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business management units 1 & 2 > semester 1 exam > Flashcards

semester 1 exam Flashcards

study areas 1, 2, and 3

1
Q

what is an entrepreneur?
what are there characteristics?

A

a risk taker who creates and operates a new business usually in response to opportunities, a gap in the market etc.
prepared to take risks, demonstrate initiative, and have a shared vision (everyone in the business works together to develop and accomplish a goal).

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2
Q

what are 5 reasons of motivation behind starting a business?

A
  • financial independence
  • personal independence
  • Making a profit
  • fulfill a market need
  • fulfill a social need
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3
Q

what is a business manager? what are there characteristics?

A

run a business on a day-to-day basis to make profit.
they prefer to minimize risks and make calculated decisions where the outcome is pretty clear.

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4
Q

what is a business opportunity?

A

a wide range of possibilities that a person can perceive as an opportunity and may create a business out of it. may find a business opportunity through innovation, R&D, technological development etc.

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5
Q

what are 6 examples of where business opportunities can arise?

A
  • innovation
  • market opportunities
  • changing customer needs
  • research and development (R&D)
  • technological development
  • global markets
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6
Q

what are business goals? and why are setting goals important?

A

business goals set an expected level of accomplishment in a certain period of time, giving businesses a clear purpose and something to aspire towards aswell as provides a business with direction.

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7
Q

in terms of goal setting what is S.M.A.R.T

A

S pecific, must be clear (500 customer sales by the end of the month)
M easurable, must be quantifiable/contain numbers (so you work out whether you’re on track)
A ttainabe, challenging but not unrealistic (something you know you can achieve if you try your best)
R elevant, must be worthwhile, something that will benefit your business (should be based in current conditions in the market and weak aspects of the business)
T ime bound, must have a deadline or time limit.

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8
Q

what are the different types of goals to be set??

A

financial goals
social goals
personal goals

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9
Q

what are some examples of financial goals?

A

making a profit, increasing sales, increase market share, expand the business, improving the way a business operates.

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10
Q

what are some examples of social goals??

A

community service (sponsorship), employment, social justice (improvement of equality/fair treatment), ecological sustainability (improving protecting of the environment)

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11
Q

what are some examples of personal goals?

A

business owners may have personal goals set for the business such as:
higher income, improved financial security.

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12
Q

what is concept development?

A

the development of a business concept in response to an opportunity, when it begins the turn into an actual business.

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13
Q

what is IP?
and list 5 ways to protect IP

A

intellectual property,
any creation of the mind such as new invention, a brand, a design.
- trademark
- patent
- copyright
- design rights
- domain name

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14
Q

what is a trade mark??

A

a right granted over a letter, word, phrase, number, sound, smell, shape or logo that a business uses to represent their products. trademark gives owner exclusive rights to use it for commercial purposes etc.

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15
Q

what is a patent?

A

right granted for any device substance, method or process that is new, inventive and useful.

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16
Q

what is copyright?

A

this is free and automatic protection over any original work, such as writing, music, art, films, sound recording, broadcasts, and computer programs..

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17
Q

what are design rights?

A

rights given to an owner to commercially use, license or sell a design. a design could be for a logo, branding, packaging, new invention or new technology.

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18
Q

what is a domain name?

A

owner can register a domain name (businesses unique address on the internet) so that no one else can register it.

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19
Q

in terms of reasons to start a new business what is financial independence?

A

means they will not have to rely on income from an employer or being dependent on other people to pay for living expenses.

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20
Q

in terms of reasons to start a new business what is personal independence?

A

means they simply want to have control over their own destiny, ‘being my own boss’ is something that inspires them.

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21
Q

in terms of reasons to start a new business does making profit mean?

A

means someone believes that they can earn much more money working for themselves rather than working for someone else.

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22
Q

in terms of reasons to start a new business what does to fulfill a market need mean?

A

means the recognition of a market need, finding a gap in the market may motivate someone to create a business out of it.

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23
Q

in terms of reasons to start a new business what does to fulfill a social need mean?

A

means creating a business/selling goods and services for the purpose of making the world a better place.
ex. providing Oppurtunites for unemployed people, focusing on an environmental need.

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24
Q

in-terms of business opportunities what does innovation mean?

A

changing of improving an existing product or service.

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25
Q

in-terms of business opportunities what does changing customer needs mean?

A

as markets are changing so are customer needs, business owner my cease an opportunity from any of these identified customer needs such as, online delivery, websites, changing dietry requirments.

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26
Q

in-terms of business opportunities what does research and development (R&D) mean?

A

business owners undertake R&D to expand their knowledge of products. this can lead to many opportunities. ex: making a new product in response to competitors/ innovation of a product to become superior to competitors

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27
Q

in-terms of business opportunities what does technological development mean?

A

using technology can change the way you operate as a business for the better, become a lot more organized and productive.

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28
Q

in-terms of business opportunities what does global market mean?

A

selling products and/or services across the world. creates large business opportunities as it increases recognition, customers, etc.

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29
Q

in-terms of business opportunities what does market opportunities mean?

A

markets are forever changing; a business owner may identify an opportunity from these changes and turn it into a potential business idea.

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30
Q

what is market research??

A

market research is a process involving gathering and analyzing information concerning a specific market. can help find out if a gap in the market exists etc.

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31
Q

what is a feasibility study?

A

an assessment testing the business ideas potential for success.
is there already an existing product or service like this?
does it fit customer and market needs?

32
Q

what does GDP stand for?
what is GDP?
what can it be used for?

A

1) gross domestic product
2) the value of all goods and services sold
3) to determine economic growth

33
Q

what is economic growth?

A

an increase in the real value of goods and services over a set period of time

34
Q

what does CSR stand for?
what is CSR?

A
  • corporate social responsibility

CSR refers to what businesses do outside of making profit to better the environment and society
Such as, donating a percentage profit to charity, using eco friendly products etc.

35
Q

how are governments involved in R&D? and why?

A

federal and state governments support businesses to conduct R&D via direct funding, grants, and tax incentives. the reason the government hands out money for R&D is because it drives innovation, increases investment in the local area and boosts economic growth.

36
Q

define the term research and development?

A

money given to a business via a government through direct funding , grants or tax incentives to carry out extensive research on increasing knowledge on your specific market and the innovation of new products.

37
Q

define goal?

A

what a business expects to achieve over a set period of time

38
Q

what does GST stand for?
what is it?

A
  • goods and services tax
  • Australian businesses collect goods and services tax from consumers to then give to the government.
39
Q

what is the difference between social and economic impacts?
provide examples of both.

A

economic impacts revolve around financial aspects and economic growth while social impacts focus on well-being, equality and quality of live.

Ei: a policy aimed at reducing poverty can have social impacts such as improving living standards and equality and can also have economic impacts by increasing consumer spending and promoting stability in the economy.

40
Q

what is the internal/micro environment?
give some examples of things that fit under the internal environment.

A

factors that the business has some control over such as employee’s, management style, culture and company policies, location etc.

41
Q

what is external environment?
give some examples of things that fit under the external environment.

A

The external environment splits into to categories, macro and operating and are the factors that the business has no control over and instead acts as a pressure or force on the business’s operation.
such as legal, political, economic, technological, global and corporate social responsibility factors.

42
Q

what to subtopics can external environment be split into?

A
  • macro and operating environment (changes in these environments can affect all businesses).
43
Q

what is the macro environment?

A

the macro environment is a part of the external environment and is the broad forces, condition and trends within the economy and society the business operates in.
such as legal and government regulations, economic conditions, global and corporate social reasonability considerations.

44
Q

what is the operating environment?

A

the operating environment is a part of the external environment and is the stakeholders that have a direct impact on how the business operates.
stakeholders such as customers, competitors, suppliers, special interest groups.

45
Q

what are the different legal business structures?

A
  • partnership
  • sole trader
  • company
46
Q

what are incorporated and unincorporated businesses?

A

an incorporated business is known as a company as it is a classified as a separate entity from the owners as they are now known as shareholders, meaning they have limited liability - personal assets cannot be used as repayment if the business is in debt only loose the amount of money put into shares.
an unincorporated business is considered the same entity to its owners making them a sole proprietor (1 person) or a partnership (2 people) meaning any personal assets can be taken in order to repay any debts on the business.

47
Q

what are business models?
what are 5 examples of this?

A

the way in which a business will run its operations to generate profit.
examples: franchise, online presence, bricks and mortar, direct to consumer, import and export.

48
Q

what is franchise business model?

A

franchise is an agreement that a person buys the rights to use the business name and distribute goods and services of an existing business. franchsor = original owner. franchisee = business that brought the rights.

49
Q

what are bricks and mortar business model?

A

term that refers to a business to have a physical location.

50
Q

what is direct to consumer business model?

A

a business that sells directly to public. can be online or in person.

51
Q

what are import and export business models?

A

imports are goods and services that are produced from overseas and sold to Australian customers.
exports are goods and services produced in Australia and sold overseas.

52
Q

what is goodwill?

A

the monetary value attached to the reputation of a business.

53
Q

what are the 3 categories of resource needs?
give examples of each

A

natural - come from natural environment - land, water and raw materials.
capital - people that provide their skills, efforts and knowledge to the business.
labor - the tools and machinery used to perform services.

54
Q

what are some business locations?

A

retail strip, shopping center, online presence, home based..

55
Q

what factors affect where you locate your business?
explain them.

A

personal factors - does the owner like the location?
visibility - is it visible to passing traffic and people walking past. does it have to potential for impulse buying?
site cost - leasing or buying a place for your business. shopping centers are more expensive.
proximity to customers and suppliers - locate close to customers and suppliers for convenience. locate in customers regular shopping areas.
proximity to competitors - unwise to establish a business in the same shopping center as other businesses that sell the same goods and services.
complement businesses - locate a chemist near a doctor’s office or a cafe near a group of work offices.

55
Q

what is equity/internal finance??
where can you source these funds?

A

funded from inside the business, if company is it known as shareholders equity as it is incorporated. internal finance can be funded from self-funding, family and friends, private investors, shares, crowdfunding (raising finance by using online and social media networks, GoFundMe etc.)

56
Q

what is external/debt finance?
list the types of external finance.

A

finance funded from outside the business. includes debt finances (repaid) and grants (given)
finances such as
short term borrowing:
bank overdraft
bank bills
trade credit
long term borrowing:
loans
mortgage
leasing
don’t need to be paid back:
grants

56
Q

what is bank overdraft?
is it short or long term?
dis and adv of bank overdraft

A
  • bank allows business to overdraw owners account to an agreed limit.
  • they are a short-term finance.
  • repayable on demand.
  • only pay when used, flexible.
57
Q

what are bank bills?
is it short or long term?
dis and adv of bank bills?

A

they are short term loans usually over 100,000 and played back in 90 - 180 days.

  • high interest rates
  • allows access for a large amount of money instantly.
58
Q

what is trade credit?
is it short or long term?
dis and adv of trade credit?

A
  • can purchase goods and raw materials from suppliers and pay at a later date.
  • short term
  • may not be accessible especially for new businesses.
  • no interest, helps with cash flow.
59
Q

what is mortgage?
is it short or long term?
dis and adv of mortgage?

A

a loan secured by a property.

long term

may not be accessible especially for new businesses because they don’t have a financial record.

  • negotiate on interest rates (can shop around and find the bank with the best interest rates)
60
Q

what is leasing?
is it short or long term?
dis and adv of leasing?

A
  • paying money to borrow equipment/machinery that is owned by another party. allows a business to borrow assets without having to pay full price and owning it. at the end of the leasing month an option to purchase asset is available
  • long term
  • higher interest than other forms of finance, don’t own the product
  • tax deductible
61
Q

what are the 5-factors affecting the choice of finance?

A

terms of finance - needs to suit the purpose of funds. is the length of your finance right. (long or short term)

business structure - larger businesses can gain access to more loans and greater sums of money as they have a better financial record then smaller businesses.

overall cost - can the business afford the type of finance in-terms of interest, time allowed for and the amount of repaid money?

flexibility - does the loan provide flexibility? can you leave the agreement at a small cost?

level of control - are there other opinions form other shareholders or partnerships in the business.

62
Q

where can you seek legal and financial advice?
define these.

A

solicitor - solicitors provide information concerning the structure of a business, registrations, contracts, leases, partnership agreements, patents and legislations. they can advise business owners how to best deal with changes in company laws.

accountants - provide valuable advice on financial management issues and taxation obligations.

bank managers - provide advice for financial services, sources of finance, and basic business management.

also, from federal, state, and local governments.

63
Q

what is SWOT analysis? what is it used for?

what does it stand for?

A

a planning tool that identifies the businesses internal strengths and weaknesses, Aswell as identifying any opportunities or threats from the external environment.

Strengths - what is the business good at?
Weaknesses - what does the business need to improve on?
Oppurtunites - what are our possible new markets? are interest rates low?
Threats - what trends have been evident in our market? are there new competitors? are there any new laws?

64
Q

what is a business plan?

A

the written statement of the goals and objectives for a business, and the steps in which will take to achieve them.

65
Q

what are federal government obligations?

A

businesses must earn above the minimum taxable income level, providing employee superannuation, observant of customer regulations, and abiding by relevant legislations that effect the business operations.

66
Q

what are state government obligations?

A

abiding by WHS requirements, payments of payroll taxes, abiding by relevant state legislations, abiding by pollution controls.

67
Q

what are local government obligations?

A

approving new development and alteration (to an existing building)
applications, fire regulations, parking regulations, size, location and shape of business signs.

68
Q

what taxation laws are there?
Explain them.

A

business activity statement (BAS) - businesses in Australia use this to efficiently report and pay certain taxes to the Australian taxation office (ATO) including.
goods and services tax (GST)
- pay-as-you-go (PAYG) - When you pay your employees, you must withhold a certain amount of tax from their pay. You then send this tax to ATO. The ATO calls this pay as you go (PAYG) withholding.
- Aswell as payroll tax. - tax paid by employers calculated in the total wages paid each month (not every business has to pay this - depends on how high the businesses monthly wages are)

69
Q

what are some business structures?

A

partnership
sole trader
private company and public company
social enterprise.

70
Q

what is social enterprise?

A

a type of business structure that has a specific social objective as its primary purpose.

71
Q

how can you tell between a sole proprietor, parentship, private company or public company by their name?

A

sole proprietor could have a single person’s name in the business name indicating it is Singley owned.

partnership could have two peoples name in the businesses name indicating it is run by 2 people.

private company will have the sign PTLD (privately limited) next to its name

publicly owned company will often use Inc meaning incorporated or Ltd meaning limited.

72
Q

what is a supply chain?

A

A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer.
a simple supply chain may consist of
supplier - the entity the supply’s the raw materials
manufacturer - the company that turns raw products into finished products
distributor - the company responsible from transporting finished product from manufacturer to retailer
retailer - the company that sells finished products to end customers.

73
Q

what is a union?

A

A union is an organization formed by workers in a particular industry or trade, created to protect and promote the interests of its members. Unions negotiate with employers on behalf of their members regarding issues such as wages, working conditions, benefits, and workplace policies.

74
Q

What does ACCC stand for?

A

Australian competition and consumer commition

business management units 1 & 2 (3 decks)

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