.

The arrangement of job roles, responsibilities and reporting relationships within a business.

A diagram showing job roles and reporting relationships within a business.

The quantity of goods or services a business produces over a particular period.

An agreed facility allowing a business to spend more money than it has in its bank account, up to a set limit.

Personal money that an owner invests in their business.

A business owned by two or more partners who can contribute finance and share responsibility. In an ordinary partnership, partners have unlimited liability.

Working fewer weekly hours than the employer’s normal full-time working week.

Customers attracted to a business because they happen to pass its premises.

Money an employee receives in return for their work, such as a wage or salary.

Setting a low initial price for a new product to attract customers and build market share, then increasing it once the product is established.

A document setting out the essential and desirable qualifications, experience, skills and personal attributes of a suitable candidate.