'Chap 2' - Small Business Decision Making

Question 1

Demand

Answer 1

Demand in business terms is the quantity of a product that consumers are prepared to purchase.

Question 2

Market Research

Answer 2

Market Research is a process of systematically collecting, recording and analysing information concerning a specific market.

Question 3

Market Conditions

Answer 3

Market conditions are the features of a market into which a new product or service is to be introduced, include factors such as the number of potential customers, level of competition and potential for growth.

Question 4

Innovation

Answer 4

Innovation is either creating a new product, service or process, or significantly improving an existing one.

Question 5

Research and Development

Answer 5

Research and Development is a set of activities undertaken to: improve existing products, create new products and improve production.

Question 6

Entrepreneurship

Answer 6

Entrepreneurship is the ability and willingness to start, operate and assume the risk of a business venture in the hope of making a profit.

Question 7

Business Entity

Answer 7

Business Entity is any organisation engaged in the production of goods and services.

Question 8

Incorporated Business

Answer 8

A business that is Incorporated has a separate legal entity from the owner(s)

Question 9

Sole Trader

Answer 9

A sole trader (proprietor) business is a business owned and operated by one person.

Question 10

Unlimited Liability

Answer 10

Unlimited Liability means the business owner is personally responsible for all the debts of his or her business.

Question 11

Partnership

Answer 11

A Partnership is an unincorporated legal business structure with a minimum of two and a maximum of 20 owners.

Question 12

Silent Partner

Answer 12

A silent or sleeping partner contributes financially to the business but take no part in the running of the partnership.

Question 13

Incorporation

Answer 13

Incorporation is the process that businesses go through to become a registered company and a separate legal entity.

Question 14

Shareholders

Answer 14

Shareholders (or members) are the owners of a company.

Question 15

Limited Liability

Answer 15

Limited liability means that the shareholders in a company cannot be held personally responsible for the debts of that business.

Question 16

Proprietary Company

Answer 16

A Proprietary (private) company is an incorporated business with a minimum of two, and a maximum of 50 private shareholders.

Question 17

Cooperative

Answer 17

A cooperative is a democratic organisation owned and controlled by the people it serves, who join together for a common benefit.

Question 18

Trust

Answer 18

A trust is a business structure where a trustee (usually a company) holds property or carries out business on behalf of the members of the trust known as beneficiaries.

Question 19

Goodwill

Answer 19

Goodwill is the monetary value attached to the reputation of a particular business.

Question 20

Franchise

Answer 20

A Franchise means buying the rights from another business to distribute its products under its name.

Question 21

Franchisor

Answer 21

A franchisor is an individual or organisation that grants a franchise.

Question 22

Franchisee

Answer 22

A franchisee is an individual or organisation that purchases a franchise.

Question 23

Zoning

Answer 23

Zoning is a means by which local councils allocate land for different uses, such as residential, commercial, recreational and industrial.

Question 24

Complementary Businesses

Answer 24

Complementary Businesses offer products or services that related to a different business and that may be of use to the customers of that business.

Question 25

Solicitor

Answer 25

Solicitors provide information concerning business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation.

Question 26

Accountants

Answer 26

Accountants provide valuable advice on all financial management issues and taxation obligation.

Question 27

Bank Manager

Answer 27

Bank managers are another valuable contact who can provide information and advice on financial services, sources of finance, and basic business management.

Question 28

Business Ethics

Answer 28

Business Ethics is the application of moral standards to business behaviour.

Question 29

Socially Responsible Management

Answer 29

Socially Responsible Management is managing an organisation in such a way that the broader social welfare of the community is taken into consideration when making business decisions.

Question 30

Stakeholders

Answer 30

Stakeholders are individuals or groups with an interest in the success of the business.