unit 1 aos2

Question 1

internal environment

Answer 1

factors within a business that a business has control over

Question 2

external environment

Answer 2

the surrounding factors that can impact a business which it has minimal control over. includes operating and macro factors

Question 3

macro factors

Answer 3

social, legal, technological, global and economic conditions that a business operates in and has no control over

Question 4

operating factors

Answer 4

are the primary external factors impacting a business that it has some control over

Question 5

sole trader

Answer 5

a business structure that is owned and operated by one individual

Question 6

unincorporated

Answer 6

the business owner and the business being viewed as the same legal entity

Question 7

unlimited liability

Answer 7

the business owner being held personally responsible for the business’s debts

Question 8

personal income tax

Answer 8

a portion of an individual’s earnings that is paid to the government

Question 9

3 advantages of sole trader

Answer 9

owner has full control, easy and simple to setup, owner can retain all profits

Question 10

3 disadvantages of sole trader

Answer 10

the life of the business dies when the owner dies, difficult to take time off work, unlimited liability puts the owner’s assests at risk

Question 11

partnership

Answer 11

a business structure that is owned by two to 20 business owners

Question 12

3 advantages of a partnership

Answer 12

financial risks are shared between partners, owners can share workload, greater access to finance

Question 13

3 disadvantages of partnership

Answer 13

conflicts could arise due to shared decision making amongst partners, profits needs to be shared, liabilities incurred by one partner is held by all

Question 14

private limited company

Answer 14

an incorporated business structure that has at least one director and a maximum of 50 shareholders

Question 15

incorporated

Answer 15

a business being established as a seperate legal entity from the owner

Question 16

shareholders

Answer 16

the individuals who have purchased shares of a company and therefore part owners.may recieve dividends

Question 17

dividends

Answer 17

the regular sums of money paid out to shareholders from a company’s profit

Question 18

limited liability

Answer 18

is when shareholders are only liable to the extent of their original investment

Question 19

3 advantages of a private limited company

Answer 19

limited liability for shareholders, greater variety of expertise, greater access to capital

Question 20

3 disadvantages of private limited company

Answer 20

complex reporting requirements, setup process takes longer, expensive to set up

Question 21

public listed company

Answer 21

an incorporated business that has an unlimited number of shareholders and sells its shares on the ASX

Question 22

3 advantages of public listed company

Answer 22

shareholders have limited liability, greater access to capital, no permission needed to sell and trade shares

Question 23

3 disadvantages of public listed companies

Answer 23

conflicts could arise through shared decision making, there are complex reporting requirements, expensive to operate

Question 24

social enterprise

Answer 24

a type of business that aims to fulfil a community or environmental need by selling goods or services

Question 25

3 advantages of a social enterprise

Answer 25

the community benefits from its activities, employees have purposeful work, likely to recieve financial support

Question 26

2 disadvantages of social enterprise

Answer 26

difficult to balance the achievement of financial objectives with social and may be difficult to obtain a bank loan as the busienss doesn't solely focus on financial objectives

Question 27

government business enterprise (GBE)

Answer 27

is a business owned and operated by the government

Question 28

2 advantages of GBE

Answer 28

GBE's can rely on the government for the initial investment, they deliver goods and services that meet the community's needs (others may apply)

Question 29

2 disadvantages of GBE's

Answer 29

governments and politicians can interfere, they must follow significant rules and formalities (others may apply)

Question 30

business model

Answer 30

a plan that identifies how the business will operate to make a profit

Question 31

online business

Answer 31

a business model where the goods and services are traded via the internet

Question 32

direct-to-consumer business

Answer 32

a business model where the business's products are sold directly to consumers with no distributers involved

Question 33

bricks-and-mortar business

Answer 33

is a business that has a physical store presence

Question 34

franchise

Answer 34

a business model that grants another person the right to operate under its name, use its business systems and sells its goods and services

Question 35

importer

Answer 35

purchases goods from overseas and sells them in their home country

Question 36

exporter

Answer 36

produces goods in its home country and sells them to overseas buyers

Question 37

3 advantages of purchasing an existing business

Answer 37

the business may already have a strong reputation, time can be saved as the business processes don't need to be developed, the business can generate revenue immediately as it is already opened.

Question 38

3 disadvantages of purchasing a business

Answer 38

employees may be resistant and uncooperative with change in ownership, previous business success could have been due to the previous owner's personal contacts, when purchasing a business its reputation may be negative

Question 39

3 advantages of establishing a new business

Answer 39

Owners have full decision-making control, can provide something that is not currently offered, business owners can create their own positive reputation

Question 40

3 disadvantages of establishing a new business

Answer 40

There may be difficulty in building a customer base, there is greater risk, uncertainty, and room for error, it may be time consuming to find and train new staf

Question 41

resources

Answer 41

the items required by a business to produce its goods and services. includes natural, labour and capital

Question 42

natural resources

Answer 42

are raw materials from the environment that are used in the production of goods and services. CSR is a factor affecting

Question 43

labour resources

Answer 43

are the people who provide the business with their skills and qualifications to conduct business activities. Cost is a factor affecting

Question 44

capital resources

Answer 44

are man-made goods used in the production of goods and services. Supplier considerations is a factor affecting

Question 45

business locations (4)

Answer 45

the physical or non-physical place that a business operates from. Shopping centres, shopping strips, home businesses, online businesses

Question 46

factors affecting shopping centre

Answer 46

high visibility, high cost, high proximity to competitors

Question 47

factors affecting shopping strips

Answer 47

high visibility, variable cost (dependent on popularity), high proximity to competitors

Question 48

factors affecting home businesses

Answer 48

low visibility, low cost, low proximity to competitors

Question 49

factors affecting online businesses

Answer 49

only have visibility through advertisements, minimal costs, high access to competitors

Question 50

what are the 4 sources of finance

Answer 50

equity capital, debt capital, grants, overdraft facilities

Question 51

equity capital

Answer 51

money contributed to a business by an investor in exchange for partial ownership. includes personal, private and public equity.

Question 52

personal equity

Answer 52

could inclue the personal savings of a business owner or money borrowed from family and friends

Question 53

private equity

Answer 53

money from selling shares to individuals or money from an angel investor (business mentor)

Question 54

public equity

Answer 54

can include money from selling shares on the ASX

Question 55

debt capital

Answer 55

the money that has been lent to a business by an external source that must be paid back overtime with interest. bank loans or long-term loans

Question 56

grant

Answer 56

is money provided by a government or another organisation for a particular reason

Question 57

overdraft facilities

Answer 57

agreements between banks and businesses or individuals, that allow a bank account to be withdrawn below zero

Question 58

business support services

Answer 58

are the specialised people facilities, or amentities that aim to help businesses successfully operate. such as legal (solicitor), financial (accountant), technological and community based.

Question 59

business planning

Answer 59

is the process of establishing a business's goals and developing strategies to achieve them

Question 60

SWOT analysis

Answer 60

a planning analysis tool that helps a business identify its internal strengths and weaknesses, as well as any external opportunities and threats