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Business > Types of businesses > Flashcards

Types of businesses Flashcards

1
Q

What are the main ways businesses can be classified?

A

By size, industry sector, legal structure, and geographical location.

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2
Q

What are the size classifications for businesses?

A

Small to medium enterprises (SMEs) and large businesses.

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3
Q

How does the Australian Bureau of Statistics (ABS) define small businesses?

A

Based on the type of industry and size of the labor force.

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4
Q

What are the types of businesses by size according to the number of employees?

A

Micro: <5 employees
Small: <100 (manufacturing) <20 (non-manufacturing)
Medium: 20-199 employees
Large: >200 employees

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5
Q

Which sector is the largest contributor to Australia’s economy?

A

Small businesses.

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6
Q

Where are many small businesses in NSW located and why?

A

Sydney and Central Coast region due to high population.

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7
Q

What is a local business?

A

A business that operates within one area.

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8
Q

What is a national business?

A

A business that operates across the country, such as Woolworths and Coles.

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9
Q

What are some advantages of national businesses?

A

Greater awareness and trust, cost savings through bulk buying.

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10
Q

What is an international business?

A

A business with ownership and production based in one country that exports goods and services to other countries, like Giorgio Armani.

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11
Q

What factors contribute to the growth of international businesses?

A

Technological developments and strengthening relations between countries, growth of a common consumer market.

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12
Q

What is a transnational (multinational) corporation (MNC)?

A

A corporation that operates and sells in many countries, such as Toyota and Ford.

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13
Q

What are the different industry sectors businesses can be classified into?

A

Primary, secondary, tertiary, quaternary, and quinary.

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14
Q

What is the primary industry sector?

A

Acquisition of raw materials, for example, wheat, timber, and sugarcane.

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15
Q

What is the secondary industry sector?

A

Combining raw materials with labor and equipment, for example, manufacturing.

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16
Q

What is the tertiary industry sector?

A

Providing a service, for example, hairdressers, engineers, nurses.

17
Q

What is the quaternary industry sector?

A

Information services, for example, banks, telecommunications, IT.

18
Q

What is the quinary industry sector?

A

Domestic services, traditionally done in the home, for example, take-away restaurants, cleaning, childcare.

19
Q

How is the legal structure of a business defined?

A

By how ownership of the business is registered and whether the business is controlled by a select group of people or is ownership open to the public.

20
Q

What is a sole trader?

A

A business owned by one person, unincorporated with unlimited liability, where funding and day-to-day management are handled by the owner.

21
Q

What are the advantages of being a sole trader?

A

Quick and inexpensive to establish, less costly, managerial freedom, simple management structure, owner retains all profit.

22
Q

What are the disadvantages of being a sole trader?

A

Unlimited liability, may lack skills, limited capital.

23
Q

What are the advantages of a partnership?

A

Division of responsibilities, joint decision-making, additional finance.

23
Q

What is a partnership?

A

A business owned by 2-20 owners, unincorporated with unlimited liability, governed by a partnership agreement.

24
Q

What are the disadvantages of a partnership?

A

Unlimited liability, potential for disputes, shared profit.

25
Q

What is a private company?

A

A business with 1-50 shareholders, incorporated with limited liability, where ownership is not affected by changes in owners (Pty Ltd).

26
Q

What are the advantages of a private company?

A

Limited liability, usually run by smaller family businesses with greater control and financial decisions.

27
Q

What are the disadvantages of a private company?

A

Limited capital due to ownership being limited to 50 shareholders, possible long-term viability issues if unable to expand, invitation-only ownership, expensive entry fees, potential disagreements.

27
Q

What is a public company?

A

A business with 5 or more shareholders, incorporated with limited liability, managed by a board of directors, listed on the ASX, and owners receive dividends.

28
Q

What are the advantages of a public company?

A

Limited liability, access to unlimited shares for expansion funds, ability to raise funds through equity finance, highly skilled and experienced management.

29
Q

What are the disadvantages of a public company?

A

Complex stock exchange requirements, complex and political management, control management determined by majority of shares.

30
Q

What does privatising a government enterprise involve?

A

Transferring ownership from the government to the private sector.

31
Q

What is a government enterprise (GBE)?

A

A government-owned and operated business, such as Australia Post, providing essential community services like healthcare and education.

32
Q

What factors influence the choice of legal structure for a business?

A

Size of the business, ownership structure, and the finances needed.

33
Q

What are companies limited by guarantee focused on?

A

Providing service rather than making a profit.

34
Q

What is a cooperative?

A

A company where the owner is either a supplier or customer, with owners receiving dividends and having limited liability.

35
Q

What are the types of cooperatives?

A

Consumer cooperative: Provides retail services.
Producer cooperative: Acts as an agent for businesses to sell goods and services.
Financial cooperative: Provides financial services for members.

36
Q

What is a trust in a business context?

A

An entity that manages assets on behalf of individuals.

Business (7 decks)

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