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Business Management Unit 2 > Unit 2 AOS 1 (Exam Only) > Flashcards

Unit 2 AOS 1 (Exam Only) Flashcards

1
Q

what do businesses need to consider and comply with?

A

There are a number of laws and regulations businesses
need to consider and comply with

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2
Q

what happens if businesses do not consider all laws and regulations?

A

If they do not consider all of them, they risk losing
customers, ruin their reputation, can be fined, or lose
the right to continue trading

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3
Q

what are the legal requirements for establishing a business?

A
  • registering the business name
  • registering a website domain
  • trade practices legislation
  • business tax compliance
  • work safe insurance
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4
Q

who do businesses register their name with?

A

Businesses register their name with ASIC (Australian Securities and Investments Commission)

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5
Q

what businesses do not need to register a name?

A

Businesses with the same name as the owner do NOT need to register their name but may choose to do so

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6
Q

what names must be registered with ASIC?

A

If personal name has ‘Pty Ltd’, ‘Motors’, ‘and Associates’ for instance, added to the name, then the name must be registered with ASIC

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7
Q

what is important to do before registering a name?

A

Before registering a name it is important to check whether or not the name is already taken by searching the ASIC website

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8
Q

what must a business have to register a name?

A

In order to register a business name, the owner must have an ABN (Australian Business Number)

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9
Q

what is becoming necessary for businesses to develop?

A

It is becoming a necessity for businesses to develop an online presence

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10
Q

what is a domain name?

A

the address of a website on the internet

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11
Q

what should domain names be?

A

Helps if the domain name is unique, easy to remember and spell so customers can find it

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12
Q

where can businesses see registered domain names?

A

Businesses can see whether a domain name has already been registered by checking the registry online: Australian Domain Administration

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13
Q

what does building and hosting a website cost compared to registering a domain name?

A

Building and hosting a website can cost thousands of dollars but registering a domain name costs between $10-$100 per year

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14
Q

what is taxation?

A

Taxation is the compulsory payment of a proportion of earnings to the government. Taxation is a means by which the government finances its expenditure by
collecting money from individuals and businesses.

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15
Q

who do the different taxes apply to and what are they?

A

Many different taxes apply to different types of businesses that business owners must be aware of e.g. income tax, capital gains tax, & tax on the provision of goods and services.

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16
Q

who is important for administering and collecting taxes for the federal government?

A

The Australian Tax Office (ATO) is the government body in charge of administering and collecting tax for the federal government

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17
Q

how is income tax calculated?

A

Is calculated differently for individuals and companies

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18
Q

what do individuals pay in income tax and what is it?

A

Individuals pay progressive tax which is when the rate of tax increases with the amount of money they earn

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19
Q

what do different businesses pay in income tax?

A

Companies pay a flat rate tax of 30% for larger businesses or 25% for businesses with a turnover less than $50 million

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20
Q

what are the major federal taxes that apply to businesses?

A
  • pay as you go (PAYG) withholding
  • goods and services tax (GST)
  • fringe benefits tax (FBT)
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21
Q

what is Pay as you go (PAYG) withholding?

A
  • Taken from an employee’s salary or wage directly
  • Imposed on the employee
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22
Q

what is Goods and services tax (GST)?

A
  • A broad-based tax of 10 per cent on the supply of most goods and services consumed in Australia
  • Imposed on all consumers
  • Businesses are only required to register for GST if they earn $75 000 or more in a financial year.
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23
Q

what is Fringe benefits tax (FBT)?

A
  • Tax on the provision of a benefit to an employee — such as a car for private use, or a low-interest loan — in place of a wage or salary
  • Imposed on the employer
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24
Q

what are the major state taxes that apply to business?

A
  • stamp duty
  • land tax
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25
Q

what is Stamp duty?

A
  • Placed on documents that give evidence to transactions, such as the purchase of property
  • Imposed on the individual or business
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26
Q

what is Land tax?

A
  • Annually levied on the owner of the land
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27
Q

what businesses have to complete a BAS - BUSINESS ACTIVITY STATEMENT?

A

Any business registered for GST must complete a business activity statement

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28
Q

what is a BAS?

A

This is a form submitted to the ATO to report a business’s taxation obligations

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29
Q

when are BAS lodged and who with?

A

BAS is lodged periodically with the ATO

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30
Q

what do BAS allow businesses to do?

A

Businesses can remit tax due on income earned during the period as well as any GST and employee PAYG withholding obligations.

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31
Q

when and who is BAS lodged with?

A

BAS is lodged periodically with the ATO

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32
Q

examples of local government legal requirements?

A
  • Land zoning
  • Parking regulations
  • Fire regulations
  • Health regulations and food safety
  • Signage regulations
  • Applications for new developments
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33
Q

what is the Work Health and Safety Regulations?

A

The Work Health and Safety Act 2011 (Cwlth)

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34
Q

what does The Work Health and Safety Act 2011 (Cwlth) mean?

A

The Work Health and Safety Act 2011 (Cwlth) means businesses must work to ensure the health and safety of workers whilst at work.

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35
Q

what does The Work Health and Safety Act 2011 (Cwlth) aim to do?

A
  • Secure the health, safety and welfare of employees and other persons at work
  • Eliminates risk to health, safety or welfare of employees
  • Ensure the health and safety of members of the public are not placed at risk by the conduct of undertakings by employers and self-employed persons
  • Provides for the involvement of employees, employers etc. in the formulation and implementation of health, safety and welfare standards
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36
Q

what is Worksafe Victoria?

A

Worksafe Victoria is a government agency that aims to reduce workplace injuries and support injured workers

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37
Q

what does worksafe provide?

A

Worksafe provides WorkCover insurance which is a compulsory expense for Victorian employers

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38
Q

what does worksafe have the power to do?

A

It has the power to inspect work sites and prosecute employers for any breaches of health and safety requirements

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39
Q

what does WorkCover Insurance provide for employees?

A

It provides employers with insurance cover for the cost of benefits if their workers are injured or become ill as a result of their work

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40
Q

what can WorkCover Insurance cover?

A
  • Replacement of lost income
  • Medical and rehabilitation treatment costs
  • Legal costs
  • Lump sum compensation in the event of a serious injury
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41
Q

what does Australia have in regards to Trade Practices Legislation?

A

Australia has federal and state laws to ensure that businesses and consumers are protected from unfair trading practices

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42
Q

what do each major industry have in regards to Trade Practices Legislation?

A

Each major industry has its own code of practice which provides businesses with guidelines for dealing with customers

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43
Q

what happens if there is a failure to abide by Trade Practices Legislation?

A

A failure to abide by these guidelines can result in heavy fines for a business

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44
Q

what is the Trade Practices Legislation?

A

The Competition and Consumer Act 2010

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45
Q

what is the Competition and Consumer Act 2010?

A

a federal law that specifies what business behaviour is acceptable on issues such as product safety, pricing, and the way a business can compete in the marketplace

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46
Q

who is the Competition and Consumer Act 2010 administered by?

A

The Act is administered by the ACCC
(Australian Competition and Consumer Commission)

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47
Q

what is Consumer Affairs Victoria?

A

Consumer Affairs Victoria is Victoria’s government body established to regulate the marketplace, helping ensure fairness for businesses and consumers

48
Q

what guaranteed rights does the Australian Consumer Law provide?

A
  • Goods must be of acceptable quality (safe, durable, free from defects etc.)
  • Products must be fit for a particular purpose
  • Repairs and spare parts are reasonably available
  • Services are carried out with reasonable care and skill
  • Services are completed within a reasonable time
49
Q

what happens if a good/service fails to meet a consumer guarantee?

A

If a good/service fails to meet a consumer guarantee they have the right to ask for a remedy through repair, replacement or refund.

50
Q

what are legal requirements for establishing a business?

A
  • registering the business name
  • registering a website domain
  • trade practices legislation
  • business tax compliance
  • work safe insurance
  • work health and safety regulations
51
Q

external professionals when establishing a business?

A
  • freelancers
  • bookkeepers
  • recruiters
  • sales professionals
  • marketing consultants
  • Information Technology Technicians (IT)
52
Q

what are freelancers?

A

independent workers who charge businesses or individuals for work on a per job basis

53
Q

what are the types of freelancers?

A

Many different types of freelancers

54
Q

what does the term freelancers apply to?

A

The term doesn’t apply to the type of work, rather the employment relationship with the business they work for

55
Q

what freelancer services do business often engage with?

A

Businesses often engage the services of freelancers who specialise in photography, design, copywriting and web design.

56
Q

what are bookkeepers?

A

Assist a business in keeping and processing a business’s financial records

57
Q

what do bookkeepers charge?

A
  • Often charge an hourly rate for their services
  • Rate varies depending on the skills of the bookkeeper and complexity of the task, at an average of $40 per hour.
58
Q

what are recruiters?

A
  • Recruiter professionals are often used by businesses to find the right staff
  • Staffing is handled by a professional who understands what the business needs
59
Q

what do recruiters charge?

A

Often charge a fee based on the salary of the person employed

60
Q

what are sales professionals?

A

Sales professionals are trained and experienced in finding and persuading people to consume a product

61
Q

why do businesses need sales professional?

A

Often businesses are good at producing valuable goods and services but find it difficult to find customers

62
Q

what do sales professional charge?

A

External sales professionals will often charge a business a percentage or commission for every sale they bring the business

63
Q

what are marketing consultants?

A
  • Responsible for raising awareness of a business’s products and brand with their target markets
  • They often run campaigns that involve advertising and other forms of communication with potential customers
64
Q

what do successful campaigns increase?

A

Successful campaigns will increase brand awareness among consumers and result in increased sales

65
Q

why do businesses need IT professionals?

A

Often, the IT needs of a business are beyond the capabilities of the business owner

66
Q

how do IT services support the businesses?

A

Many IT service businesses exist to support the needs of other businesses,
with everything from the setup of servers and software to troubleshooting
problems that arise on a daily basis

67
Q

is choosing appropriate suppliers important?

A

Choosing the right suppliers is an important part of developing a successful business

68
Q

what is procurement?

A

The process of finding, acquiring and purchasing resources from suppliers

69
Q

what will different businesses have in relation to suppliers?

A

Different businesses will have different supplier needs, yet they need to consider some crucial factors

70
Q

what factors do businesses need to consider when choosing suppliers?

A
  • price
  • quality
  • reliability
  • proximity
  • corporate social responsibility
71
Q

why do businesses need to consider price when choosing suppliers?

A

businesses need to keep costs low to increase profit

72
Q

why do businesses need to consider quality when choosing suppliers?

A

the quality of the materials/goods supplied can impact the quality of the final product

73
Q

why do businesses need to consider reliability when choosing suppliers?

A

businesses need to rely on quick and timely delivery from suppliers

74
Q

why do businesses need to consider proximity when choosing suppliers?

A

being in close proximity of the business can save time and money. Sourcing local supplies also is CSR and more environmentally friendly

75
Q

why do businesses need to consider corporate social responsibility when choosing suppliers?

A
  • A business that uses suppliers that are not CSR cannot be considered CSR themselves
  • It’s the duty of the business to take care when selecting suppliers to ensure that its own business is not tainted by the poor practices of a supplier
76
Q

what are the considerations when choosing socially responsible suppliers?

A
  • Financial/economic impacts
  • Social impacts
  • Environmental impacts
77
Q

what are the financial/economic impacts of suppliers?

A
  • The costs involved in sourcing suppliers which meet the corporate social responsibility objectives of the business
  • The costs involved in maintaining the procurement of socially responsible materials
  • The savings gained from more efficient resource use
78
Q

what are the social impacts of suppliers?

A
  • The labour conditions involved in the manufacture, use and disposal of materials
  • The labour conditions involved in the delivery of materials
79
Q

what are the environmental impacts of suppliers?

A
  • How resources such as energy and water are used in the manufacture, use and disposal of materials, as well as the delivery of materials
  • Whether or not pollution and waste are produced from the manufacture, use and disposal of materials, as well as the delivery of materials
  • How the removal or alteration of natural resources will affect flora and fauna
80
Q

benefits of using suppliers which meet CSR objectives of the business?

A
  • May reduce business costs - savings are achieved through
    ‘green’ initiatives such as reducing the use of energy.
  • Improves the reputation of the business - members of
    the community, including consumers, are likely to perceive that the business is meeting wider community expectations.
  • Customers who are aware that the business is using socially responsible suppliers may be more likely to purchase from the business - this is likely to result in the business becoming more competitive and financially successful.
  • Investors who are aware that a business is using socially responsible suppliers are more likely to invest in the business
81
Q

limitations of using suppliers which meet CSR objectives of the business?

A
  • Increased costs associated with sourcing socially responsible suppliers - socially responsible suppliers are likely to pass increased costs of production on to the business.
  • Maintaining a supply chain that sources sustainable materials will be expensive and time-consuming - checking and maintaining checks on all suppliers claiming to be socially responsible is likely to take time, and result in financial costs.
  • If changing to socially responsible suppliers, the business will need to work with suppliers to ensure that quality is on a par with competitors, if not superior
82
Q

what are technological and global issues that may affect decision-making when establishing a business?

A

generating customer databases and contacts with overseas suppliers and retailers

83
Q

what do business need to plan for with technological and global issues?

A

Businesses need to plan for and respond quickly to technological advances and global issues that may affect the way they operate

84
Q

is technology stagnant?

A

Technology is continuously advancing

85
Q

does technology need changes?

A

Some new technologies can become redundant or outdated not long after implementing due to new advances in technology occuring

86
Q

what does technology affect?

A

Technology affects how businesses create their goods and services but also plays a role in the administration and marketing of a business

87
Q

what is technology in manufacturing?

A
  • Many businesses use robotics or 3D printing
  • 3D printers can create whole buildings, prosthetic limbs etc
88
Q

what can robotics perform?

A

Robotics can perform a wide range of tasks to a greater degree of precision

89
Q

what can robotics help do, benefits and limitations?

A

Robotics can help produce more in a short period of time, higher quality products are produced and less labour is needed but has its downfalls - loss of jobs, costly to implement, needs a lot of space, needs maintenance etc

90
Q

what is technology in administration?

A

Smartphones and web-based software has progressed heaps over the years

91
Q

why can technology in administration help the owner?

A

The owner of a business can do most things using their phone eg viewing live security footage, emails, web-based conferencing, online banking

92
Q

what is technology in marketing?

A

Lots of marketing is now done through social media

93
Q

Advantages of social media marketing are?

A
  • Inexpensive
  • Easy to use and monitor
  • Effective method of gaining exposure
94
Q

Disadvantages of social media marketing are?

A
  • A marketer doesn’t have control over what online consumers write about the product
  • Difficult to measure the number of people exposed to it and the frequency of how many times they’ve been exposed to it
95
Q

what has technology paved the way for?

A

Technology has paved the way for flexible work options

96
Q

what does remote work reduce?

A

This reduces overhead expenses associated with providing additional office space

97
Q

what does remote work allow for?

A

Allows for overseas workers to be available for roles

98
Q

what platforms are used for remote work?

A

Zoom, G Suite and Slack are used for video conferencing

99
Q

what is a customer database?

A

is a bank of information on existing and potential customers, including their contact information, personal details, previous interactions, buying habits and preferences

100
Q

how much data can customer database collect?

A

Technology has the potential to collect A LOT of data

101
Q

what may business owners choose with customer databases?

A

A business owner may choose to build their own customer database using a spreadsheet or to purchase access to a database

102
Q

how can customer databases be collected?

A

Data can be collected from existing customers or retrieved from market research companies who sell the information to businesses for a fee

103
Q

what must businesses do with customer databases?

A

Business MUST protect private customer details from hackers

104
Q

what are the positives of establishing a customer database?

A
  • Easily communicate with customers which results in improved customer relationships and helps the business to provide better customer service
  • Helps build customer loyalty through frequent contact
105
Q

what are the negatives of establishing a customer database?

A
  • Customer databases can be time consuming to develop
  • Costly to purchase from a third party
106
Q

what are global issues?

A
  • Overseas suppliers
  • Overseas customers and retailers
107
Q

what suppliers do Australian businesses have access to?

A

Australian businesses have access to suppliers all around the world

108
Q

how has technology allowed for communication with suppliers?

A

Technology has allowed businesses to make contact with overseas suppliers through the internet, skype etc.

109
Q

advantages of overseas suppliers?

A

Having world wide suppliers provides a wider range of affordable and potentially better quality inputs or access to inputs unavailable in Australia

110
Q

what is essential when business use overseas suppliers?

A

It is essential the owner chooses CSR suppliers

111
Q

disadvantages of overseas suppliers?

A

hidden costs associated with different cultures and time zones, long lead times, takes time to find a suitable supplier etc

112
Q

how have other countries/overseas customers affected the economy?

A

The economic growth of other countries such as China has resulted in a greater demand for Australian commodities eg mining resources and agricultural products

113
Q

what happens is businesses make contacts overseas?

A

The business owner may decide to develop contacts with overseas retailers, making them an exporter

114
Q

benefits of exporting?

A
  • Exporting can allow access to more customers and larger markets
  • Exporting can increase profits, spread the business’s risk and reduce dependence on the local market
115
Q

limitations of exporting?

A

Exporting does have hidden costs, can be costly to develop export markets due to the time taken to find support and customers willing to purchase the business’s products

116
Q

When developing contacts with overseas retailers, the business owner will need to?

A
  • Meet with the prospective customers
  • See the overseas market first hand
  • Investigate local pricing
  • Experience how business is conducted in the new environment

Business Management Unit 2 (3 decks)

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