Personal qualities & the business idea
3 rewards of business ownership
own boss
profits
contributing to society
3 establishment options
setting up a new business from scratch
purchasing an existing business
purchasing a franchise
3 market considerations
goods and service
location
price
two sources of finance
debt
equity
Australian Business Number
2 ways someone can get a business idea
listening to people, reading magazines, identifying a gap in the market
goodwill
the monetary value attached to the reputation of a particular business
why is location important for a prospective owner
it determines whether or not it will ultimately succeed.
what is equity finance
funds contributed by the owner
internal
Goods and services tax - 10% of the supply of most goods and services consumed in Australia
list 3 sources of information
professional advisors
government agencies
chambers of commerce
3 advantages of starting from scratch
freedom in how to set up
determine the pace of growth and change
no goodwill for which the owner has to pay
market research
the process of systematically collecting, recording and analyzing information concerning a specific marketing problem.
2 advantages and 2 disadvantages of debt finance
A- owner does not have to sell ownership, taxation advantages
D- regular payments have to be made, increased risk.
on cost
payments for non wage benefits
two ways a business can achieve a competitive advantage
differentiation
cost of production
2 advantages and 2 disadvantages buying an existing business
A - sales to existing customers, good history will increase likelihood of success, stock already there
D- hard to change negative reputation, employee resistance to change, previous success may be tied to owner
what are the 3 pricing methods
cost based
competition based
market based
2 advantages and 2 disadvantages of equity finance
A- dosent have to be repaid, cheaper, less risk
D- owner needs to sell ownership, small amount of finance may only generate low profits
name 3 federal taxes
GST, FBT, PAYG
6 personal qualities that influence the establishment of an SME
qualification
skill
motivation
entrepreneurship
cultural background
gender
2 advantages and 2 disadvantages of buying a franchise
A- Immediate benefit is derived from the franchisor's goodwill because the name is established
equipment and design is already available
D- profits shared with franchise, stock is bought from franchisor
the total cost of producing or purchasing a product and then adding a mark up for profit
overdraft
mortgage
debenture
factoring
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