Unit 3 1A - Business Foundations Flashcards
List six types of businesses
Sole Traders Partnerships Private Limited companies Public listed companies Social Enterprise Government Business enterprise
Define the term Business
Businesses are organisations that sell goods and/or services to a market in an aim to make a profit. There are different types of businesses, such as a sole proprietorship and a private limited company, each with their own structure and objectives.
Explain a sole trader business type
A sole trader (or sole proprietor), is a business owned and operated by one person. The proprietor may employ workers to assist with business activities, however the owner provides all the finances, decisions and takes sole responsibility for how the business operates.
List three examples of sole traderships
Florist
hair salon
milkbar
Define the term partnership
A partnership is a business structure where 2-20 people come together to to run a business with the purpose of making a profit. Each owner has equal responsibility over the business, and equally provide business funds.
Give an example of a partnership
Law firm
Define Private Limited Company
Private Limited company is a business that is incorporated, meaning they have their own legal identity. The ownership of the company is divided into equal parts called shares. These shares however are not listed n the Australian Stock Exchange.
Give examples for Private Limited Companies
Visy
Linfox
Define Public Listed Company
A Public Listed company is a business that has shareholders who own the business and directors who run it. The company is listed on the Australian stock exchange for members of the public who can trade shares in it.
Give Examples for PLC
Qantas
BHP Billington
Define Social Enterprise
A social enterprise is revenue-generating business with the aim to fulfil a social cause or mission.
Define government business enterprise
A government business enterprise is a company owned by the Commonwealth. Unlike government departments, this business type aims to make a profit and act under general business principles.
Give examples of a Government business enterprise
Australian post
NBN
List 2 advantages and 2 disadvantages of a sole trader
Owner makes all decisions
easy set- up costs
Unlimited Liability
Business doesn’t run without owner
List 2 advantages and 2 disadvantages of a partnership
funds are shared
diversity in opinions
disputes
unlimited liability
List 2 advantages and 2 disadvantages of a private limited company
Limited liability
typically generates more profit
expensive
define the term profit with a supporting example
Profit refers to the surplus remaining after total costs are deducted from the total revenue. If a business makes $100,000 sales revenue but has costs of $40,000 then they make a profit of $60,000.
List 2 advantages and 2 disadvantages of a social enterprise
satisfaction helping a cause
make a difference
donations
volunteers
List 2 advantages and 2 disadvantages of a government business enterprise
wide market
needs
privatised
sceptical of giving money to the government
define the term profit with a supporting example
Profit refers to the surplus remaining after total costs are deducted from the total revenue. If a business makes $100,000 sales revenue but has costs of $40,000 then they make a profit of $60,000.
Define the term market share
Market share represents the proportion of total sales in an industry for one company in relation to its competitors. This is usually expressed as a percentage.
What is fulfilling a market need
A business’ target market are the customers most likely to purchase their goods and/or services. Identifying what the target market requires allows a business to meet their needs and build a market.
What is fulfilling a social need
Involves benefiting the community through the actions of a business.
Meeting shareholder expectation
Providing what shareholders are expecting of a business such as capital gain on shares and dividends etc
Define stakeholder with a supporting example
A stakeholder is any individual
Define stakeholder with a supporting example
A stakeholder is any individual or group that had a vested interest in the business. Stakeholders are also in some way affected by business activities and decisions made. An example of a stake holder is a Employee, a they have a vested interest in the business being job security, income and a safe working environment. In addition they are also affected by the decision a business makes such as cutting wages or implementing a new safety regime within the departments.
Give examples of stakeholders
Customers Employees and managers Owners/shareholders Competitors Government
Explain stakeholder conflict
Stakeholder conflict occurs when the interests of two or more stakeholders clash. Businesses need to consider the conflicts when making decisions, and weigh up the consequences of neglecting interests.
Describe the conflict between Customers and owners
Customers want good quality at low prices.
shareholder want to earn as much money as possible to receive dividends, which means they would have raise prices.
What is corporate social repsonsibility
CSR is the continued commitment by a business to contribute to economic development while taking into account an approach that is both ethical and socially responsible. It expresses a concern for how a business treats the environment, society and workers beyond what is required by law.
What are three ways a business can show corporate social responsibility.?
reducing carbon footprint
using only fair trade ingredients
using only Australian made products/stock
what are the areas of management responsibility
Operations finance Human resources sales and marketing technology support
Describe the role of the operations manager
Concerned with controlling the activities concerned with converting inputs to outputs in the production of goods and services. They source stock, minimise waste, ensure quality meets customer expectations, sequence of production etc.
How does the operations manager help to achieve objectives: PROFIT
through converting inputs to outputs more efficiently the company will be reducing waste resulting in less money lost by the business and more outputs to sell. If these operations are successful it will result in a surplus.
Describe the role of the Finance manager
Concerned with controlling the activities concerned with receiving and spending money within the business. Activities include financial planning, budgeting, auditing, checking receipts etc.
How does the finance manager help to achieve objectives: PROFIT
If the management of money and budgeting is done better within a business, including ensuring the business isn’t losing money, managing cost of outputs, financial planning of where to invest money most, sales revenue is expected to increase and therefore a profit will be made.
Describe the role of the Human resources manager
Concerned with controlling the activities concerned with managing the employees and all aspects of their working relationship with the business. Activities include recruitment, termination, selection, training and motivation.
how does the HR manager help to achieve objectives: Market share
If HR managers work well and look after the features of human resources, have staff motivated who are well trained, then better quality goods and services are produced. This makes customers happy, which improves the business’ reputation and subsequently the business will attain more customers and therefore a higher market share percentage.
Describe the role of the Technology support manager
Concerned with providing employees and customers with user-friendly assistance for individuals having technical problems with electronic devices. Activities involve dealing with computer issues, phone issues, website crashes etc
how does the Sales and marketing manager help achieve objectives: Fulfilling a market need
through having an effective sales and marketing team are going to be listening and responding to customer needs and adjust their operations accordingly. This results in a better product and therefore the market needs being met
how doe the tech support manager help achieve objectives: MEETING SHAREHOLDER EXPECTATION
It this area is managed well then it is expected there will be less trouble shooting and quicker problems solved and more time spent on core business without interruptions. This efficiency results in more goods and services being produced, meaning more products sold and more profits - meeting the shareholder expectation of receiving dividends and capital gain.
