Types of business

Question 1

How can businesses be classified?

Answer 1

Businesses can be classified according to differentiating factors. These are size, geographical location, legal structure and industry

Question 2

How many sizes of businesses in Australia? What are they?

Answer 2

4 sizes

1. Micro
2. Small
3. Medium
4. Large

Question 3

What is a Micro business

Answer 3

• 1-5 employees
• Annual turnover is less than 2 mil.
• Eg. photographer, freelancers

Question 4

What is a Small business

Answer 4

• have 2 of the 3 following characteristics
• under 20 employees
• Annual revenue of less than 25 mil.
• Consolidated gross assets of less than 12.5 mil at the end of the financial year
• Eg. Childcare, cafe, florist

Question 5

What is a Medium business

Answer 5

• More than 50 employees
• More than 3 million in turnover
• Eg. School, tutoring, restaurant

Question 6

What is a Large business

Answer 6

• 200+ employees
• over 200 mil. in assets
• over 250 mil. annual turnover
• Eg. Aircraft companies, fast food chains, apple

Question 7

How many classifications of geographical location? and what are they?

Answer 7

3 types

1. Local
2. National
3. Global

Question 8

What is a local business?

Answer 8

A business which sells goods and services to consumers in its own city, town or geographical area.
Eg. A one person barber shop, Coffee Drs

Question 9

Advantages of a local business

Answer 9

• Provide job opportunities for local residents
• Can focus on the specific needs and wants of the local community
• knows the needs and wants and culture within their community, thus can choose goods/services that would be bought by their community

Question 10

Disadvantages of a local business

Answer 10

• Due to having only one location, it is difficult for the business to compete with larger, global companies especially when it comes to pricing
• More effort is needed to be put in to customer service in order to encourage the customer to return
• Limited ability in supplies and production

Question 11

What is a national business?

Answer 11

A national business operates within the borders of a country and like a local business understands the culture of the country and develops products/services around the culture to satisfy their customers.
Eg. Myer, Australia Post

Question 12

Advantages of a national business

Question 13

Disadvantages of a national business

Question 14

What is a global business?

Question 15

Advantages of a global business

Question 16

Disadvantages of a global business