Business Management Unit 1

Business concept

A clear and concise description of a business opportunity

Business Idea

a concept that can be used for financial gain

Enterprise

skills that help an individual identify opportunities and use them to their advantage

Market Research

The activity of gathering information about consumers' needs and preferences.

What questions do I ask to do market research?

Is the business concept entirely new?
Who will buy the product?
Why will they buy the product?
What needs/wants have to be satisfied?
How big is the market?
Where is the market?
Who are the competitors?
What makes this product different from what already exists?

Feasibility study

an assessment of the business idea's potential for success

What might a feasibility study include?

· an assessment of the market

· a consideration of the operations

· an analysis of commercial feasibility

-an appraisal of the potential owner's management ability

· an understanding of whether others have tried this idea:

Economy

A system for producing and distributing goods, and services to fulfill people's wants and needs

What 3 questions determine the economy?

What and how much to produce?
How to produce?
For whom to produce?

Economic wellbeing

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

Employment

Having a job or career and responsibilities that go with it

Tax revenue

government income due to taxation

Economic growth

the ability of the economy to increase the production of goods and services

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country.

Exports

Goods and Services sold to other countries

Balance of Payments (BOP)

a statement of account that shows all transactions between the residents of one country and the rest of the world for a given period of time

Research and Development Tax Incentive

helps companies innovate and grow by offsetting some of the costs of eligible research and development

Tax offsets

A tax offset (also sometimes known as a tax rebate) reduces the tax you pay on your taxable income (known as your tax payable). The amount of tax offset you receive depends on: your taxable income. the amount of tax you need to pay.

Social wellbeing

generally refers to how well we
feel about our relationships and interactions with others, including our ability to establish and maintain positive relationships as a community

How can social wellbeing be quantified?

economic measures (GDP, income, level of employment, consumption of goods and services) and non-economic measures.

Corporate Social Responsibility

the notion that corporations are expected to go above and beyond following the law and making a profit

Federal Government Support

support that the federal government provides for businesses, often in the form of rebates and grants.

AusIndustry

Division of the department of industry, science and resources, and is the federal government's principal agency for delivering assistance, programs and services that support industry, research and innovation.

The Entrepreneur's program

A multi-platform network of practical advice and support for businesses, including advice from people with private sector experience, co-funded grants to commercialize new products and processes, funding to take advantage of growth opportunities and connection and collaboration opportunities.

Corporate Research Center (CRC) Program

Supports the ability of Australian industries to complete and produce by helping businesses partner with the research sector to solve industry-identified problems.

Breakthrough Victoria Fund

A fund to drive investment, research, innovation and growth over 10 years.

R&D Cashflow Loans

A $50 million fund for Victorian small-to-medium-sized enterprises claiming the R&D tax incentive.

Local councils can....

Provide business grants and funding programs.

Foundation of Young Australians

run school based educational programs regarding business management

VCTA

Victorian Commercial teachers association

SBCF

Small business centers Victoria

BEC

Business Enterprise Centers

INNOVIC

Victorian Innovation Center

Entrepreneurship

the activity of setting up a business or businesses, taking on financial risks in the hope of profit.

Business opportunities

An opportunity to create a business from an idea or consumer need.

Innovation

An improvement on or new technological product, system, or method of doing something.

What 3 things does entrepreneurship entail?

Pursuing business opportunities, innovation and seeking growth.

Social Needs

a customer need that relates to how a person wants to be perceived by others when using a product or service.

Financial Independence

The ability of someone to manage his or her money in such a way that he or she has sufficient funds to live his or her chosen lifestyle without assistance from others.

Personal Independence

the capacity to be in control of decisions that affect one's everyday actions or activities

Profit

The financial gain made in a transaction

Market need

the goods or services that customers require that are not readily available

Business manager

a person who drives the work of others in order to run a major business efficiently and make a large profit

Business entrepreneur

individuals who conceive an idea for a new product or service and then creates a business to materialize their idea into reality

Shared vision

A common goal for more than one individual

3 main traits of an entrepreneur

Initiative, innovation and enterprise

Global Innovation Index

The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation, published by the World Intellectual Property Organization.

What are the 6 main business opportunities?

Innovation, Changing customer needs, Technological development, global markets, research and development and market opportunities.

SMART goal

Specific, Measurable, Attainable, Relevant, Time bound

What are the 5 steps of the decision making process?

Step 1: Develop goals
Step 2: Outline the facts
Step 3: Identify alternative solutions
Step 4: Analyse alternatives
Step 5: Choose and Improvise an alternative

Intellectual property

A product of the intellect, such as an expressed idea or concept, that has commercial value.

Trademark

A right granted over a letter, word, phrase, number, sound, smell, shape, logo, picture or aspect of packaging that a business will use to represent it's products and/or services

Patent

A right granted for any device, substance, method or process that is new, inventive and useful.

Copyright

Free and automatic protection of original works, such as writing, music, art, films, sound recording, broadcasts and computer programs.

Design Rights

Rights given to the owner to commercially use, license or sell a design (the visual appearance of a product)

Domain name

A potential owner can register a domain name (the business' unique address on the internet) so that nobody else can register it

External environment

all elements outside a business that may act as pressures or forces on business operations

Operating environment

made up of stakeholders external to a business, which have a direct impact on the operation of the business. The business has some control over this environment.

Macro environment

The broad forces, conditions and trends in the economy and society in which the business operates. The business has no control over these factors.

Legal and government factors

designed to protect the rights of employees and customers, as well as preserve the environment.

Failure to comply with legal and government regulations can result in…

a business receiving fines, damaging their reputation or losing their right to operate.

Types of legal and government regulations

Laws relating to establishing a business, industry regulations, employment laws, work health and safety (OH&S) laws, taxation laws, trading laws and environmental protection laws.

Laws relating to establishing a business

registering a business name, getting an ABN, zoning, building and signage regulations, licenses and permits (depending on business operations)

Industry regulations

employees may need certain qualifications

Employment laws

Obligations between employers and employees, protection of employee rights

Work health and safety (OH&S) Laws

Business owners must plan to meet requirements of OH&S laws applicable to their business

Taxation laws

apply to all businesses in Australia, obtaining an ABN, applying for a tax file number from the ATO

ABN

Australian business number

ATO

Australian taxation office

Trading laws

consumer entitlements and product safety

Environmental protection laws

minimise environmental harm

Values and beliefs

shared principles and morals of a group of people or society.

Trend

A general direction in which people’s attitudes or behaviour in society is developing and changing.

Societal attitudes and behaviours

the ideas, values and beliefs held by people in a particular society

Tends vs Values and Beliefs vs societal attitudes and behaviours

Values and beliefs align with trends to form societal attitudes and behaviours

economic conditions

set of influences that relate to economic activity, including interest rates, wages, unemployment, exchange rates and inflation

Interest rate

the price charged or paid for the use of money, i.e. the cost of borrowing.

Tax rate

the percentage of income or value of a good, service or asset paid as tax

Progressive tax system

the more you earn, the more you pay - Australia’s tax system

Recessionary cycle

when the economy is contracting and people spend less

Boom cycle

where the economy is expanding and people spend more

Technological considerations

relate to the growing use of tools, techniques or systems by businesses to solve problems or serve a purpose in operations.

Technological change has lead to…

decrease in number of employees required by a company, an increase in the amount of time and money spent on research and development, and opening up new markets

Overseas market

the wider market that exists outside of your business’ home country

Overseas competitors

Companies that are a threat to your business that exist overseas

Exchange rate

the difference between the value of each country’s currency

Offshoring labour

employing workers that are based overseas for your business.

Online sales

Trades that occur over the internet

Patent

a right granted for any device, substance, method, or process that is new, inventive and useful

Copyright

Free and automatic protection of original works, such as writing, music, art, films, sound recording, broadcasts and computer programs.

Describe

Definition, characteristics/key features of the topic

Explain

Detailed, definition, cause and effect and example

Distinguish

Define both terms and difference(s) between them, with examples

Corporate social responsibility (CSR)

going above and beyond what is expected when it comes to environmental and social preservation.

Factors of the operating environment

Customers, competitors, suppliers, and special interest groups

Special interest group

a group of people who may have concerns about a particular product or business

Types of special interest groups

environmental lobby groups, business associations and unions

5 factors of the internal environment

Employees, structure of business, production of goods and services, capital/labour resources, and sources of finance.

The 3 business environments

Macro, operating and internal

Internal environment

A.k.a micro environment. Environment within the business in which the business owner has full control.