Resources
What are resources?
Resources are the people and objects that are needed for the business to function properly.
Identify two benefit of buying an existing business
Sales to existing customers generate instant income.
A good business history increases the likelihood of business success.
A proven track record makes it easier to obtain finance.
Stock has already been acquired and is ready for sale.
The seller may offer advice and training.
Equipment is available for immediate use.
Existing employees can provide valuable assistance.
Define equity
Equity refers to the funds contributed by the business owners to start and then expand the business
Why unincorporated businesses are the most common form of legal business structure.
Unincorporated business because this structure is the easiest and cheapest to establish.
What does 'S.W.O.T' stand for?
Strengths, Weaknesses, Opportunities and Threats
What are the natural, labour and capital resources that a fast-food restaurant would likely have?
Potatoes, workers/manager & fryer
In what circumstances might someone choose to start a business from scratch?
Recognition of a gap in the market, where it is clear that existing providers are not catering for the demand for particular goods or services.
The development of new goods or services, when the person who has created something unique chooses to go into business to market their innovation or invention.
Either:
Regular repayments on the borrowings must be made, so the business must generate sufficient earnings to make these payments.
There is higher risk for businesses using debt as the interest, and government charges, have to be paid on top of the principal amount borrowed
Distinguish between an incorporated business and an unincorporated business.
An unincorporated business has no separate legal existence from its owner(s), and will be either a sole trader or partnership. An incorporated business has its own separate legal existence, so that regardless of what happens to individual shareholders of the company, the business can continue to operate.
Define the term 'business plan'
A business plan is a written statement of the goals and objectives for the business, and the steps to be taken to achieve them.
What is unique about labour when compared with natural and capital resources?
As labour resources refer to the people that provide their skills, effort and knowledge to the business, we need to remember to treat them with compassion as any decision made by the business can have drastic effects on the lives of its workers.
Which of the following is not a benefit of starting a business from scratch:
The owner has the freedom to set up the business exactly as he or she wishes.
The owner can determine the pace of growth and change.
There is no goodwill for which the owner has to pay.
A proven track record makes it easier to obtain finance.
If funds are limited, it is possible to begin on a smaller scale.
A proven track record makes it easier to obtain finance.
What are two advantages of using equity to finance a business
Either:
Equity does not have to be repaid unless the owners leave the business.
Equity is cheaper than other sources of finance because there are no interest payments.
An owner who contributes equity to a business retains control over how that finance is used.
Under what circumstances will a sole trader not need to register a business name?
A sole trader will not need to register a business name if the business has the same name as the owner.
List at least 3 main benefits of a business plan
Either:
It helps test the viability of the business.
It assists the business to be proactive rather than reactive.
It assists in maintaining the business operation, especially focusing attention on the goals and objectives.
It indicates the owner’s ability and level of commitment.
It forces the business owner to justify his or her plans and actions.
It identifies the business’s strengths and weaknesses.
What is one factor relating to natural resource that a business would have to consider when planning?
Environmentally friendly/reducing wastage during production process/ are workplaces designed in a sustainable way that minimises energy usage.
How might operating as a franchise address some of the problems associated with starting a business from scratch?
Franchising has a success rate of almost three times that of independent businesses, largely due to its involving an established business name backed up by managerial expertise.
Briefly describe five factors that a business should consider when deciding on a source of finance
The business should consider these five factors:
Terms of finance — the amount and frequency of repayments
Business structure — what type of business is it? (private or public company, sole proprietorship, partnership etc.)
Overall cost — the added up value of all repayments made over the life of the loan
Flexibility — the ability of the business to change the terms of the agreement or exit the loan
Level of control — how much ownership over the decisions made by the business will be retained if the owner chooses a given source of finance
List two factors that a prospective business owner should consider when evaluating a partnership as a possible legal structure?
Either:
Are the owners prepared to risk unlimited liability of operating their business?
Will the prospective partners have enough finances, skills and expertise to establish and grow the business?
Do the individuals believe that their prospective partners will act in the best interest of the business?
Is each individual certain that their prospective partners will not expose them to personal debts?
Can the prospective partners foresee disputes arising due to a clash of personalities or opinions?
How can a SWOT analysis be used to evaluate a business's current situation
A SWOT analysis is a planning tool which identifies the business’s internal strengths and weaknesses, as well as any opportunities and threats from the external environment. A business owner may analyse the strengths of their business and find that it has a product that market research suggests is in high demand. The owner may also consider whether there are opportunities to export this product to new markets. When analysing the business’s weaknesses, the owner may determine that the business will not have the facilities to produce sufficient amounts of the product. The business owner may find that a threat comes from competitors moving into domestic markets. After conducting the SWOT analysis, the business owner may plan to develop new manufacturing facilities and then export the business’s products.
What is one factor relating to both labour and capital resource that a business would have to consider when planning?
Labour
#of workers needed / skills needed from the employees / what training should be offered / legal responsibilities towards employees
CapitalWhen was Greater Western Sydney Giants established?
2009
Discuss the decision to use crowdfunding as a source of finance.
Crowdfunding is a method of raising finance by using online and social media networks. You might, for example, appeal to a large group of people to provide funding for the launch of her new product using a crowdfunding platform. This may involve setting a goal for the project, providing the details of the project and inviting people to contribute finance. This could be a quick way for you to raise finance with few fees. It will also allow you, as the business owner, to connect to potential customers. This may provide her with the opportunity to receive feedback, as well as gain some guidance on how to improve the business or product.
Which of the following businesses is not a sole trader nor a partnership
Jim's mowing
Cultural Commons
In2Performance
B.A Bakery
Discuss the use of a business plan.
A business plan is a written statement of the goals and objectives for the business, and the steps to be taken to achieve them. A benefit of a business plan is that it allows the prospective business owner to identify the business’s strengths and weaknesses. This can help to test the viability of the business. Further, the use of a business plan assists in maintaining the operations of a business — especially focusing attention on the goals and objectives.
A limitation of a business is that it is simply a plan — it does not guarantee the ultimate success of a business. For example, the profit of a business that has completed a business plan may be lower than anticipated, because a range of factors out of the owner’s control can affect it. Another limitation of a business plan is that it actually needs to be implemented; many business owners develop a business plan and then neglect to follow it.