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Commerce > Running a Business (Yr 10 Mid-year) > Flashcards

Running a Business (Yr 10 Mid-year) Flashcards

1
Q

Name some reasons for being self-employed.

A
  • Independence
  • More control over your life
  • Choose when and where you work
  • Choose whom you work with
  • To work at home
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2
Q

Advantages of being self-employed.

A
  • Independence
  • Possibility of making a profit
  • Challenges, reward and satisfaction
  • Increase personal wealth
  • Contribute to society
  • Develop own creative ideas
  • Overcome unemployment
  • Achieve a better lifestyle
  • Possible tax advantages
  • Employ family members
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3
Q

Required skills and characteristics needed to be an entrepreneur.

A
  • Resilience
  • Focus
  • Self-reliance
  • Open mind
  • Competetive
  • Confidence
  • Determination
  • Passion
  • Self-motivated
  • Good communicator
  • Sets goals
  • Takes advice
  • Willing to learn
  • Deals with failure
  • Leadership qualities
  • Desire to succeed
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4
Q

Disavdantages of being self-employed.

A
  • Hard work and long hours
  • Other ‘bosses’ — customers, suppliers, financiers.
  • Income may fluctuate and be uncertain
  • Risks of failiure
  • Stress and worry
  • High levels of responsibility
  • Difficulty selling the business
  • Constantly facing problems
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5
Q

What is a business opportunity?

A

Something an entrepreneur can see as an avenue to success.

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6
Q

Business opportunities: Market research

A

Market research is required to investigate certain aspects of the business, such as location, competition and demographics.

  • Who are the customers?
  • Do they need our product?
  • Who are the competitors?
  • What are they like?
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7
Q

Business opportunities: Location

A
  • A good location can make the difference between success and failiure.
  • It is an asset and will lead to high levels of sales and profits.
    • Where is the business located?
    • Is the product reliable?
    • Is the product easy to access?
    • Where is the market located?
      • Rural
      • Urban
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8
Q

Business opportunities: Demographics

A

Demographics provides details of the size of a particular population and its characteristics.

  • What is the majority of ethnic groups?
  • What is the largest age group?
  • Family size and income?
  • Majority of occupations?
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9
Q

Business opportunities: Competition

A

Businesses need to know who they are competing against in the market place and whether there will be enough room for them.

  • Is the product unique?
  • What is the price range/quality?
  • What is the setup and appearance?
  • Who are the competitors?
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10
Q

Business opportunities: Target markets

A
  • Target market refers to the group of customers to which the business intends to sell its products.
  • Once the target market has been identified, the business concentrates its marketing activities on that group.
    • Is the product in demand?
    • How much are consumers willing to pay?
    • Who is the target market?
    • Where will you find your target market?
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11
Q

What is a sole trader?

A
  • A business owned and operated by one person.
  • The most common type of business in Australia.
  • The cheapest and simplest structure to set up.
  • Unlimited liability
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12
Q

What is a partnership?

A
  • A business owned and operated by 2–20 people
  • Unlimited liability
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13
Q

What is a private company?

A
  • Pty. Ltd (Proprietary Limited)
  • Often family owned
  • Shares are only offered to the people who the business wants as part-owners. (not given out freely)
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14
Q

What is an incorporated association?

A
  • Can have an unlimited amount of shareholders.
  • The general public may but and sell shares.
  • Limited liability
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15
Q

What is equity finance?

A
  • money received from the sale of shares of ownership in the business.
  • you use your own money.
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16
Q

What is debt finance?

A
  • money obtained through loans from:
    • banks
    • finance companies
    • trade suppliers
  • you use other people’s money.
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17
Q

Name the advantages of starting a new business.

A
  • shape reputation
  • don’t have to pay for goodwill
  • invest small amounts
  • determine the pace of growth and change.
  • the owner has more flexibility to select the
    • location
    • target market
    • range of products
    • level of customer service
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18
Q

Name the disadvantages of starting a new business.

A
  • There is a high risk and a measure of uncertainty.
  • Difficult to attract customers.
  • It may prove difficult to secure finance.
  • Time is needed to:
    • develop a customer base
    • employ staff
    • develop lines of credit from suppliers.
  • If the start-up period is slow, then profits may not be generated for some time.
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19
Q

Name the advantages of purchasing an existing business.

A
  • Sales to existing customers will generate instant income.
  • A good business history increases the likelihood of business success.
  • Stock has already been acquired and is ready for sale.
  • Equipment is available for immediate use.
  • Existing employees can provide valuable assistance.
20
Q

Name the disadvantages of purchasing an existing business:

A
  • The existing image of the business may be difficult to change,
    • especially if the business had a poor reputation.
  • The success of the business may have been due to the previous owner’s personality and contacts and this may be lost when the business is sold.
  • Some employees may not agree to any change to the business operation.
21
Q

What are some regulations enforced by the local government that impact businesses?

A
  • determining land zoning (use) and approving new development applications
  • fire regulations, especially fire prevention facilities parking regulations governing the number of spaces that need to be provided
  • health regulations, especially the safe handling of food
  • the size, shape and location of business signs.
22
Q

What are some regulations enforced by the state government that impact businesses?

A
  • registration of the business name unless the business carries the name of the owner
  • provision of employee entitlements such as:
    • workers’ compensation
    • occupational health and safety
    • award rates of pay and conditions
  • not engaging in misleading or deceptive advertising
  • abiding by any pollution controls
  • observing regulations relating to the sale of food, cigarettes and alcohol
  • adequate and non-deceptive labelling of all foods and clothing.
23
Q

What are some regulations enforced by the federal government that impact businesses?

A
  • payment of Pay As You Go (PAYG) income tax and fringe benefit tax
  • deduction of income tax from employees who earn above the minimum taxable wage level
  • possible collection of Goods and Services tax (GST) on behalf of the Australian Taxation
  • Office provisions for employee superannuation
  • abiding by unfair dismissal laws when dismissing employees
  • not engaging in anti-competitive practices.
24
Q

Name marketing strategies for businesses.

A

Networking: Tell people about your business and what you do for a living.

Creating a website: The website can be used for product displays, e-tailing and blogging.

Advertising: Use print or electronic media to communicate messages about your products.

Social media: Create a business page on different social media platforms.

Testimonials: Existing customers tell others about their positive experiences with your business.

Publicity: Write articles and give seminars on topics related to your business.

25
Q

What is a competetive advantage?

A

The ability of a business to develop strategies that ensure it has an ‘edge’ over its competitors.

26
Q

What are demographic factors?

A

Population characteristics that affect customer spending, which include:

  • age
  • ethnicity
  • gender marital status
  • family size
  • income
27
Q

What is an entrepreneur?

A

Someone who starts, operates and assumes the risk of a business venture in the hope of making a profit.

28
Q

What are expenses?

A

The costs incurred in running a business.

29
Q

What is a franchise?

A

The rights from a manufacturer to distribute its products under its name.

30
Q

Define assets:

A

items of value owned by a business

31
Q

Define goodwill:

A

The monetary value of a business’s reputation.

32
Q

What is a gross profit/loss?

A

The amount remaining when the cost of goods sold is deducted from revenue.

33
Q

What is an incorporation?

A

When the company has become a separate legal entity from its owners (shareholders).

34
Q

What are liabilities?

A

The debts owned by a business to others.

35
Q

What is meant by unlimited liability?

A
  • A business owner is personally responsible for all the debts of their business.
  • Can be forced to sell personal assets such as a house or car to pay for business debts.
36
Q

What is limited liability?

A

If the business cannot pay its debts, a shareholder generally loses only the money they invested in the business.

37
Q

Define liquidity:

A

The ability of a business to pay its debts in time.

38
Q

What is management?

A

The coordination of the human, physical, financial and information resources to achieve the goals of the business.

39
Q

What is net profit/loss?

A

The amount remaining when operating expenses are deducted from gross profit.

40
Q

What is a niche market?

A

A very small segment of the total market.

41
Q

What is owner’s equity?

A

The value of the business to the owner.

42
Q

What is promotion?

A

Methods used by a business to inform, persuade and remind customers about its products.

43
Q

What is revenue?

A

The income earned by a business.

44
Q

What is risk management?

A

The process of identifying and minimising the risks faced by a business.

45
Q

What is a target market?

A

A group of customers whom the business intends to sell its products.

Commerce (3 decks)

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