Nature of Business
Define business
A coordinated effort by individuals to combine resources in order to produce goods and services that satisfy consumer needs and wants for the ultimate goal of making a profit.
Definition of Management:
the process of coordinating a businesses' resources to achieve their goals.
what is a Small to Medium enterprise (SME)
a firm with less than 200 full-time employees and/or less than $10 million in total
Assets = ?
Liabilities + Owners Equity
SWOT analysis?
Analyzing a businesses Strengths, weaknesses, Opportunities, Threats
List the types of classification of businesses there are.
- Classification by Size
- Classification by Geographical spread
- classification by Industry
- Classification by Legal structure
what are the 9 skills of management?
Interpersonal skills, communication skills, strategic thinking skills, Vision skills, problem-solving skills, decision-making skills, flexibility, adapting to change, reconciling the conflicting interests of stakeholders.
What role do SME's play for a country
- employment
- produce goods and services
- contribute to the economy (account for 20% of money spent
COGS = ?
OS + P - CS
JIT ?
Just in Time (quality management)
What are the main factors influencing choice of legal structure of a business.
- Size
- ownership
- finance
What are the approaches to management? & provide 2-3 words to describe the structure of that approach.
Classical / Scientific Approach (planning, organizing, controlling)
Behavioral approach (leading, motivating, communicating)
Contingency Approach (adapting to changing circumstances)
List at least 4 reasons for why a business might success or fail (4 each)
- access to information, reputation, focus on market niche, flexibility, entrepreneurial ability.
- poor finance management & performance, unrealistic expectations, ineffective leadership, inadequate market research, wrong strategies, insufficient capital.
Owners Equity?
A - L = OE
4 P's of marketing
product, price, place, promotion
What are the external and internal influences on a business?
External (economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets)
Internal (Products, location, resources, management, business culture)
what are the four key business functions and what do they involve? Choose your words carefully!
Operations, Marketing, Finance, HR
What are the sources of finance? (debt and equity)
Debt: overdraft, commercial bills, factoring, mortgage, leasing, debentures, unsecured notes
Equity: capital, retained profits, family friends, Private investors, shares.
Net Profit = ?
NP = Gross profit - Total Expenses
7 P's or marketing
product, price, place, promotion,
people, process, physical evidence
List the four stages of the business life cycle AND two characteristics and one challenge
Establishment, Growth, Maturity, Post-maturity
E - cash flow shortages, marketing strategies, survival
G - experience, growth and demand strain, labor shortages
M - survival, cost control, staff motivation, R&D
P- difficulty obtaining money, suppliers asking for cash payments due to high risk, profit decline, low staff morale
How do you manage change effectively?
- identify a need for change
- Business Information systems
- Setting achievable goals
- Resistance to change
what are the downsides of purchasing an already established business?
(at least 4 reasons)
- Inherit immediate problems
- may loose business reputation due to new ownership
- employees may be resistant to change
- businesses may be overpriced
- difficulty of assessing goodwill
Break-Even Point
Total fixed costs / Unit price - variable costs per unit
PIECEWIQ (8 roles)
profit, income, employment, choice, entrepreneurship, wealth, innovation, Quality of life