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Buisness man > Internal Environment > Flashcards

Internal Environment Flashcards

1
Q

Resources of Business- Natural +Factors to consider

A

Raw materials- Iron, wood., the land its self, farming , water and animals.
Factors to consider is the environmental impact and waste management

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2
Q

Resources of Business- Labour + Factors to consider

A

Employees, cooperate culture, connecting with employees and having training modules.
Factors to consider is the skills (How well does the employee implement into the business)

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3
Q

Resources of Business- Capital + Factors to consider

A

Machinary, factory or plant buildings.
Factors to consider is the quailty (needs to ensure high quality products so they can beat out competitors and increase demand)

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4
Q

Business Location- Shopping Centre

A

Mostly indoors, Range of businesses, air conditioned, easy parking

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5
Q

Business Location- Shopping strip

A

High visibility, Lack of parking

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6
Q

Business Location- Online Presence

A

Have to create an app or website, social media as a from of advertising, use of paypal

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7
Q

Business Location- Home Based Businesss

A

Traditionally sale of services but as a result of increased use of ICT, many home made businesses also sell goods

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8
Q

Factors affecting choice of Business Location

A

Visibillity, Cost, Proximity to customers and supplers, Proximity to competitors, Complementary businesses

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9
Q

Factors of Location- Visibility

A

A Business wanting high visibility would locate in a prime shopping area (Centre). Manufacturing businesses do not need high visibility to attract customers

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10
Q

Factors of Location- Cost

A

Leasing or purchasing a central location in a busy shopping centre will be far more expensive that a location with lower level of customer traffic

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11
Q

Factors of Location- Proximity to customers and suppliers

A

Depends on nature of business. Retail will need to be convienant for customers so Shopping centre of strip . proximity to customers in manufactoring is not a priority.

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12
Q

Factors of Location- Proximity to competitors

A

Would be unwise to establish a new business in a shopping centre that already has one or more businesses of that type. Being first to establish the business will be more likely for success

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13
Q

Factors of Location- Complementary buisness

A

Can exist in bringing customers to a new business. Offer goods or services aimed at the same customers eg Summer store and Pool

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14
Q

Sources of Finance (Define)

A

A Financial institution is an establishment that conducts financial transactions such as investments loans and deposits. Everything from deposting money to taking out loans must be done through financial instituions

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15
Q

Sources of Finance- Commerical Banks

A

They Accept deposits and provides security to their customers. With banks consumers no longer need to keep large amount of currency on hand. Banks can also make loans that businesses to buy goods or expand business operations

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16
Q

Sources of Finance- Insurance Companies

A

Pools risk by collecting preniums from a large group of people who want to protect themselves and/or their loved ones against a particular loss such as a fire, car accident, law suit or death

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17
Q

Sources of Finance- Unit investment Trusts

A

A company under an indenture or similar agree agreement. The management of the trust is supervised by a trustee. UIT trusts sell a fixed number of shares to unit holders who revceive a share of net income from underlying trust

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18
Q

Sources of Finance - Differences between Bank and Union

A

Credit unions offer more business loans than the banks and Credit union is based on a daily basis rather than a fixed rate in the commercial banks

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19
Q

Sources of Finance- Overdraft

A

An extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it.

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20
Q

Equity (Define)

A

Funds controlled by the owner of the business. these funds are used to start a business or expand one. Equitty does not have to be repaid unless an owner leaves the business.

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21
Q

External sources of Finance- Short term borrowing

A

Bank overdraft- Overdraw account to an agreed amount
Bank Bills- Short term securities issued by the business and bought by the bank
Trade credit- Suppliers change business at a later date

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22
Q

External sources of Finance- long term borrowing

A

Mortage- Loan secured by property of the borrowe

Leasing- Money paid to use buildings or equipment owned by someone else

23
Q

Equity - Advantages and disadvantages of using equity

A

Advantage
Equity does that have to be repaid unless the owner leaves buisness
Equity is cheaper than other sources of finance because there are no interest payment

Disadvantage
The owner may expect a good return on their investment but the small amount of finance may only generate low returns
May take a long time to organise new owners

24
Q

Equity - Adavantages and disadvantages of using debt

A

Advantages
Using Debt should result in increased earnings and profits
Australias tax system promotes debt financing for businesses.

Disadvantages
Regular repayments on the borrowing must be made
there is a higher risk for businesses using debt as the interest and government charges have to be paid on top of the principal amount borrowed.

25
Q

Factors affecting choice of finance

A

Business structure
Overall cost
Flexibility
Level of control

26
Q

External Sources of Finance - Grants

A

Financial grants for businesses are available from both the federal and state government

27
Q

External Sources of Finance- Differences between internal and external sources of finance

A

Internal sources of finance are funs that come from the owners themselves, while external sources of fiance are those that come from outside the business. internal is equity. external is debt or mortages.

28
Q

Purchasing an Established Business (Define)

A

when an established business is purchased, the business is already operating and everything associated with the business is included in the purchase

29
Q

Purchasing an Established Business- Benefits

A
  • Sales to existing customers generate instant income
  • A good business history increases the likelyhood of success
  • Stock has already been acquired,
  • Equipment is avalible for immiedate use
30
Q

Purchasing an Established Business- Costs

A

Exisiting image may be difficult to change especially if the business has a poor rep.

  • the success may of been due to the previous owners personality
  • Some employees may resent change
31
Q

Starting from scratch (Define)

A

The recognition of a gap in the market. Where it is clear that existing providers are not catering to the demand of particular products of services .

32
Q

Starting from scratch - Benefits

A
  • The owner has freedom to set up the business exactly as he or she wishes
  • The owner can determine the pace of growth and change
  • There is no good will for which the owner has to pay
33
Q

Starting from scratch- Costs

A

There is a high risk and a measure of uncertainty . it may be difficult to secure finance

  • Time is needed to develop a customer base and employ staff.
  • profits may not be generated if start up period is slow.
34
Q

Legal Business Structures

A

Sole trader, Partnership, Public Listed company, Private limited company

35
Q

Legal Business Structures- Pty Ltd

A

Private company. limited liability

36
Q

Legal Business Structures- Ltd

A

Public company. Limited liabillity

37
Q

Business Model (Define)

A

A plan that outlines how the business will run its operation to generate profits. it is how the business will generate its income and function on a day-day basis. Questions to consider are

  • What is the main goal of the business?
  • What type of good or service will the business offer?
  • Who is the target community?
38
Q

Business Model- Types

A 
Online Busines
Bricks and Mortar
Import
Export
Franchise
39
Q

Business Model- Online buisness

A

They exist solely on the internet, as well as having a small number of offices to support their online presence eg Facebook
ADVANTAGE
They are able to reach customers across the globe
DISADVANTAGE
They expose the customer to the risk of online theft

40
Q

Business Model- Bricks and Mortar

A

Offer face to face customer interaction as well as the security that comes with being able to physically inspect or test a good prior to purchase.
They are expensive to establish and to maintain thier online counterparts

41
Q

Business Model- Import

A

Goods and services that are produced over seas and sold to australian consumers. Import businesses need to factor the costs of purchasing international manufactor and taxes such as tariffs

42
Q

Business Model- export

A

Goods and services that are produced in australia to be sold overseas. Exporters need to ensure that they are aware of the legal requirements of the nation to which they are exporting

43
Q

Business Model- Franchise

A

Under a franchise agreement, a person buys the right to use the business name and distribute the products of an existing business. The business owner receives benefits of a succesful formula and well recongised name. The problem is that the franchisee has little room to make independant desicions due to franchises control

44
Q

Business Support Services (FORMAL) Legal and financial Advice

A

Evaluating the different legal structures is an important part of the planning stage but are unlikely to know all legal and financial ramifications
It would be wise to consult accountants, solicitors and bank managers
Accountants provide valuable info on all financial managment issues
Solicitors provide info concerning buisness structures, registration and contracts

45
Q

Business Support Services - Formal Networks/ Private

A

Buisness owners can access info and support from a large number of proffesional organisations

  • Chambers of commerce
  • Victorian Employers chamber of commerce
  • Trade associations
46
Q

Business Support Services - Formal Networks/ Gov

A

Fed- operates business.gov.ay as a service to businesses.
State- victoria website provides entry and links to info on starting a business
Local council- offer advice on landing zoning and consider development applications

47
Q

Business Support Services - Informal networks

A

Businesses can use their network or friends and colleagues
Menotoring
Small businesses will seek advice on a regular basis from a person who is expereinced or have knowledge in the feild

48
Q

Market research-

A

Involves collecting and analysing data and info to assist the business in its understanding of potential customers and competitors. Market research helps existing businesses as the business owner knows the needs and wants of customers and can be implemented as an advantage to destroy competitors

49
Q

SWOT

A

Strengths INTERNAL
Is our product popular?
Are consumers loyal?

Weaknesses INTERNAL
Do we have compentent managers and staff?
Have we experinced past failures

Oppurtunites EXTERNAL
what will new tech bring us? Are interest rates low?

Threats EXTERNAL
what trends have been evident in our market? Are there new competitors?

50
Q

Benefits of developing a Business plan

A

Helps test the visabillity of the business, Identifies the business’s strengths and weaknesses, indicates the owners abillity and level of commitment, and it assists the business to be proactive rather than reactive

51
Q

Business plans should Include

A

Executive summary
Operations plan
Financial plan
Marketing plan

52
Q

CSR in the internal Enviroment

A

A business acting in a socially responsible manner is far more likely to attract customers. A failure to do so can result in customers boycotting the business, turning it into a more socially responsible competitor

53
Q

CSR in the internal Enviroment - How to be SR in the internal enviroment.

A
  • Fair pay
  • Safe and healthy working conditions
  • Employing disadvantaged groups
  • Socially responsible groups
54
Q

Location- huminant

A

Industrial, online presecence. Needs to make customers be aware so include workshops

Buisness man (9 decks)

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