Topic 3 : influences in establishing a small to medium enterprise Flashcards
Business prelim
list personal qualities that affect how you establish an SME
qualifications skills motivation entrepreneurship cultural background Gender
what do qualifications have anything to do with bussiness
you do not need to go to school to become an entrepreneur. Entrepreneurs should go to business courses to learn the importance of planning and generating business ideas
what does skill have anything to do with business
owners must have technical skill to transform a business opportunity into a real business
what does motivation have to do with bussiness
having a reason for running there business allows the owner to have a vision for their businesses future
what does entrepreneurship have to do with bussiness
it means you are able to establish and run a successful business and will take calculated risks to turn an idea into a successful business operation
what does cultural background have to with bussiness
heritage can enhance your business
what does gender have to do with bussiness
expectation and standards set both genders are equal
What does information allow entrepreneurs to do
make better plans and gain advantage over competitors
list sources of information that businesses can use
Australian bureau of statistics
internet sites operated by industry groups
trade shows/conferences
how do entrepreneurs find new business opportunities
they research the market for signs of gaps that they can fill
list some examples of opportunities
things deliberately looked over by big companies
new product and services
political changes
list the steps of the business idea generation
- business idea/s formulated
- first assessment of idea/s
- Research undertaken
- idea evaluated
- identify problems
- identify solutions
- understand risk involved
- make decision on idea
- start bussiness
list types the levels of competition(3)
monopoly
duopoly
oligopoly
what is a monoploy
a market dominated by 1 business (95%+)
what is a duopoly
a market dominated by 2 businesses
what is a oligopoly
a market controlled by a few very large businesss
list the establishment options (3)
new business
existing business
franchise
list 3 advantages of creating a new business
full creative control
gets to make all decisions
don’t need to pay goodwill
list 3 disadvantages of creating new business
high risk of failure
long time until you break even
needs to build customer base
list 3 advantages for buying a existing business
established customer base
‘turn key’ business- immediate start
established suppliers and staff
list 3 disadvantages for buying a existing business
existing problems (not immediately noticed)
pay goodwill-expensive
post success may be due to previous owner
list 3 advantages for buying a franchise
established customer base
take advantage of company promotions
suppliers and materials supplied
list 3 disadvantages of buying a franchise
no creative control
pay for goodwill-expensive
franchiser has contract production and doesn’t need to renew the contract, if you aren’t doing well or are going against the ideals of the company
what must you research when you are creating your idea (4)
your target market
demand for your product
similar products from competitors
cost of providing the product
how should you price your product
through using pricing methods and strategies
list some things do you need to consider when looking for a location(3)
buy or rent
proximity to competitors
foot traffic
what is finance
is the money that a person will need to fund the operations of the business
list some sources of finance through equity(4)
owners capital
retained profits
invite partners
sell shares
list some examples of short term debt(3)
credit card
overdraft
factoring
list some examples of long term debt(3)
mortgage
leasing
debenture
what is overdraft
permission to withdraw more than what is in you account
what is factoring
selling accounts receivable to finance companies for a reduced price
what is a debenture
an amount borrowed from a company that is paid back + interest over 1-10 years.
what is secured debt
the borrower puts an asset as security for a the loan. meaning the lender may reposes it if the loan is not repayed.
what legal influences, influence your besiness
Business name
zoning
health regulations
consumer law
what laws are there about business names (2)
you must register business name with the ASIC,
Must have a Australian Business Number (ABN) which must appear on all invoices and communication
what laws are there about zoning(2)
local councils can restrict where some businesses are located
council plans and allocates residential, commercial, industrial zones
What laws are there about health regulations(2)
business must have all required licenses
food and hospitality businesses must meet all health and safety requirements
what laws are there about consumer law
Australian consumer law: protects consumers from misleading business practice
businesses must honour warranties, price of goods, appropriately and no false claims
what must businesses do when planning for Human resources
the owner must undertake a job analysis
what is a job analysis
it sets out the key duties and responsibilities of each position
what costs are needed to supply employees (2)
wage costs
non-wage costs
what are wage costs
refer to the wage or salary that is paid to an employee
what is a non wage cost
additional cost that aren’t wages eg uniform,insurance,superanuation
List types of taxes that will need to be paid in your bussiness
federal tax
state tax
local fees and charges
what is federal tax
a tax on profits
what type of federal tax do unincorporated businesses pay
unincorporated businesses pay tax as individuals(income tax),
what type of federal tax do incorporated businesses pay
incorporated businesses pay company tax(businesses with under $10 million in revenue is 27.5%)
what type of tax do both incorporated and unincorporated businesses pay
PAYG (pay as you go )
GST (Good and services tax)
how much is PAYG
a tax based on salaries+wages of employees that are given To the ATO (Australian taxation office)
how much is GST
10% of the cost of inputs/production
what is state tax
state tax is the income tax
list types of state tax(4)
payroll
stamp duty
gaming machine tax
car registration
list some types of local fees and charges (4)
land tax
development applications
parking permits
venue hire
