Business key terms

The ability of a business to compete successfully with other businesses, for example through its prices, quality or customer service.

Setting prices based on the prices rivals charge for similar products, usually at or close to their prices.

A business that rivals another business for customers.

Setting a selling price similar to those charged by competitors for comparable products.

Following the legal requirements that apply to a business.

Expenditure incurred by a business to meet legal requirements, such as staff training, safety equipment or legal advice.

The use of computer software to create and alter digital designs of products, often as two-dimensional drawings or three-dimensional models.

The use of computers to control machines and assist manufacturing operations.

Belief in your own ability and in the potential of your business idea.

Providing the expected standard repeatedly, rather than only occasionally.

Reliably meeting expected standards each time a good or service is supplied.

A person who uses goods or services to satisfy their wants and needs.

Money received by consumers, including earnings from employment, pensions, benefits and investments.

Laws protecting customers against unfair business practices and problems with the goods or services they buy.

Money spent by individuals and households on goods and services for personal use.

An agreement between an employer and an employee setting out the terms of employment, including working hours and pay.

The selling price of one unit minus its variable cost. This is the amount each sale contributes towards covering fixed costs and, once those are covered, profit.

How easy it is for customers to access, buy and use a product or service.

Organising activities across a business so that different people and departments work together towards shared objectives.

A tax on a company’s profits.

An expense incurred by a business in producing and selling goods or services.

The cost of producing or purchasing the goods or services sold during a period.

An online advertising charging method in which the advertiser pays when someone clicks on its advertisement.

Setting a selling price by adding a mark-up to the cost of producing or supplying a product.

The ability to develop original ideas or find new ways to solve problems.

A person or organisation to whom a business owes money.

A sale in which the customer receives goods or services now and pays later.

Raising finance through contributions from many people, usually through an online platform.

An applicant-prepared document summarising qualifications, work experience, skills and other relevant information.

A person or organisation that buys a good or service from a business.