AOS1 - the business idea

Question 1

entrepreneurship

Answer 1

the act of starting and operating a new business in response to opportunities assuming all the risk in the hope of making a profit

Question 2

business

Answer 2

any activity conducted by an individual(s) to produce and sell good and services that satisfy the needs of society, as well as making profit

Question 3

profit

Answer 3

what is left after business expenses have been deducted from money earned from revenue

Question 4

how are entrepreneurship and pursing business opportunities related?

Answer 4

entrepreneurs are aiming to find gaps in the market or ways to advance their business

Question 5

how are entrepreneurship and innovation related?

Answer 5

entrepreneurs need to be able to change and adapt their businesses products

Question 6

how are entrepreneurship and seeking growth related?

Answer 6

entrepreneurs are aiming to explore new things in order to grow their business

Question 7

benefits of owning a business

Answer 7

being your own boss (independence)
possibility of making a profit
challenging, rewarding, and satisfying
increasing personal wealth
possible tax advantages

Question 8

limitations of owning a business

Answer 8

hard work and long hours
risk of failure
stress and worry
constantly solving problems
meeting the demands of customers, suppliers, and financiers

Question 9

personal motivators

Answer 9

to become independent
to make a profit

to fulfil a market need (refers to products that customers require but might not be available.)
eg: finding a gap in the market, finding a place which doesn’t supply the desired product

to fulfil a social need (helping others)
eg: providing opportunities for local unemployed people, creating access to a better quality of life for disadvantaged members of the community, focusing on some sort of environmental need.

Question 10

characteristics of a business manager

Answer 10

starts and see through long-term projects
good people management skills
organisational skills
take managed risks

Question 11

characteristics of a business entrepreneur

Answer 11

takes risks
shares vision for business and its future
demonstrates innovation, initiative, and enterprise

Question 12

business opportunity

Answer 12

a set of circumstances that presents itself as an avenue to success

Question 13

innovation

Answer 13

improving the current way of doing things or creating a better way to do things

Question 14

market opportunities

Answer 14

observing the market and finding business opportunities based on their current status

Question 15

changing customer needs

Answer 15

changing incomes
changing tastes and fashion
changing number of potential customers
changing prices of complementary and substitute goods
changing population
changing expectations about the market

Question 16

technological development

Answer 16

the development of new processes and products to create business opportunities

Question 17

research and development (R&D)

Answer 17

a set of activities undertaken to improving existing products, creating new ones etc

Question 18

why is goal setting important?

Answer 18

to give the business a direction for the future

Question 19

global market

Answer 19

goods and services exchanged around the world

Question 20

SMART goals

Answer 20

specific (clear and focused)
measurable (quantifiable)
attainable (challenging but realistic)
relevant (worthwhile)
time bound (deadline set)

Question 21

financial goals

Answer 21

making a profit
increasing sales
reducing costs

Question 22

social goals

Answer 22

community service
ecological sustainability
social justice

Question 23

what is decision-making in business?

Answer 23

you identify all the available options and choose one course of action to pursue

Question 24

decision-making process?

Answer 24

develop goals
outline the facts
identify alternative solutions
analyse the alternatives
choose one alternative and implement it

Question 25

what is decision making important to consider?

Answer 25

business owners must be able to choose courses of action as they develop their business and transform it into reality

Question 26

business concept

Answer 26

describes the core activities of a business, as well as specific features and values of the goods and services that it provides

Question 27

how does business concept development start?

Answer 27

entrepreneurs have goals and certain motivations when scanning business opportunities
all of these factors feed into the concept development of their business

Question 28

sources and inspirations for a business concept

Answer 28

sources: your own experiences, interests, abilities, or imagination.
inspiration: gap in the market, reading and researching, how can current products be improved?

Question 29

intellectual property (IP)

Answer 29

any creation of the mind such as a new invention, a brand, design, or artistic creation
a business needs to protect its IP so that the competition doesn’t copy them or rip them off

Question 30

methods to protect IP

Answer 30

patents: protect new inventions.
trademarks: protect something that is used to identify where a product or service comes from (eg logo).
copyrights: protect the expression of a person’s ideas.
design rights: protect the way a product looks.
domain name: a business’ unique address on the internet.

Question 31

market research

Answer 31

is the business concept new, or does it already exist somewhere, somehow?
who will buy the product?
why will they need to buy the product?
how big is the market?
who are the competitors?

Question 32

steps of market research

Answer 32

identify what information you need
gathering relevant information from appropriate sources
analysing or interpreting the relevant results

Question 33

why is it important to analyse market research?

Answer 33

to give the potential business owner an idea of the market conditions, such as the number of potential customers, the level of competition, and potential growth

Question 34

feasibility study

Answer 34

an assessment of the business idea’s potential for success
this involves determining how practical the idea is and if it would successfully translate to the market.

Question 35

what can a feasibility study include?

Answer 35

an assessment of the market
consideration of operations
analysis of commercial feasibility
understanding of prior attempts to start similar businesses

Question 36

economy

Answer 36

a system set up to determine what to produce, how to produce, and to whom production will be distributed

Question 37

capitalism

Answer 37

a system where a country’s trade and industry are controlled by private owners for profit, instead of the state, and where prices are largely determined by supply and demand.
(Australia has a capitalist economy, with private ownership)

Question 38

how do businesses contribute to the health and prosperity of Australia?

Answer 38

employment: keeps economy healthy

tax revenue for the government: businesses pay tax, which gives the government money to take of the nation

economic growth: an increase in the real value of goods and services over a period of time.

export earnings: the sale of one country’s goods to another country. exporting products contributes to Balance of Payments (a record of a country’s trade and financial transactions with the rest of the world)

social wellbeing: defined as how well a nation’s people live. business pursuits improve quality of life for many. also provides benefits for employees.

corporate social responsibility: managing a business in such a way that the broader social welfare of the community is taken into consideration when making business decisions. (treating customers fairly, looking after environment and community, productivity increases)

Question 39

how does the government foster a culture of business innovation and entrepreneurship?

Answer 39

federal and state governments support businesses to get them to conduct R&D via direct funding, grants, ad tax benefits to unis, businesses, and publicly funded research agencies
local councils can also provide grants and funding programs, encouraging the innovation and growth of creative and sustainable business ideas