Business Unit 1 Semester Exam

1A - Define Entrepreneurship

Entrepreneurship is the process of establishing a business to satisfy a need in the market whilst taking on the associated risks

1B - List personal motivations for starting a business

• Personal independence

• Financial independence

• Make a profit

• Fulfil a market need

• Fulfil a social need

1B - Define personal independence

involves a person being in control of their own decisions or actions

1B - Define financial independence

the ability to fund a desired lifestyle without relying on income from another individual

1B - Define make a profit

involves a business generating more revenue than expenses it incurred

1B - Define fulfil a market need

when a business fills a gap in the market by addressing customer needs that are currently unmet or underrepresented by competitors in the same industry

1B - Define fulfil a social need

improving society and the environment through business activities

1C - Define a manager

a manager is an individual who has the responsibility of overseeing and handling employees whilst running the day to day business tasks to achieve objectives

1C - List characteristics of successful entrepreneurs

• risk taking

• networking ability

• determination

• innovative

• resourcefulness

• knowledge

• creative

1D - List sources of business opportunities

• innovation

• market opportunities

• changing customer needs

• research and development

• technological development

• global markets

1D - Define innovation

involves creating and implementing new ideas or significantly improving upon an existing good, service, or way of doing something.

1D - Define market opportunities

a need or want that is currently not being met by any business

1D - Define changing customer needs

the transitions in the desire of consumers e.g. convenience, technology, trends, ethical behaviours

1D - Define research and development

involves directing resources, such as money, towards discovering, creating, and introducing new products and processes

1D - Define technological developments

the invention and innovation of tools that solve problems and enhance processes

1D - Define global markets

the area in which businesses trade goods and services, comprised of both businesses and customers from countries all across the world

1E - Define business goals

what a business wants to achieve within a specific time frame

1E - What are SMART goals?

S - Specific

M - Measurable

A - Attainable

R - Relevant

T - Time Bound

1H - Define economic wellbeing

reflected by the level of income, consumption, and wealth people or households have to support their material living standards

1H - List how businesses contribute to the economy

• Employment opportunities

• Taxation revenue

• Infrastructure

• Economic growth

• International trade

• Research and development

1H - Define employment opportunities

high levels of employment benefit the economy as individuals use their income to purchase goods and services

1H - Define taxation revenue

a compulsory payment to the government, which is used to finance the provision of public goods and services

1H - Define infrastructure

the essential structures and facilities that are required for an economy to operate

1H - Define economic growth

when the total value of goods and services produced by an economy increases over a period of time

1H - Define international trade

the exchange of goods and services between different countries

1H - Define research and development

involves directing resources such as money towards discovering, creating, and introducing new products and processes

2A- Define the internal environment

involves factors within a business that a business has control over

• SWOT analysis

• resources

• business location

• sources of finance

• business support services

• types of business models

• CSR for business planning

• purchasing vs establishing

• types of businesses

2A- Define the external environment

involves the surrounding factors that can impact a business which it has minimal control over. Either macro or operating

2A- Define operating factors

the primary external factors impacting business that it has some control over.

• customer needs and expectations

• special interest groups

• suppliers and the supply chain

• competitors behaviour

2A- Define macro factors

the social, legal, technological, global, and economic conditions that a business operates in and has no control over.

• legal and government regulations

• societal attitudes and behaviours

• economic conditions

• technological considerations

• global considerations

• CSR considerations

2B - List the types of businesses

• sole trader

• partnership

• private limited company

• public listed company

• social enterprise

• government business enterprise

2B - Advantages of public listed company

• shareholders have limited liability

• there is greater access to expertise as more people are involved

• no permission is needed to trade and sell shares

• the life of the company can live longer than the directors

2B - Disadvantages of public listed company

• conflicts could arise through shared decision making between directors

• there are complex reporting requirements, such as annual financial reports, that need to be published to the public

2D - Define purchasing an existing business

involves buying a business that is already set up and operating

2D - Advantages of purchasing an existing business

• already a strong reputation with loyal customers

• original business owner and employees can provide advice and assistance to promote business success

• employees are less likely to need training

• time saving, as processes and systems do not need to be developed

• stock and suppliers may already be available

• business can generate revenue immediately

2D - Disadvantages of purchasing an existing business

• reputation may be difficult to judge and may be negative

• previous success may be due to the previous owners personality or personal contacts, which cannot be transferred

• employees may be resistant and uncooperative with the change in leadership

• goodwill can be difficult to value, and the business may be overpriced

2G - List sources of finance

• equity capital

• debt capital

• grants

• overdraft facilities

2G - Define equity capital

money contributed to a business by an investor in exchange for partial ownership

• personal equity (money saved up)

• private equity (selling shares to select individuals)

• public equity (selling shares to the public)

2G - Define debt capital

money that has been lent to a business by an external source that must be payed back over time with interest

2G - Define grants

money provided by a government or another organisation for a particular reason

2G - Define overdraft facilities

agreements between banks and businesses or individuals, that allow a bank account to be withdrawn below zero.

2J - Define CSR

the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions.

2J - List CSR considerations for business planning

• sourcing sustainable resources

• planning to sell environmentally responsible products

• providing supportive conditions of work

• fair employment

3B - Define legal and government regulations

the laws and rules made by governments and parliaments, as well as decisions made by courts

3B - List legal and government regulations

• employment laws and regulations

• environment legislation

• industry regulations

• council regulations

• taxation requirements

3B - Define employment laws and regulations

rules that govern the relationship between employees and employers e.g. minimum wage, OH&S

3B - Define environment legislation

the set of laws that aim to preserve the environment e.g. minimising water use

3B - Define industry regulations

rules that are specific to businesses within a certain industry e.g. working with children check, RSA

3B - Define council regulations

local government rules made to govern businesses operating in a specific geographic area e.g. zoning laws, parking, use of sidewalk

3B - Define taxation requirements

laws and rules related to tax that apply to all businesses e.g. businesses having a tax file number (TFN)

3D - Define economic conditions

the conditions that exist in relation to the productive performance and financial stability of a nation or other geographical area

3D - List economic conditions

• interest rates

• employment levels

• tax rates

• consumer confidence

3D - Define interest rates

the price paid for money which has been borrowed, expressed as a percentage

• high interest rates = less people spending, business loans are more expensive

• low interest rates = more people spending, business loans are less expensive

3D - Define employment levels

measured as the percentage of the labour force who are working in paid employment

• high employment rates = low unemployment levels = businesses may struggle to find workers, or have to offer higher wage rates to attract workers

• low employment rates = high unemployment rates = businesses may find it easier to find workers, and may be able to offer lower wages to attract employees

• low employment rates = high unemployment rates = businesses may find it easier to find workers, and may be able to offer lower wages to attract employees