Nature of Business
Define the term entrepreneur
A person who sets up a business or businesses, taking on financial risks in the hope of making a profit
Why is it important for a business to set achievable goals
Provides direction, motivates employees, measures progress, supports decision-making, increases chances of success
What is a vision statement
What the business hopes to achieve in the future
What are the three key elements of the production process
Inputs, transformation process, outputs
What is a small to medium enterprise
A business with fewer than 200 employees or an annual turnover of under $50 million
What is the difference between a private and public company
A public company sells stock to the public and loses control of ownership, whereas a private company has full ownership
What are two effective management skills
What is Goods and Services Tax (GST)
A 10% tax on most goods and services sold in Australia. It is paid by customers, collected by businesses, and then sent to the Australian Taxation Office (ATO)
Define assets and liabilities
An asset is something you own
A liability is something you owe
Why should managers adopt the contingency management approach
Flexibility in decision-making, responds to employee needs, improves problem-solving, enhances organisational performance, reduces resistance to change
Describe two internal influences on a business
Products, location, resources, management and business culture
Explain TWO reasons for resistance to change
Financial costs, fear of losing control, does not align with workplace culture, fear of job loss, lack of clear communication
What is an advantage and disadvantage of buying and existing business
Disadvantage: potential hidden problems, higher purchase cost, resistance to change, limited flexibility
What are the three financial statements
Higher customer satisfaction, increased efficiency, competitive advantage, improved employee morale, better compliance, long-term profitability
Describe the elements of the product life cycle
Establishment (start), growth (increase in sales, market awareness), maturity (sales peak) and post-maturity (renewal, steady or decline)
What is the difference between autocratic and democratic leadership styles
Autocratic (classical) is when an individual has control over the decisions, whereas democratic (behavioural) allows everyone to contribute
Explain one forecasting tool
Break-even analysis (what a business needs to sell to break-even), cash flow projection (predicts timing of cash inflow and outflow)
What is the difference between an award and enterprise agreement
An award covers the entitlements for a specific industry, whereas an enterprise agreement is the entitlements negotiated for a specific business.
Why is it important to engage in ethical business practices
Builds customer trust and loyalty, improves brand image, attracts and retains employees, long-term sustainability
Define two advantages and two disadvantages of a sole trader
Advantages: full control, simple and inexpensive set up, owner keeps all profits, privacy, flexibility
Disadvantages: unlimited liability, limited capital, high workload, limited skills and experience
Why should managers focus on the triple bottom line
Measures business success in profit, planet and people.
Describe the elements of a SWOT analysis
Internal factors (strengths and weaknesses) and external factors (opportunities and threats)
Describe the elements of a marketing mix
Product, Place, Price, Promotion
Explain two factors that can lead to a small to medium enterprise failure
Poor management skills, inadequate financial planning, lack of market research, ineffective marketing, economic downturn, poor location, resistance to change, legal or compliance issues