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Business > unit 1 chapter 3 > Flashcards

unit 1 chapter 3 Flashcards

1
Q

The three types of categories of resources

A

Natural - raw materials
Labour- Staff
Capital - equipment

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2
Q

Business locations

A

land is zoned by governments to seperate commercial and industrial businesses and houses

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3
Q

Types of business locations

A
  • Large suburban shopping centres
  • Retail shopping strips
  • online
  • home based businesses
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4
Q

factors to consider when choosing location

A
  • visibility
  • cost
  • close to customers/suppliers
  • competitors
  • complementary businesses
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5
Q

Sources of finance

A
  • self funding
  • Family or friends
  • private investors
  • crowd funding
  • shares
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6
Q

Debt finance

A
  • provided by banks
  • paid back in regular payments
  • interest and charges
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7
Q

bank overdraft

A

overdraw an account to an agreed limit

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8
Q

loan

A

secured- lower interest rate, must offer another asset as security
unsecured- higher interest rate, no need to offer security

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9
Q

mortgage

A

used to finance properties such as offices and factories.

Repaid in regular payments over years

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10
Q

leasing

A

paying money to use equipment that is owned by someone else

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11
Q

collateral

A

when a borrower pledges a property or a business to lender to secure repayment of the loan

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12
Q

government grants

A

the government provides finance to help promote exports, and start a business
must meet specific conditions set out by the government

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13
Q

factors affecting choice of finance

A
  • terms of finance, the amount borrowed and length of loan
  • business structure, equity finance and external finance
  • overall cost, interests
  • flexibility
  • level of control
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14
Q

benefits of purchasing an established business

A
  • stock and equipment

- existing customers and existing reputation

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15
Q

main reasons of starting a business from scratch

A
  • identified a gap in the market

- to develop new goods and services

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16
Q

costs of developing a business from scratch

A
  • high risk
  • uncertainty
  • difficulties securing finance
  • may not have profits for a while
17
Q

Legal business structure types

A

Sole trader (unincorporated)
Partnership (unincorporated)
Company(incorporated) private/public

18
Q

sole trader

A
  • one person owns
  • other staff may be employed
  • unlimited liability
  • must register with ASIC if different to owner’s name
19
Q

advantages of sole trader

A
  • low start up costs
  • complete control
  • retain all profits
  • no tax on profits, only personal income
20
Q

partnerships

A
  • 2-20 partners
  • owners and partners are the same
  • sleeping partner
21
Q

advantages of partnerships

A
  • lower costs to start and operate
  • shared responsibilities and workload
  • no tax on business profits
  • business can continue if one partner dies
22
Q

incorporation

A

when a sole trader or partnership becomes a company with a legal entity seperate from its owners known as shareholders

23
Q

Private business

A
  • Most common type in Australia
  • min 1 shareholder and max 50 not employed
  • shares only sold to those who are approved by directors
24
Q

public business

A
  • shares listed on the Austrlian Securities Exchange
  • has limited or Ltd in it’s name
  • min 3 directors, 2 must be in Australia
25
Q

disadvantages of public business

A
  • government requires to publicly publicly annual report and other information
  • heavy taxation on company and personal
26
Q

business model

A

the way in which a business runs it’s operations to earn it’s income, function and generate a profit on a day to day basis

27
Q

types of business models

A
  • online
  • bricks and mortar
  • social enterprise
  • franchise
  • import and export
28
Q

online business model

A

exists solely on the internet

  • no rent or wages
  • customers cant inspect goods prior to purchase
29
Q

bricks and mortar business model

A

businesses with a physical location

  • -include large retail, whole sale and manufacturing businesses
  • more expensive to set up and maintain
  • many also have an online component
30
Q

social enterprise business model

A
  • aims to improve wellbeing of others
  • often focus on community or environmental needs
  • any surplus or profit is invested back into the business
31
Q

Franchise business model

A
32
Q

import and export

A

trade goods internationally

more common due to globalisation

33
Q

legal advice

A

solicitors advise legal business

34
Q

financial help

A

accountants provide advice on financial business

35
Q

market research

A

collecting and analysing data to help understand potential customers and competitors

36
Q

SWOT analysis

A

Strengths
Weaknesses
Opportunities
Threats

37
Q

corporate social responsibility

A

environmental

Economicial

Business (12 decks)

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