Exam For Business Flashcards
What is the importance and necessity of organisations
Team- together everyone achieves more
Important source of employment and career direction
Common characteristics of an organisation?
Two or more people
Formal or informal structure
Formal- clearly defined rules and regulations
Informal- loose work relationships
Revenue
Market share
What a business earns in the way of sales or fees
A percentage of total sales in a market held by on brand or business
Differences between businesses?
Size of assets, revenue
Nature of their operations
Who runs it- sole trader etc
What are the two types of oranisations?
For profit- focus is making money, assets and market share e.g Nike
Non for profit- offering a service or charity, e.g Red Cross
Objectives of organisations?
There are two objectives financial and social objectives!
Financial- profit, market share and growth
Social objectives- training, services to the community, environmental goods e.g body shop
Mission and visual statement are also objectives
Mission statement-
A global statement that reflects an organisation reason for being the way it will be managed!
What is the difference between micro and small business?
Micro- fewer than 5 employees, most work from home
Small business- independently owned, owners and managers are the main decisions makers, hires 20 people and 100 for manufacturing
How small business helps our economy?
95% of total businesses
Nurturing and developing entrepreneurs, be outsourced, hire new kids who spend money!
What are the characteristics and give examples of the three broad types of business activity!
Primary- farmer and taking out natural resources from the earth
Secondary- fishing cannery. Manufacturing products, makes the patties
Tertiary- Nike- selling goods and services at an agreed price
1/2
Quaternary- finance insurance property education
Quinary- hospitality, health personal
A business is within the private sector? What are the two sub titles
Unincorporated- sole trader and partnership
Incorporated- private companies, public
What are the two main types of legal structure?
Incorporated and unincorporated!
Incorporated is registered and has a seperate legal entity
Unincorporated- sole trader or partnership and will have private assets siezed
What is an organisation?
2 or more people who work together to achieve a set of goals and objectives
What is privatisation?
It is when a government operates business is sold to the private sector
Public sector- government run, health, education and defence
Private- owned by individuals
Distinguish between small medium and large business!
Size- small 5-20 medium 20-200 large 2000+
Legal structure- small sold trader partnership
Medium- partnership company
Large- company, cooperative
Ownership- small private
Medium- private and public
Large- private and public
What are the two levels of external environment?
The macro environment- consists of legal, environmental and economical factors which have an impact on a business to see whether they are financial, or paying their taxes!
The operating environment- consists of consumers competitors and lobby groups which have an impact on a business when the comp rise or lower prises or consumers don’t want to pay the prices
What is organisational stakeholder and stakeholder?
Employee or customer who is involved with an organisation which therefore has resposibilies towards the activities and interests
An individual or group that have a vested or direct interest with the activities of an organisation!
ACCC is responsible for promoting good business practices!
Ethics is a set of principles that an organisation need to follow!
Stakeholders interest and issues
Shareholder- receive dividends, socially responsible behaviour
Directors- ensure good ethics and social responsibility
Employees- to receive a fair wage, safe workplace
Customers- obtain high quality goods
Define KPI and how it relates to benchmarking?
KPI measures used to evuate the performance of a business in terms of efficiency and effectiveness! This relates to benchmarking as u can compare ur KPI to the industry standard
KPI- financial side?
Amount of assets, liabilities net profit and owners equity
Non financial KPI?
You have to measure staff satisfaction, environmental impact and levels of social responsibility!
Social responsibility- ethical responsibility where a government, organisation or individual has a duty to society; it’s about improving relations with stakeholders
Triple bottom lining- report on financial, social and environmental outcomes!
Form of ownership structure!
Sole trader- usually a unincorporated business that has unlimited liability,
Partnership- combines 2 or more people
Has a partnership agreement that gets them away from personal debt! But it will end if the person leaves
Company- incorporation- owners are shareholders 2 forms of company private and public
What is the difference between private and public listed company?
Private- restrict to 50 shareholders, pty ltd, family companies
Public- unlimited shareholders, ltd, on the stock exchange
Options for creating or buying a business?
Starting from scratch- best option
Adv- complete control, money is yours, no goodwill, own touches
Dis- more work, longer to establish, harder to start and make money
Buying an existing business-
Adv- simpler process, existing suppliers and contacts,
Dis- buying someone else’s failure, overpriced
Buying a franchise- paying for the right to use another business
Adv- low risk or fail, tested and succeeds, assistance
Dis- cannot make it ur own, a lot of pavements
Who does a business register with?
Must be registered on ASIC
How does zoning by laws affect a business!
A business can only build in a retail zone,
Others they are NOT allowed to are light industrial, heavy industrial, commercial and residential only!
Social responsibility?
Ethical responsibility where by an individual, organisations or group has a duty to society at large; about keeping key relations with stakeholders
Define ethics!
A set of moral principles that an organisation needs to follow
Why would you have a business plan?
To optimise chances of success, it states what objectives u have and how you will achieve them!
Components of a business plan?
Cover Executive summary Mission statement Business profile Products Marketing plan Operational plan Financial plan
What is in the executive summary!
Should highlight the objectives and how you will get there, the product you are selling, who your target market it etc
What is in a marketing plan?
What market you are in Who is your competition Who your target market is Swot analysis How the business will advertise
Mission statement
A statement that reflects a business reason for being the way it will be managed
What market they are targeting
A reference to the type of targets
Important values of a business
What are some different types of intellectual property?
Patent- makes the selling of device substance or Method yours
Trademark- numbers letters logo shape
Design- features and the way it looks
Copy right- art, songs and literature
Define innovation?
Define intellectual property?
Introduction of new process and methods
The property of mind or intellect, can be an inventions, rademark or original design!
How to come up with a good idea?
Family and friends
Personal inspiration
Research
Looking overseas
Factors to consider when selecting a location!
Personal factors- proximity if you love it etc Area profile- industry market Demographics- population the incomes Complementary business- Zoning regulations Accessibility- easy access
Why people want to start a small business?
To be independent
To become wealthy
Fill a gap in the market
Skills needed for business success!
Communications skills Orgainisational skills Marketing skills Promoting skills Financial skills Negotiation skills Technical skills
Qualities needed for business success!
Innovative Take risks Think outside the square Creative Confidence
What are two ways a business can fail?
Insolvency: business closes itself down due to it not being able to meet its financial commitments
Bankruptcy:when a business closes its doors as it cannot pay its debt!
Why do businesses fail?
A lack of manager experience
Must be able to evaluate the financial performance and performance of the business!
What are the three types of planning?
Strategical- 2-5 years
Operational- day to day, weekly and monthly adds up to a year
Tactic-1-2 years
