AOS1 - the business idea Flashcards
unit one
entrepreneurship
the act of starting and operating a new business in response to opportunities assuming all the risk in the hope of making a profit
business
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
profit
what is left after business expenses have been deducted from money earned from revenue
how are entrepreneurship and pursing business opportunities related?
entrepreneurs are aiming to find gaps in the market or ways to advance their business
how are entrepreneurship and innovation related?
entrepreneurs need to be able to change and adapt their businesses products
how are entrepreneurship and seeking growth related?
entrepreneurs are aiming to explore new things in order to grow their business
benefits of owning a business
being your own boss (independence)
possibility of making a profit
challenging, rewarding, and satisfying
increasing personal wealth
possible tax advantages
limitations of owning a business
hard work and long hours
risk of failure
stress and worry
constantly solving problems
meeting the demands of customers, suppliers, and financiers
personal motivators
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.
characteristics of a business manager
starts and see through long-term projects
good people management skills
organisational skills
take managed risks
characteristics of a business entrepreneur
takes risks
shares vision for business and its future
demonstrates innovation, initiative, and enterprise
business opportunity
a set of circumstances that presents itself as an avenue to success
innovation
improving the current way of doing things or creating a better way to do things
market opportunities
observing the market and finding business opportunities based on their current status
changing customer needs
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
technological development
the development of new processes and products to create business opportunities
research and development (R&D)
a set of activities undertaken to improving existing products, creating new ones etc
why is goal setting important?
to give the business a direction for the future
global market
goods and services exchanged around the world
SMART goals
specific (clear and focused)
measurable (quantifiable)
attainable (challenging but realistic)
relevant (worthwhile)
time bound (deadline set)
financial goals
making a profit
increasing sales
reducing costs
social goals
community service
ecological sustainability
social justice
what is decision-making in business?
you identify all the available options and choose one course of action to pursue
decision-making process?
develop goals
outline the facts
identify alternative solutions
analyse the alternatives
choose one alternative and implement it
what is decision making important to consider?
business owners must be able to choose courses of action as they develop their business and transform it into reality
business concept
describes the core activities of a business, as well as specific features and values of the goods and services that it provides
how does business concept development start?
entrepreneurs have goals and certain motivations when scanning business opportunities
all of these factors feed into the concept development of their business
sources and inspirations for a business concept
sources: your own experiences, interests, abilities, or imagination.
inspiration: gap in the market, reading and researching, how can current products be improved?
intellectual property (IP)
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
methods to protect IP
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.
market research
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?
steps of market research
identify what information you need
gathering relevant information from appropriate sources
analysing or interpreting the relevant results
why is it important to analyse market research?
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
feasibility study
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.
what can a feasibility study include?
an assessment of the market
consideration of operations
analysis of commercial feasibility
understanding of prior attempts to start similar businesses
economy
a system set up to determine what to produce, how to produce, and to whom production will be distributed
capitalism
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)
how do businesses contribute to the health and prosperity of Australia?
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)
how does the government foster a culture of business innovation and entrepreneurship?
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
