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Commerce Yearly Yr9 > Business > Flashcards

Business Flashcards

1
Q

What is an entrepreneur

A

a person who sets up a business or businesses, taking on financial risks in the hope of profit

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2
Q

What are the advantages of being an entrepreneur

A
  • opportunities for large profit
  • make your own decisions
  • no boss
  • develop creative ideas
  • challenge, reward, satisfaction
  • contribute to society
  • possible tax advantages
  • overcome unemployment
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3
Q

What are the disadvantages of being an entrepreneur

A
  • high costs
  • chance of failure
  • more responsibility
  • hard work, long hours
  • stress + worry
  • difficulty in selling business
  • constantly problem solving
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4
Q

What are the 4 characteristics of an entrepreneur

A
  • seeing and taking advantage of an opportunity
  • establishing a shared vision
  • demonstrating initiative, innovation, and resilience
  • appreciating the role of failure in success
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5
Q

What is a cost-benefit analysis

A

a detailed examination of the strengths and weaknesses of different alternatives to see whether benefits outweigh the costs

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6
Q

What do entrepreneurs do if benefits outweigh costs in a cost- benefit analysis

A

act on alternatives

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7
Q

Why are cost- benefit analysis’ useful

A
  • comparing alternatives or projects
  • estimating resources needed to complete project
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8
Q

What does a good cost benefit analysis do

A
  • identifies opportunities
  • proposes alternative ways to take advantage of opportunities
  • calculates the costs + benefits
  • compares costs + benefits to determine if benefits outweigh costs
  • informs the decision about the best alternative to recommend
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9
Q

What is market research

A

collecting and analysing information about customers and the business opportunities available

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10
Q

Why is market research helpful

A

helps entrepreneurs make better decisions by understanding consumer behaviour

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11
Q

What are the 3 steps of market research

A
  1. determining information needs
  2. collecting data from primary + secondary sources
  3. Analysing + interpreting data
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12
Q

What are the 4 factors included in market research

A
  • location
  • demographics
  • competition
  • target markets
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13
Q

Why is location important in market research

A
  • good location will lead to more sales + profit
  • impacts total sales + costs
  • a good location can maximise profit and minimise cost
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14
Q

What are demographic factors of market research

A

population characteristics that affect customer spending. Includes age, gender, marital status, family size, and income

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15
Q

Why is demographic research important

A

examinations of a region’s demographic pattern will provide a clearer picture of a business’ possible customers

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16
Q

What is competition in market research

A

rivalry among businesses that try to supply the needs and wants of a market

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17
Q

What is a sustainable competitive advantage

A

ability of a business to develop strategies that will ensure it has an ‘edge’ over its competitors for a long period of time

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18
Q

What is target markets in market research

A

the group of customers to whom the business intends to sell its product to

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19
Q

Why is target market important in market research

A

Businesses concentrate their marketing activities on their target market

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20
Q

define the term incorporated

A

the process companies go through to become a separate legal entity from the owner/s

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21
Q

Why are incorporated companies a good option for entrepreneurs

A

regardless of what happens to individual owners of the company, the business continues to operate - the business has taken a life of its own

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22
Q

what is an unincorporated business

A

no separate legal existence from its owner/s and will be either a sole trader or partnership

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23
Q

What is a sole trader

A

a business that is owned + operated by one person

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24
Q

describe the characteristics of a sole trader

A
  • unlimited liability
  • the owner can be forced to sell personal assets such as the house or car to pay for the business debts
25
Q

Describe a partnership business

A
  • owned and operated by 2-20 people
  • unlimited liability
26
Q

describe a proprietary company

A
  • 2-50 private owners (shareholders)
  • ‘Pty Ltd’ at the end of the company name
  • limited liability - if the business cannot pay its debts, a shareholder generally loses only the money invested in the business
27
Q

describe a public company

A
  • listed on the ASX
  • general public may buy + sell shares in those companies
  • has ‘Ltd’ or ‘Limited’ in its name
28
Q

define limited liability

A

if the business cannot pay off its debts, a shareholder generally loses only the money invested in the business

29
Q

define unlimited liability

A

The owner of the business can be forced to sell personal assets such as a house or car to pay for the business debts

30
Q

describe debt when financing a business

A

other people’s money comes from banks, finance companies, trade suppliers

31
Q

define equity when financing a business

A

the owners or shareholders contribute capital, retained profits, ordinary shares

32
Q

what is a secured loan

A

the borrower offers an asset as security e.g a house

33
Q

what is an unsecured loan

A

the borrower does not need to have an asset to offer as security, but the interest rate is usually higher

34
Q

what is a prospectus

A

a legal document issued by companies that are offering securities for sale

35
Q

what does a prospectus include

A
  • history of the business
  • company’s business model
  • risks
  • description of management
  • financial information
36
Q

what are some reasons why people start their own business from scratch

A
  • a person creates a unique product and wants to market their invention
  • an existing small business does not satisfy the needs of customers
  • the market has grown and existing businesses cannot support additional customers
37
Q

What are the advantages to starting a business from scratch

A
  • owner has freedom to set up the business exactly as he or she wants
  • owner has flexibility of location, target market, products, customer service
  • owner’s objectives can be matched more closely to the business
38
Q

what are the disadvantages of starting a new business

A
  • high risk and a measure of uncertainty
  • without previous business reputation, it may be difficult to make profit
39
Q

why would someone want to purchase an existing business

A
  • the business is already operating and everything associated with the business is included in the purchase
  • stock, equipment, existing customer base, staff, reputation, and goodwill is included
40
Q

what is goodwill

A

the value of the brand

41
Q

what are the advantages to purchasing an existing business

A
  • sales to existing customers will generate instant income
  • equipment is available for immediate use
  • good business history increases future success
42
Q

what are the disadvantages of purchasing an existing business

A
  • if the business had a poor reputation there’s an uncertainty for success
  • it may be difficult to assess the value of the goodwill
43
Q

what is meant by franchising

A

under a franchise agreement, a person(franchisee), buys the right to use the business name and distribute the goods or services of an existing business

44
Q

what is the main advantage for franchising

A

products, equipment, premises design and marketing are usually established

45
Q

what is the main disadvantage for franchising

A

the franchisor usually controls everything to do with price, suppliers, and health regulations

46
Q

What are the 3 levels of government

A

federal, state, local

47
Q

what are the 3 major regulations affecting business operations

A
  1. work health and safety
  2. taxation
  3. environmental regulations
48
Q

what is the work health and safety regulation

A

employers must ensure the health, safety, and welfare at work of all employees

49
Q

what is included in the taxation regulation

A
  • income tax or pay-as-you-go tax
  • company tax
  • goods and services tax
50
Q

what is the environmental regulation

A

all business owners make sure they comply with all environmental laws covering water, air, land, noise pollution, and waste management

51
Q

what are the 5 main marketing strategies

A
  • personal selling
  • relationship marketing
  • sales promotion
  • publicity
  • public relations
52
Q

what are the 2 main planning considerations when opening a business

A

staffing, location

53
Q

why is good staff important for the success of a business

A

good staff provide the business with a competitive advantage, especially if the business offers a service where the customers come into direct contact with the employees

54
Q

what does the location of a business affect

A

-cost
- closeness to customers
- closeness to competitors
- visibility/ accessibility
- closeness to suppliers

55
Q

what does ‘ethics’ mean

A

moral issues and choices - what is right or wrong

56
Q

Why is it important for businesses to respond ethically to issues

A

impacts the image and reputation of the business as well as the behaviour of employees

57
Q

what is corporate social responsibility

A

the way a business considers the financial, environmental, and social impacts of its decisions

58
Q

what are the 2 goals that a socially responsible business attempts to do

A

increase profit and provide for the greater good of society

59
Q

what are the benefits of ethical decision making and corporate social responsibility

A
  • improvement in staff turnover and staff feel more valued and motivated
  • lower business costs
  • increase in employee productivity
  • increase in sales(customers often buy from sustainable and ethical businesses)
  • improved business reputation
  • marketing opportunities

Commerce Yearly Yr9 (1 decks)

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