Business key terms

A research method that watches and records people's behaviour, such as how shoppers choose products.

The process by which a product or service becomes outdated as technology or consumer wants change.

Moving business activities from the home country to another country.

Training undertaken away from an employee’s normal work duties, such as a course at a college or training centre.

Training provided throughout employment to maintain, improve and update employees’ skills.

An online platform through which different businesses can sell their products to customers, such as Amazon or Etsy.

Training in which an employee learns while carrying out their actual job, usually with guidance from an experienced colleague.

The cash balance at the start of a period, equal to the previous period's closing balance.

Other costs of running a business that are deducted from gross profit, such as rent, marketing and administrative expenses.

An employee who carries out the business's main production or service activities.

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

The next best alternative given up when a choice is made.

The process of preparing and completing customer orders, including picking, packing and dispatching goods.

Expansion by developing a business’s existing activities rather than merging with or taking over another business. Also called internal growth.

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

A diagram showing the positions within a business and who reports to whom.

A new business concept or invention rather than a modification of an existing product, service or idea.

The number of goods or services a business produces in a given period.

Paying an external business to carry out work that could otherwise be performed within the business.

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

The general running costs of a business, such as rent and utilities.

An owner’s personal money invested in their business.

A business owned by two or more partners who share responsibility for running it.

Employment involving fewer working hours than an equivalent full-time role.

Working fewer hours than the normal full-time working week in that business.

Customers attracted to a business because they pass its premises, rather than making a planned journey specifically to visit it.

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

A method through which a business receives money from customers, such as an online card payment or a contactless payment.

Setting a low initial price for a new product to attract customers and build market share.

A value expressed as a number of parts out of 100.