Start up Stage
What stage comes after the Seed Stage?
Start up stage
What are the two major categories of finance?
Equity finance and debt finance.
What does ABN stand for?
Australian Business Number.
What does the first "S" in STEEPLE stand for?
Social
What does WHS stand for?
Workplace Health and Safety.
What document is often analysed by banks and investors before funding a business?
Business Plan (accept Feasibility Report)
Is personal savings an example of equity or debt finance?
Equity finance.
How many digits are in an ABN?
11 Digits
Would new technology be considered an internal or external factor?
External factor.
What formula is used to calculate owner's equity?
Assets – Liabilities = Owner's Equity.
Name one pathway option available to someone wanting to enter business ownership.
Open a new business, buy an existing business, or purchase a franchise.
What is the main difference between equity finance and debt finance?
Debt must be repaid with interest; equity is owner/investor capital.
What is the current GST rate in Australia?
10%
What does turnover mean?
The revenue earned by a business.
What is a budget used for?
Planning future performance and assisting decision-making.
Which pathway usually has the highest level of risk?
Opening a new business.
A business borrows $50,000 to buy equipment. Is this short-term or long-term debt finance?
Long-term debt finance.
Which government agency collects taxation?
Australian Taxation Office (ATO).
A rise in interest rates would fall under which STEEPLE category?
Economic
What government body regulates business names and companies?
ASIC.
Explain one advantage and one disadvantage of buying an existing business.
Advantage: existing customers/reputation. Disadvantage: higher purchase price or inherited issues.
Why might a start-up business choose more equity finance than debt finance?
It reduces interest costs and financial risk.
Name two legal requirements a business must consider before operating. Why might a business choose a bank loan instead of personal savings?
ABN, GST registration, licences, permits, insurance, WHS compliance, Fair Work obligations, business name registration.
Why is strategic planning heavily influenced by macro-environmental factors?
Businesses must respond to changes in the external environment to remain successful.
A student wants to start a food truck business. Identify: