AOS 1
Why are goals important?
Better chance of success
Gives the business purpose and direction
Opportunity to measure whether goals are achieved.
What is a key difference between the macro and operating environment
HINT: Be able to define each
A business has no control over the macro environment (such as government legislation, as businesses do not make the law), whereas it has a small level of control over factors in the operating environment (such as suppliers, as the business can request variations in volumes or delivery times of a resource).
What are the three types of resources?
Natural
Capital
Labour
Describe two sources of business opportunity
Innovation, or new, improved products or methods of doing things, is often the impetus for a new business venture. An innovation can be a whole new product or a variation on an existing product that improves it, such as colour, design or features.
Entrepreneurship involves designing, launching and running a new business.
Why should a business monitor actions of its competitors?
Need to watch marketing strategies, pricing strategies, customer satisfaction measures put into place.
Identify and explain one characteristic of an entrepreneur
Examples of characteristics of entrepreneurs:
ability to take initiative
self-motivated
innovative thinker
creative
able to solve problems
hardworking and self-disciplined
flexible and adaptable to change
resilient
risk-taker
How can the economy affect a business?
Tax rates
Exchanges rates
Interest Rates
Wage growth
Give an example of the three types of resources
Natural - Ore mined, trees logged, crops farmed
Capital - Money invested, machinery used, buildings occupied
Labour - Employees hired to carry out manual tasks or provide expertise.
Give two examples of government assistance when starting a business
Other types of assistance:
Australian Apprenticeships Incentives Program (federal)
Research and Development Tax Incentive (federal)
Boost Your Business Vouchers (state)
Small Business Mentoring Program (state)
council grants (local)
Australian Government’s ‘Accelerating Commercialisation’ program
Why should a business monitor the changing needs of customers?
Must ensure that marketing and website will appeal to the target market, online shopping is easy and efficient.
A good example is to make sure that the true cost of an online order is known as soon as possible in the ordering process (shipping costs etc).
Describe personal and financial independence as a motivator to starting a business.
Business ownership can often be seen as a path to wealth.
On a personal level, it allows a person (especially a sole trader) to establish their own working hours and choose who you work with.
Describe a global issue that might affect a business sourcing materials from overseas or hoping to exports
Exchange rate - a low exchange rate makes ordering in production materials from o'seas more expensive but this will make our exports cheaper for o'seas countries to buy. Vice versa if rate is high
Identify a type of finance. Give an example.
Examples of sources of finance:
trade credit
commercial property mortgage
equity funding
business loan
credit card
bank overdraft
equipment leasing
crowd funding
Benefits of starting your own business?
More freedom to set up the business as the owners wish (allowing them to express their creativity)
Owners determine change and growth
No goodwill needs to be paid
If funds are limited, owners can start on a smaller scale
No poor reputation at the outset to overcome
What are the benefits of setting up a franchise?
Grants rights to others to use your business model for a fee.
Allows rapid expansion of a business
Allows for more capital investment
Can increase profits as the franchisor is be able to receive a percentage of the sales in return for granting the rights.
Ways a business can contribute to the social and economic wellbeing of a nation?
Examples of economic contributions:
creation of employment
increased economic activity and economic growth (increased GDP)
generation of export earnings
investment in research and development
generation of taxation revenue for the government to pay for public services and infrastructure to support the economy
increase in Australia’s innovative capacity
Examples of social contributions:
improving social connections between individuals by offering employment
engaging in socially responsible activities that benefit the environment and community
How can changes in law affect a business?
Give an example.
Eg's can be changes to:
OH&S laws
Consumer Law
Anti-discrimination
accountant
bank manager
solicitor
business financial adviser
technological services/assistance
private networks
formal networks
trade associations
informal networks
Costs of starting your own business?
High risk
No established reputation
Time-consuming to set up and develop a customer base
Profits unlikely to be generated for some time
What are some costs to setting up a franchise?
Identify a key point of difference between market research and a feasibility study.
One difference between market research and a feasibility study is the objective of the process. Market research aims to determine a target market for the product idea and analyse the needs and tastes of consumers, whereas a feasibility study is used to determine if the product idea Is technically and financially achievable.
What is a hazard when exporting products overseas in relation to protecting intellectual property?
Some countries may not have protections for IP and may actively seek to copy designs or concepts to further production in their own country and cut you out of the market.
A business support service? Describe your choice.
accountant
bank manager
solicitor
business financial adviser
technological services/assistance
private networks
formal networks
trade associations
informal networks
Define CSR
corporate social responsibility the commitment by organisations to conduct their business in an ethical manner, to take responsibility for the economic, social and environmental consequences of their activities, and to being accountable to a wide range of stakeholders, including employees, customers and suppliers – now and in the future
Give an advantage and disadvantage of gaining a bank loan to start a business.
Adv: Large amount of finance can become available relatively quickly to start the business as intended.
Disadv: A bank loan has charges associated with setting the loan up and monthly interest repayments on top of paying the loan itself. The bank may demand some form of surety in case you are unable to make payments such as your personal home and will also require that you input your own personal money as well.