Chapter 10 SMEs

Question 2

Define SMEs

Answer 2

A small to medium enterprise can be defined as having 5-200 employees and posses characteristics such as
- independently owned
- local markets and locally based
- closely controlled by the owner/opertor
- bulk of capital provided by the owner

Question 3

What does SME stand for

Answer 3

small to medium enterprise

Question 4

What is GDP

Answer 4

GDP is the total value of all goods and services produced in Australia over a one year period - SMEs contribute about 50% of Australia’s GDP

Question 5

How do SMEs contribute to the economy

Answer 5

Economic contributions include
- employment
- GDP
- Invention and Innovation
- Balance of Payments (BOP)

Question 6

What is Balance of Payments (BOP)

Answer 6

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

Question 7

What are the key factors to an SME’s success

Answer 7

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

Question 8

What are the key contributors to an SME’s failure

Answer 8

• Failure to plan
• lack of information
• partnership problems
• insufficient capital