BUSINESS PLANNING - Small to Medium Enterprises (SMEs)

Question 1

Define Economic Growth

Answer 1

When a nation increases the real value of goods and services over a period of time

Question 2

Which of the following best defines an SME?
a) A business with less than 20 employees
b) A business with between 20 and 199 employees
c) A business with under 200 employees
d) A business with over 200 employees

Answer 2

C

Question 3

Define Economy

Answer 3

A system used to determine what to produce, how to produce and to whom production will be distributed

Question 4

According to the ABS, what percentage of private sector are SME’s?
a) 10
b) 50
c) 90
d) 99

Answer 4

D

Question 5

Define Gross Domestic Product
( GDP )

Answer 5

The total money value of all goods and services produced in Australia over a one - year period

Question 6

Which of the follopwing statement is FALSE in relation to the economic contribution of SMEs?
a) SMEs contribute approximately 55% of Australia’s GDP
b) Over 88% of exporting businesses in Australia are SMEs
c) SMEs employs approxiamately 68% of total private sector employment
d) Smaller businesses in Australia are more likely to invest in R&D than large business

Answer 6

B

Question 7

Define Balance Of Payment
( BOP )

Answer 7

A record of a country’s trade and financial transactions with the rest of the world over time, usually one year

Question 8

Which of the following would NOT contribute to SME success?
a) Target mass market
b) Focus on market niche
c) Entrepreneurial abilities
d) Flexibility and adaptability to change

Answer 8

A

Question 9

The five common ‘keys’ to SME success are:

Answer 9

• Flexibility
• Reputation
• Focus on target market
• Entrepreneurial abilities
• Access to information

Question 10

What terms refers to the record of a country’s trade and financial’s transaction with the rest of the world?
a) Exports
b) Balance of payment
c) Gross domestic product
d) Research and development

Question 11

An SME has failed when it is:

Answer 11

• unincorporated and declared bankrupt
• incorporated and either forced into liquidation or voluntary cessation

Question 12

What percentage of SMEs will fail within 10 years of establishment?
a) 30
b) 40
c) 60
d) 70

Note - SMEs have a high failure rate

Question 13

Define small to medium enterprises ( SME )

( 2 marks )

Question 14

Which of the following would NOT coontribute toii business failure?
a) Increase in economic growth
b) Poor financial management
c) Increasing competition
d) Failure to plan

Question 15

Outline THREE factors that can contribute to SME success

( 6 marks )

Question 16

What is the biggest difficulty facing SMEs when undertaking research and development?
a) Access to finance
b) Inappropiate legal structure
c) Lack of government support
d) Access to innovative employees

Question 17

Assess the economic contribution of SMEs

( 6 marks )

Answer 17

An SME sector contributes:
- approximately 55.8% of gross domestic product ( GDP )
- approximately 68.3% of total private sector employment
- to balance of payments, since they are often more successful at exporting than large businesses
- significantly to the level of R&D

Question 18

What is the total money value of all goods and services produuced in Australia ove a one-year period referred to as?
a) Export payments
b) Balance payments
c) Gross national income
d) Gross domestic product

Question 19

How can entering the global market lead to the long-growth of SMEs?