Role of a business Flashcards
What percentage of businesses in Australia is made up by SMEs?
98%
What is the common feature shared by all businesses?
They all produce a product tat is sold in a market where buyers and sellers meet
How many active trading businesses are in the Australian business world?
2.14 million
What are the main activities undertaken by a business? (8)
- management
- production
- marketing products
- controlling production
- forecasting sales, expenses, profits
- planning finances, production and business needs
- distributing goods and services
- organising natural, capital and human resources
What characterises a business earning a profit?
Sales revenue is greater than operating costs
What is the main activity of a business?
sell products to customers
What is the relationship between business activity and the economy?
- business activity leads to higher levels of economic growth and wealth
- the more that is produced, the more wealth is generated
To whom, and in what ways, is wealth distributed?
- government - tax
- shareholders- dividend
- the business itself- depreciation, retained profits
- lenders- loan repayments
- employees- salaries, wages etc.
What are the two main risks in becoming an entrepreneur?
- lose all or part of the money put into it
- not being paid
Examples of entrepreneurial qualities?
courage, motivation, determination, energy etc.
What is the relationship between small businesses and innovation?
the level on innovation among SME employees is much higher than among employees of larger businesses
To whom does a business provide income?
owners/shareholders, employees
What is often divided among shareholders of a company?
A share of the company’s profit (dividend)
What percentage of private sector jobs do SMEs provide?
about 70%
- 8 million people
What is the relationship between the number of employees and the number of sales/customers?
the more that is sold, the more a business will employ
In what circumstances does freedom of choice exist?
when consumers can ‘shop around’ and select from a range of competitors’ products
What must entrepreneurs do to ensure that their business is a success?
regularly upgrade and adapt business objectives and recognise opportunities to expand or diversify business operations
What is quality of life?
the overall wellbeing of an individual, and is a combination of both material and non-material benefits
What is the relationship between business activity and a consumers quality of life?
§ Businesses have a responsibility to help provide what consumers want and to minimise what they don’t want
