AOS 3 Flashcards
Business Resources
Things people/objects needed for a business to function properly - natural, labor and capital
Natural Resources
Come from the earth/natural environment, e.g. land/raw minerals
Labor Resources
People that provide their skills, effort and knowledge
Capital resources
Tools and machinery used to produce goods or services
Business Locations
Shopping centers, Online, retail shopping strips, home-based businesses
Factors affecting business location
Cost, visibility, proximity to customers, competitors and suppliers, complementary businesses
Sources of finance
Internal and external
Internal funds
Owners personal funds
External funds
Long (bank overdraft, loan) and short (mortgage, lease) term debt
Factors to consider for sources of finance
Terms of finance, business structure, overall cost, flexibility, level of control
Terms of finance
Sources relevant to business needs
the business structure - finance
Large business have more opportunities for equity capital than smaller businesses
Bank overdraft
When a bank allows a company or individual to overdraw their account up to an agreeable limit to help overcome a temporary cash shortfall
Types of legal business structures
Sole trader, partnership, company
Types of business models
Online, bricks and mortar, bricks and clicks, social enterprise, franchise, importer exporter
Business support services
Legal advice, technological advice, community based services, formal networks, informal networks
The business structure - terms of finance
Large business have more opportunities for equity capital than smaller businesses
Planning tools
Market research, SWOT
Market research
Assessing market, competitors and customers
SWOT
Strengths, weaknesses, opportunities, threats
Business plan
Executive summary, operations plan, financial plan, marketing plan
Corporate social responsibility management
The way in which a company treats people/environment
Types of corporate social responsibility management
Environmental issues, customer issues, staffing issues
+ of shopping centres
parking for several hundred cars, public transport, undercover, close to lots of other shops
- of shopping centres
expensive, longer opening hours, may need to rely on center for renewing lease
ignore
ignore
ignore
ignore
+ of retail shopping strips
near public transport, visibility to passing traffic, less cost than shopping centers, locals
- of retail shopping strips
lack of parking, no protection from weather
+ of home-based business
no renting, commuting time, work hours
- of home-based business
work-life balance, isolation no foot traffic/visibility
+ of online business model
cost of physical store, worldwide, delivery, more convenient
- of online business model
can’t see the product, fraud/theft, no face-to-face
+ of bricks and Mortar
can see the product, face-to-face
- of bricks and mortar
high rent cost, expenses can make it difficult to compete on prices
Bricks and clicks
Both online and bricks and mortar
+ of social enterprise
giving back to the community can be rewarding, improve the environment/community
- of social enterprise
no financial reward, difficult to obtain money on startup, significant entry cost
+ of franchise
proven business model, continued support
- of franchise
must follow rules, franchise fees and royalty payments
+ of importer exporter
ability to trade overseas, opportunity to grow and expand the business
- of importer exporter
some tax and restrictions, transport costs, foreign exchange, political, shipping and quarantine issues.
Types of legal advice
Accountant, solicitor, Bank managers
Types of technological advice
Business.gov.au, ICT consultant
Types of community based services
Business Enterprise Centres (BEC), Small Business Centres Victoria (SBCV)
Types of formal networks
Chambers of commerce, All levels of government, Trade Associations
Types of informal networks
Friends, colleagues, other small business owners
SWOT - strengths
popular product, skilled workforce, financial position
SWOT - weaknesses
staff, computer system, past failures, upgrade facility
SWOT - opportunities
new technology, national economy, interest rates, new markets, acquire other businesses
SWOT - threats
trends in our business, new laws, new competitors, current competitors
Executive summary
Summarize business objectives and goals
Operations plan
How the business is to be set-up, outline human resource needs
Financial plan
Decide on sources of finance, project cash-flow (revenue, sales, profit)
Marketing plan
How you will advertise your product/service, assess competitors marketing strategies
Environmental issues
Energy consumption, CO2 emissions, sustainable resources, animal cruelty, organic products
Customers issues
Customer service, treated fairly and equitably, products meet requirements and are high quality, refunds and exchanges
Staffing issues
Fair pay, child labor issues, safety and health (OH&S), employing disadvantaged people
+ of sole trader
Creative control, owner receives all profits, no partner dispute, less costly to operate, simplest form (less legal requirements), only personal income is tax-deductible
- of sole trader
Responsible for all legal disputes and damages, difficult to operate when sick, responsible for debts, difficult to expand revenue and profits when customer base grows and you don’t have employees
+ of partnership
Other people to rely on if one is sick, lower costs to operate, only taxed on personal income, variety of skills, minimum government regulation
- of partnership
Liable for all legal disputes, debts and loses, high risk of conflict between partners
+ of companies
Easier to attract finance, limited liabilities (greater spread of risk), long life-span, experienced management (board of directors), growth potential
- of companies
Double tax (on company and personal income), cost of formation (government), directors responsible for debts (may lead to dispute), must publish annual reports of audits
