Business GCSE
Business GCSE glossary
165 key terms for Business GCSE, A to Z, each linked to the topic pages that use it.
A
- Added Value
- The difference between the cost of purchasing raw materials and the price the finished goods are sold for.OCR
- Adding Value
- The process of increasing the worth of resources by modifying them, creating a difference between the cost of inputs and the selling price.OCR
- After-sales service
- The support provided to a customer after they have purchased a product, such as warranties or technical help.OCR
- Aim
- A long-term, general goal that sets the overall direction for a business.OCR
- As Described
- Goods supplied must match any description given to them, or any models or samples shown.OCR
- Automation
- The use of machinery and computer systems to perform tasks previously done by human workers.OCR
- Average Rate of Return (ARR)
- The average annual profit of an investment expressed as a percentage of the initial investment.OCR
B
- Batch Production
- A method of production where a group of identical products are made together, passing through the production stages at the same time.Eduqas, OCR
- Break-Even Point
- The level of output where total revenue equals total costs, resulting in zero profit and zero loss.Eduqas, OCR
- Budget
- A financial plan that sets out expected income and expenditure over a specific future period.OCR
- Business Rates
- A tax on non-domestic properties, calculated based on the property's rental value.OCR
C
- CAD (Computer-Aided Design)
- Using computer software to draw, design, and test 2D and 3D models of products before physical manufacturing begins.OCR
- Carbon Footprint
- The total amount of greenhouse gases produced directly and indirectly by a business.OCR
- Cash
- The money a business has immediately available to spend (notes, coins, and bank balances).OCR
- Cash Flow
- The flow of money into and out of a business over a period of time.OCR
- Cash Flow Forecast
- A forward-looking statement predicting the cash inflows and outflows of a business over a period of time.Eduqas, OCR
- Chain of Command
- The line of authority from the top of the hierarchy to the bottom.AQA, Eduqas, OCR
- Collateral
- An asset (like property) that a borrower offers to a lender to secure a loan.OCR
- Competitive Advantage
- A feature of a business that allows it to perform better than others in the same market.OCR
- Consumer Income
- The total amount of money earned by individuals or households.OCR
- Consumer Rights Act 2015
- The main piece of UK legislation protecting consumers when buying goods, services, and digital content.Eduqas, OCR
- Contract of Employment
- A legally binding agreement between an employer and employee detailing the terms of work.OCR
- Contribution
- Selling price minus variable cost per unit.OCR
- Crowdfunding
- Raising small amounts of money from a large number of people, usually online.OCR
- Customer Retention
- The ability of a business to keep its existing customers coming back to make repeat purchases.OCR
- Customer Service
- The assistance and advice provided by a company to those people who buy or use its products or services.OCR
D
- Delayering
- Removing one or more levels of management from an organisational structure.AQA, OCR
- Delegation
- Passing authority and responsibility for a task down to a subordinate, while retaining overall accountability.AQA, OCR
- Demographic Segmentation
- Dividing a market based on population characteristics such as age, gender, income, or occupation.OCR
- Development
- The process of preparing employees for future roles and responsibilities, focusing on long-term personal growth.OCR
- Discrimination
- Treating an individual or group unfairly based on a protected characteristic.OCR
- Disposable Income
- The money a consumer has left to spend or save after paying taxes and essential bills (like rent/mortgage).OCR
- Dividend
- A share of the business's profits paid to shareholders as a reward for their investment.OCR
- Dividends
- A share of the business profits paid to shareholders as a reward for their investment.OCR
- Downtime
- The period when machinery is not actively producing goods, often because it is being cleaned or reset.OCR
- Dynamic Markets
- Environments characterized by rapid and continuous change in consumer preferences, technology, and competitive rivalry.OCR
E
- E-commerce
- The buying and selling of goods and services over the internet.Eduqas, OCR
- Economic Climate
- The overall state of the economy, usually measured by factors like consumer income, unemployment, and interest rates.OCR
- Economies of Scale
- The reduction in average unit cost as a business increases its scale of production or purchasing.OCR
- Employment Law
- The legal framework that governs the relationship between employers and employees.OCR
- Employment Tribunal
- A legal court that deals with disputes between employers and employees over employment rights.OCR
- Enterprise
- The willingness to take risks, show initiative, and undertake new business ventures.OCR
- Entrepreneur
- A person who organises, operates, and assumes the risk for a business venture.OCR
- Equality Act 2010
- Legislation protecting individuals from discrimination in the workplace and in wider society.Eduqas
- Ethics
- The moral principles that guide how a business operates, going beyond what is strictly required by law.OCR
- Exchange Rate
- The value of one currency expressed in terms of another currency.Eduqas
- Extension Strategy
- Methods used to prolong the life of a product and prevent it from entering the decline stage of the product life cycle.OCR
- External Recruitment
- Filling a job vacancy by hiring someone who does not currently work for the business.Eduqas, OCR
- External Stakeholder
- Individuals or groups who are outside the business but are affected by its activities (e.g., customers, local community).OCR
F
- Fairtrade
- A movement that guarantees a minimum price to farmers in developing countries.OCR
- Finance Function
- The department responsible for managing the financial resources of a business, including recording transactions, planning, and supporting decisions.OCR
- Fit for Purpose
- Goods must be fit for the purpose they are supplied for, as well as any specific purpose made known to the retailer.OCR
- Fixed Costs
- Business expenses that do not change regardless of the amount of goods or services produced.Eduqas, OCR
- Flow Production
- A continuous process of producing large quantities of identical products, often using an assembly line.Eduqas, OCR
- Footfall
- The number of people passing by a particular location.OCR
- Fringe Benefits
- Non-cash financial rewards given to employees, such as a company car or health insurance.OCR
- Functional Areas
- The different departments within a business, typically Operations, Finance, Marketing, and Human Resources.OCR
G
- Globalisation
- The trend for markets to become worldwide in scope, with businesses operating across international borders.OCR
H
- Hierarchy
- The system of ranking and organising people in an organisation, with those having more authority at the top.AQA, OCR
- Hygiene Factors
- Elements of a job (like pay and conditions) that do not motivate but will cause dissatisfaction if absent.OCR
I
- Incorporation
- The legal process of forming a company, making it a separate legal entity from its owners.OCR
- Induction training
- Initial training given to a new employee to familiarise them with the business, health and safety, and their role.OCR
- Inferior Goods
- Products for which demand decreases when consumer income increases (e.g., budget brands).OCR
- Inflation
- The general increase in the level of prices in an economy over a period of time.Eduqas
- Infrastructure
- The basic physical and organisational structures needed for operation (e.g., roads, broadband, power grids).OCR
- Initial Public Offering (IPO)
- The process of a company offering its shares to the public for the first time.OCR
- Insolvency
- When a business is unable to pay its short-term debts as they fall due.OCR
- Interdependence
- The way in which the different functional areas of a business rely on each other to operate effectively.OCR
- Interest Rates
- The cost of borrowing money or the reward for saving money, expressed as a percentage.Eduqas
- Internal Recruitment
- Filling a job vacancy by appointing someone who already works for the business.Eduqas, OCR
- Internal Stakeholder
- Individuals or groups who are directly involved in the operations or ownership of the business (e.g., owners, employees).OCR
- Intrapreneurship
- The act of behaving like an entrepreneur while working within a large, established organization.OCR
J
- Job Description
- A document that outlines the duties, responsibilities, and tasks associated with a specific job.OCR
- Job Production
- A method of production where a single, unique product is made from start to finish to meet a specific customer's requirements.Eduqas, OCR
- Job Satisfaction
- How content an individual is with their job.OCR
- Just-in-Time (JIT)
- A stock control system where materials arrive exactly when they are needed for production, minimising storage.Eduqas, OCR
L
- Labour Turnover
- The proportion of staff leaving a business over a period of time.Eduqas
- Lead Time
- The amount of time that passes from the start of a process (placing an order) until its conclusion (receiving the delivery).OCR
- Limited Liability
- The legal protection where owners/shareholders only risk losing the amount they invested in the business, not their personal assets.OCR
- Living Wage
- A wage that is high enough to maintain a normal standard of living.OCR
- Logistics
- The management of the transportation and storage of goods from supplier to business to customer.OCR
- Loss Leader
- A product sold at a price below its cost of production to attract customers into a store, in the hope they will buy other, profitable products.OCR
M
- Margin of Safety
- The difference between current output and the break-even output.OCR
- Market Research
- The process of gathering, analysing, and interpreting information about a market, a product, or its customers.OCR
- Market Segmentation
- Dividing a broad target market into smaller, distinct groups of consumers with common needs or characteristics.Eduqas, OCR
- Market Share
- The proportion of total sales in a market accounted for by a particular brand or business.OCR
- Marketing Mix
- The combination of product, price, promotion, and place that a business uses to meet customer needs and achieve its objectives.Eduqas, OCR
- Mass Marketing
- Attempting to appeal to an entire market with one basic marketing strategy, ignoring segmentation.OCR
- Motivation
- The desire and willingness of an employee to work hard and perform well.OCR
- Multinational Company (MNC)
- A business that has operations (such as production or service facilities) in more than one country.OCR
N
- National Minimum Wage
- The lowest hourly rate of pay that an employer can legally pay a worker.OCR
- Need
- A good or service essential for living (e.g., food, water).OCR
- Net Cash Flow
- Total cash inflows minus total cash outflows for a specific period.OCR
- Net Profit
- Gross profit minus all other operating expenses.OCR
- Niche Marketing
- Targeting a very specific, small, and well-defined segment of the market.OCR
- Normal Goods
- Products for which demand increases when consumer income increases.OCR
O
- Objective
- A short-term, specific, and measurable target set to help achieve a business aim.OCR
- Off-the-job training
- Training that takes place away from the work area, often provided by specialist trainers.OCR
- On-the-job training
- Training that takes place while doing the job in the workplace.OCR
- Opening Balance
- The amount of cash available at the start of the month.OCR
- Organic Growth
- When a business expands from within, for example by opening new branches or launching new products.OCR
- Organisational Structure
- The way a business arranges its employees and roles to achieve its objectives.AQA
- Overdraft
- A facility that allows a business to withdraw more money from its bank account than it actually has, up to a limit.OCR
- Overtrading
- When a business expands too quickly without having the financial resources (cash) to support the expansion.OCR
P
- Partnership
- A business owned by two or more people who share the risks and rewards.OCR
- Person Specification
- A document detailing the qualifications, skills, experience, and personal attributes required by the ideal candidate.OCR
- Piece-rate Pay
- A payment system where workers are paid a fixed amount for every item they produce.Eduqas, OCR
- Price Skimming
- Setting a high initial price for a new product to maximize profit from early adopters.OCR
- Primary Research
- The collection of new, first-hand data directly from original sources.Eduqas
- Primary Research (Field Research)
- The collection of original, new data gathered specifically for the business's current needs.OCR
- Private Limited Company (Ltd)
- An incorporated business where shares are sold privately to friends and family.OCR
- Procurement
- The process of identifying what a business needs to buy, choosing suppliers, placing orders, and receiving deliveries.Eduqas, OCR
- Product Knowledge
- An employee's understanding of the features, benefits, and uses of the goods they sell.OCR
- Product Life Cycle
- The stages a product goes through from introduction to decline: Introduction, Growth, Maturity, Decline.Eduqas, OCR
- Product Recall
- When a business asks customers to return a faulty or unsafe product, usually at great expense to the business.OCR
- Profit
- The financial surplus remaining after all total costs have been deducted from total revenue.OCR
- Profit and Loss Account
- A financial document showing a business's revenue, costs, and resulting profit or loss over a past period.OCR
- Profit Sharing
- A system where a proportion of the company's profits is distributed to employees.OCR
- Protected Characteristics
- The nine specific traits protected by law under the Equality Act 2010 (e.g., age, race, sex).OCR
- Psychographic Segmentation
- Dividing a market based on consumer lifestyles, values, attitudes, and personalities.OCR
- Public Limited Company (PLC)
- A large incorporated business where shares can be bought and sold by anyone on the stock exchange.OCR
Q
- Qualitative Data
- Descriptive data based on opinions, attitudes, and feelings.OCR
- Quality
- The extent to which a product or service meets the expectations of the customer and is fit for purpose.OCR
- Quality Assurance
- A system of maintaining standards by building quality checks into every stage of the production process.Eduqas, OCR
- Quality Assurance (QA)
- The process of building quality checks into every stage of production to prevent errors from occurring.OCR
- Quality Control
- Inspecting products at the end of the production process to find defects.Eduqas
- Quality Control (QC)
- The process of inspecting products at the end of the production process to ensure they meet standards.OCR
- Quantitative Data
- Data that can be expressed as numbers and statistically analysed.OCR
R
- Recruitment
- The process of identifying a vacancy and attracting suitable candidates to apply.OCR
- Retained Profit
- Profit kept within the business to fund future expansion rather than being paid out as dividends.Eduqas, OCR
- Retention
- The proportion of employees who stay with a business over a given period.OCR
- Return on Investment (ROI)
- A measure of the profitability of an investment, calculated as a percentage of the original cost.OCR
- Revenue
- The total amount of money brought in by a company's operations, measured by price multiplied by quantity sold.Eduqas, OCR
- Reward
- The benefit gained from running a business, which can be financial (profit) or non-financial (independence).OCR
- Risk
- The probability of a negative outcome occurring as a result of a business decision.OCR
S
- Sample
- A proportion of the population chosen to represent the market as a whole in a research study.OCR
- Satisfactory Quality
- Goods must not be faulty or damaged when received, and must be durable and safe.OCR
- Secondary Research (Desk Research)
- The use of existing information that has already been collected by someone else.OCR
- Selection
- The process of assessing candidates and choosing the most suitable one for the job.OCR
- Share Capital
- Money raised from the sale of shares in a limited company.OCR
- Shareholder
- An individual or institution that owns a percentage of a limited company.OCR
- Social Enterprise
- A business with primarily social objectives whose surpluses are principally reinvested for that purpose.OCR
- Sole Trader
- A business owned and operated by one person.OCR
- Span of Control
- The number of subordinates directly reporting to a manager.AQA, Eduqas, OCR
- Staff retention
- The ability of a business to keep its employees and prevent them from leaving.OCR
- Staff turnover
- The rate at which employees leave a workforce and are replaced.OCR
- Stakeholder
- Any individual, group, or organisation that has an interest in, or is affected by, the activities of a business.OCR
- Stakeholder Conflict
- A situation where the objectives of one stakeholder group contradict the objectives of another stakeholder group.OCR
- Subordinates
- Employees who are below a manager in the hierarchy and report directly to them.OCR
- Supply Chain
- The sequence of processes and businesses involved in the production and distribution of a commodity.OCR
- Survival
- The objective of generating enough revenue to cover costs and remain trading.OCR
- Sustainability
- Operating in a way that meets present needs without compromising the ability of future generations to meet their own needs.Eduqas, OCR
T
- Target Market
- The specific group of customers that a business aims its products and marketing efforts towards.OCR
- Telesales
- Selling products or services directly to potential customers over the telephone.OCR
- Trade Credit
- An arrangement to buy goods or services now and pay for them at a later date, usually 30-90 days.OCR
- Trade-off
- A situation where having more of one thing means having less of another.OCR
- Trading Standards
- The local government departments that investigate consumer complaints and enforce consumer law.OCR
- Training
- The process of increasing the knowledge and skills of the workforce to enable them to perform their jobs effectively.OCR
U
- Unemployment
- The number or percentage of people of working age who are without a job but actively seeking one.OCR
- Unique Selling Point (USP)
- A feature or characteristic of a product or service that distinguishes it from its competitors.Eduqas, OCR
- Unlimited Liability
- The legal status where owners are personally responsible for all business debts.OCR
V
- Variable Costs
- Costs that change directly with the level of output (e.g., raw materials, transport).Eduqas, OCR
- Variance Analysis
- The process of comparing actual financial outcomes with the budgeted figures to identify differences (variances).OCR
- Venture Capital
- Capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.OCR
W
- Want
- A good or service that people desire but is not essential for survival.OCR
Where these terms come from
Each definition is one we publish on a Business GCSE topic page or study guide. Open a term to see how each exam board words it and which topic it belongs to. For the full course, go to Business revision or the glossary for every subject.
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