Establishing A Business Flashcards
What are the advantages of becoming a franchisee?
- pre-existing reputation
- don’t have to start from scratch
- less start up capital
- owners receive specialised training
- advertising costs are shared
- bulk buying can reduce costs
What are the disadvantages of being part of a franchise?
- have to pay for use of the brand
- strict requirements
- can’t create own ideas
- difficult to expand
What are some examples of franchises?
McDonald’s, IGA, Boost, City Beach, Bakers Delight
Why is the location important?
- proximity to customers, suppliers
- rent costs
- size of property
- home business? Distractions?
What needs to be done in terms of staffing?
- job descriptions (roles, characteristics, wages)
- recruitment
- interviewing and hiring
What does admin need to do?
- wages
- superannuation
- taxes
- sick and annual leave
What facilities are needed?
- bathrooms
- drinking water
- need to be aware and compliant of all laws
What equipment is required?
- utilities (electricity, phone, wifi)
- light fittings, painting
- floor coverings
- stationery
What is a product/ tradename franchise?
Business firm gives exclusive rights to sell its products in exchange for fees or royalties.
What is a business format franchise?
Franchisor provides a format or a complete system for operating the business. This includes planning, management, location, appearance and image and quality of goods.
What are some local regulations for business operations?
- land zoning
- on site parking requirements
- council may want to approve business signs
- business activity is not allowed if it affects the quality of the residential neighbourhood.
What effects might businesses have on the residential neighbourhood? (Local regulations)
- appearance of building
- works or materials used
- hours of operation
- electrical interference
- storage of dangerous goods
What laws determine state regulations on businesses?
- workers compensation act
- occupation health and safety act
What is SIRA?
State Insurance Regulatory Authority
- now in charge for workers compensation, SafeWork and icare (insurance and care nsw)
What are the state regulations (NSW)?
- office of fair trading stuff
- OH & S laws
What is OH & S?
All employers must provide a safe working environment
What do risk management processes include (OH & S)?
- identifying hazards
- assessing risks
- eliminating or controlling risks
- reviewing risk assessments
What are the federal regulations out on businesses?
- ABN/ ACN
- Tax File Number (TFN)
- GST
- registration with ASIC
- discrimination rules
What is an Australian Company Name?
- nine digit number that every company must have
- ensures identification of companies
Where should the ACN appear?
- all of the company’s public documents and eligible negotiable instruments
What is an Australian Business Number?
- eleven digit number
- identifies business to government and community
- free
- introduced in 2000 to enable businesses to deal with things using one number
What taxes might a business be subject to?
- income tax
- Gst
- fringe benefits tax
- sales tax
- customs and excise duty
What is a Business Activity Statement used for??
- reporting and paying GST
- pay as you go (PAYG) installments
- other tax obligations
Who is required to lodge a BAS to the ATO?
All businesses registered for GST are required to lodge a BAS by the due date.
What will businesses registered for GST do??
- include GST in their prices
- claim credits for the GST included in the price of GST they buy for their business
What are examples of when you can get a GST free sale?
- GST export of goods
- service used outside Australia
- sale of a business is a going concern
- selling a business
*see business book
What is Fringe Benefits Tax?
Where employers pay on certain benefits they provide to their employees.
Benefit may be in addition to or as part of their salary/wage.
When does the FBT year go from?
The FBT year runs from 1st April to the 31st March.
What are examples of Fringe Benefits Tax?
- car
- car parking
- entertainment
- loans
What is Customs and Excise Duty?
A commodity based tax on alcohol, tobacco and fuel and petroleum products.
What are the federal employment laws?
- workplace relations act
- anti discrimination legislation
- superannuation legislation
- OH & S legislation
How do you register for a company??
The company must complete form 201 and send it to ASIC.
Who are the board of directors and who elect them?
A director is a person in charge of managing the company’s business activities. They are elected by the shareholders.
How are directors different from management?
Directors make decisions, management carry out the decisions.
What is the alternative document you can complete to form a company?
Form 401, which is an application for registration as a registrable Australian body.
What is the role of WorkCover?
To assist in securing the health, safety and welfare of workers in NSW.
What does WorkCover do?
- provides information to the public about their rights in the workplace
- provides services for workers to use (insurance etc)
- informs about workplace behaviour (coded of practice)
What is the role of the Office of Fair Trading?
- make doing business in NSW “simple, accessible and fair”
- promotes a fair marketplace for consumers and traders
- regulates business operations
- protects consumers from businesses behaving unjustly
What is a prospectus?
A formal written document published by every firm offering its securities to public for purchase.
When is a prospectus issued? Does it have to be checked?
Issued when securities are offered for sale. Must be lodged with ASIC before its issue.
What are the four P’s of marketing?
- product
- price
- promotion
- place
