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Prelim Business Studies > Business Planning > Flashcards

Business Planning Flashcards

1
Q

Identify four contributions SME’s make to the Australian economy.

A

75% of employment in the private sector.
50% of all products produced each year.
50% of Australia’s GDP.
Significant innovation.

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2
Q

Identify a situation where SME’s have an advantage over big businesses.

A

They have a higher success rate during a GFC.

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3
Q

Identify a disadvantage SME’s have over big businesses.

A

They pay more taxes.

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4
Q

Identify five factors that lead to the success of SME’s.

A 
Ability of the owner.
Research and information gathering.
Vision and flexibility.
Specialisation of market.
Location.
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5
Q

Identity five factors that lead to the failure of SME’s.

A 
Lack of experience.
Undercapitalisation.
Competition.
The economy.
Lack of financial training.
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6
Q

Identify five beneficial qualities for an SME owner to have.

A 
Ambition
Motivation
People Skills
Persistence
Self-Belief
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7
Q

Identify four factors affecting the viability of a location.

A

Visibility
Accessibility
Competition
Convenience

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8
Q

Identify two factors that can influence how an individual establishes an SME.

A

Qualifications

Personal culture

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9
Q

Identify an advantage and disadvantage that migrants often have when establishing a business.

A

They have a strong work ethic.

They lack a formal education.

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10
Q

Identify three reasons that women are opening SME’s at three times the rate of men.

A

Flexibility
Avoiding discrimination
Becoming financially independent

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11
Q

Identify five sources of information relevant to establishing a business and what type of information they provide.

A

Accountant - Finance
Solicitor - Legal
Chamber of Commerce - Assistance
ABS - Statistics
Census - Statistics

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12
Q

What does ABS stand for?

A

The Australian Bureau of Statistics.

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13
Q

Define an SME.

A

A business with 1-200 employees.

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14
Q

Describe market analysis.

A

Conducting primary and secondary research on the current market conditions. It assists in deciding how to set the price of products and services.

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15
Q

Describe Cost+Margin pricing.

A

Pricing based on COGS + the required profit margin.

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16
Q

Describe Market-Based pricing.

A

Pricing based on supply and demand.

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17
Q

Describe Competition-Based pricing.

A

Pricing based on charging more, less or equal to competitors.

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18
Q

Describe Penetration pricing.

A

Setting a low price to achieve market share.

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19
Q

Describe Loss Leader pricing.

A

Selling for a loss in order to clear stock or attract customers.

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20
Q

Describe Price Skimming.

A

Charging the highest reasonable price for a product to maximise profitability.

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21
Q

Describe Prestige pricing.

A

Charging a high price to create the illusion of luxury, exclusivity and quality.

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22
Q

Describe RRP.

A

Recommended Retail Price is the price a manufacturer recommends.

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23
Q

Identify what the term is for when a manufacturer demands that a retailer sells a product at RRP.

A

Resale Price Maintenance.

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24
Q

Identify the three types of retail locations.

A

Shopping Centre
Shopping Strip
Online Shopping

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25
Q

Identify three advantages of shopping centres.

A

High volume of trade.
Sought after location.
Easy accessibility.

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26
Q

Identify three disadvantages of shopping centres.

A

High rent.
High competition.
Mandatory trading hours.

27
Q

Identify four characteristics of a shopping strip.

A

Large variety.
High competition.
Viewed as a shopping destination.
Questionable accessibility.

28
Q

Identify six reasons why online shopping is growing.

A 
Wide variety.
24hr access.
Competitive pricing.
Low overheads like wages.
Low rent.
Convenient.
29
Q

Identify the two types of finance.

A

Debt finance and equity finance.

30
Q

Identify three types of debt finance.

A

Overdraft
Mortgage
Lease

31
Q

Identify the two types of equity finance.

A

Retained profits

Capital

32
Q

What law established that all businesses must have their name registered, unless the business is the owner’s name?

A

The NSW Business Names Act 1962

33
Q

What is zoning, and what are the four most common types of zoning?

A

When the local government regulates land usage by only allowing it to be used for certain purposes.

Residential, commercial, agricultural and industrial.

34
Q

Which level of government can inspect for appropriate quality of food handling, hygiene, food storage and food temperature?

A

Local Government

35
Q

Which government business can name and shame repeat offenders for not complying to hygiene regulations.

A

The NSW Food Authority

36
Q

What act replaced the Trade Practises Act 1972 that protects consumers from misleading conduct?

A

The Competition and Consumer Act 2010

37
Q

Identify a direct cost of employing staff.

A

Wages

38
Q

Define on-costs.

A

Non-wage expenses from employee entitlements.

39
Q

Identify four employee entitlements that incur on-costs.

A

Annual leave
Sick pay
Long-Service Leave
Superannuation

40
Q

Identify two on-costs that are not incurred by entitlements.

A

Worker’s Compensation Insurance

Payroll Tax

41
Q

Identify four federal taxes.

A

PAYG - Pay As You Go
FBT - Fringe Benefits Tax
GST - Goods and Services Tax
GGT - Capital Gains Tax

42
Q

Describe PAYG.

A

The Pay As You Go tax is a tax paid on a weekly basis on the wages made that week.

43
Q

Describe FBT.

A

The Fringe Benefits Tax is a tax paid by employers on the benefits they give to employees.

44
Q

Describe GST.

A

The Goods and Services Tax is a 10% tax paid by businesses on the sale of products and services.

45
Q

Describe the Capital Gains Tax.

A

A tax made on profits made from the sale of assets.

46
Q

Identify two state taxes.

A

Stamp Duty

Payroll Tax

47
Q

Describe stamp duty.

A

A tax on the change of ownership of a property or car.

48
Q

Describe payroll tax.

A

A tax paid by an employer when their payroll exceeds $638,000 p/a.

49
Q

Describe local rates.

A

Locals rates are paid by individuals or businesses based on the value of land. Rates include the cost for sewerage, rubbish removal and water.

50
Q

How is a situational analysis constructed?

A 
By identifying:
Strengths        - Inner advantages
Weaknesses   - Inner disadvantages
Opportunities - Outer advantages
Threats           - Outer disadvantages
51
Q

Identify what wages are usually based off.

A

A percentage of sales.

52
Q

Explain two strategies for organising operations.

A

Using CAD/CAM programs to reduce wastage and increase efficiency.
Using cost centres to allocate resources and expenses.

53
Q

Identify two strategies for organising marketing.

A

Utilising a marketing plan containing the marketing mix.

Have specific goals for what marketing should accomplish.

54
Q

What do CAD and CAM stand for?

A

Computer Aided Design

Computer Aided Manufacturing

55
Q

Identify five strategies to organise finance.

A 
Organise sources of finance.
Match terms of loans with the lifespan of an asset.
Use budgets
Manage revenue generation
Utilise measurable KPIs.
56
Q

What does KPI stand for?

A

Key Performance Indicators.

57
Q

Identify six things that must be organised within human resources.

A 
Rostering
Training
Recruitment
Development
Salaries
WHS
58
Q

Identify four techniques used in forecasting.

A

Using historicals (past figures)
Identifying trends
Observing competition
Comparing to industry averages

59
Q

Identify two areas that are often forecasted.

A

Total revenue and total costs.

60
Q

How is total revenue calculated when multiple products with different prices are being sold?

A

Through the average spend.

61
Q

Define monitoring.

A

Measuring actual performance compared to expected performance.

62
Q

What is actual performance often compared to in monitoring?

A

KPIs.

63
Q

Define evaluating.

A

Examining actual performance and determining success or failure based on KPIs and budgets, then establishing new KPIs and budgets.

Prelim Business Studies (5 decks)

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