Chapter 2-Small business — decision making

Question 1

Demand

Answer 1

The quantity of a product that consumers are prepared to purchase

Question 2

Market Research

Answer 2

A process of systematically collecting, recording and analysing information concerning a specific market.

Question 3

Market conditions

Answer 3

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

Question 4

Innovation

Answer 4

Either creating a new product, service or process, or significantly improving an existing one.

Question 5

Research and Development

Answer 5

S set of activities undertaken to: improve existing products, create new products and improve production

Question 6

Entrepreneurship

Answer 6

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

Any organisation engaged in the production of goods and services.

Question 8

Incorporated business

Answer 8

Has a separate legal entity from the owner(s).

Question 9

Sole Trader

Answer 9

A business owned and operated by one person.

Question 10

Unlimited liability

Answer 10

The business owner is personally responsible for all the debts of his or her business.

Question 11

Partnership

Answer 11

An unincorporated legal business structure with a minimum of two and a maximum of 20 owners.

Question 12

Silent Partner

Answer 12

Contributes financially to the business but takes no part in the running of the partnership.

Question 13

Incorporation

Answer 13

The process that businesses go through to become a registered company and a separate legal entity.

Question 14

Shareholders

Answer 14

The owners of a company

Question 15

Limited liability

Answer 15

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

Question 16

Proprietary Company

Answer 16

An incorporated business with a minimum of two, and a maximum of 50 private shareholders.

Question 17

Public company

Answer 17

A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market.

Question 18

Cooperative

Answer 18

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

Question 19

Trust

Answer 19

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 20

Goodwill

Answer 20

The monetary value attached to the reputation of a particular business.

Question 21

Franchise

Answer 21

Buying the rights from another business to distribute its products under its name.

Question 22

Franchisor

Answer 22

An individual or organisation that grants a franchise.

Question 23

Franchisee

Answer 23

An individual or organisation that purchases a franchise.

Question 24

Zoning

Answer 24

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

Question 25

Complementary business

Answer 25

Offer products or services that are related to a different business and that may be of use to the customers of that business.

Question 26

Solicitor

Answer 26

Provide information concerning business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation

Question 27

Accountant

Answer 27

Provide valuable advice on all financial management issues and taxation obligations

Question 28

Bank Manager

Answer 28

Provide information and advice on financial services, sources of finance, and basic business management

Question 29

Business Enterprise Centres (BEC) Australia

Answer 29

A not-for-profit network of business enterprise centres which provide support to small business owners.

Question 30

Chambers of Commerce

Answer 30

Local associations of business people, usually centred around a suburb or region

Question 31

Victorian Employers Chamber of Commerce and Industry (VECCI)

Answer 31

The state’s main employer group and Australia’s largest multi-industry employer organisation

Question 32

Small business Association of Australia and New Zealand

Answer 32

A lobby group that provides a forum for exchanging news and views relating to small business matters

Question 33

Trade associations

Answer 33

Offer specific industry information and assistance

Question 34

Federal government

Answer 34

A service to businesses of all sizes, offering access to all government departments with advice on everything from fair trading to taxation

Question 35

State Government

Answer 35

Provides entry and links to information and support on all aspects of starting and managing a business

Question 36

Local government

Answer 36

Offer advice on land zoning, assist with subsidised land and consider development applications

Question 37

Informal Networks

Answer 37

Business people can use their network of friends and colleagues, as well as other local business owners to gain information and advice

Question 38

Business ethics

Answer 38

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Question 39

Socially responsible management

Answer 39

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Question 40

Stakeholders

Answer 40

Any group or individual who has an interest in, or is affected by, the activities of a business