Business Planning and Nature of Business Revision

Vocabulary flashcards covering business planning, small to medium enterprises, legal structures, influences, establishment options, and business performance evaluation.

Small to Medium Enterprises (SMEs)

Businesses with a relatively small scale in terms of employees, revenue, and assets, making up around 97% of all Australian businesses and employing approximately over 40% of the workforce.

Small Business

A business classification defined in Australia as having 1–19 employees (or usually fewer than 20 employees), where the owner manages daily operations.

Medium Business

A business classification defined in Australia as having 20–199 employees (or 20–200 employees), characterized by more specialized management.

Large Business

A business classification employing over 200 people, featuring a complex structure and large market share.

Primary Industry

Industry sector focused on extracting natural resources, such as farming and mining.

Secondary Industry

Industry sector focused on manufacturing products, such as construction and factories.

Tertiary Industry

Industry sector focused on providing services, such as retail and banking.

Quaternary Industry

Knowledge and technology-based industry sector, such as IT and research.

Sole Trader

A business legal structure where the business is owned and controlled by one person.

Partnership

A business legal structure owned by two or more people who share profits and responsibilities.

Private Company

A company structure owned by private shareholders where shares are not sold to the public.

Public Company

A company structure that sells shares to the general public through the stock exchange.

Government Enterprise

A business structure owned and operated by the government to provide public services.

Corporate Social Responsibility (CSR)

The expectation that businesses should act ethically and consider environmental and social impacts.

Personal Qualities

The individual characteristics and attributes—including qualifications, skills, motivation, entrepreneurship, cultural background, and gender—that influence a person's ability to start or run a business.

Sources of Information

Channels used by entrepreneurs to gather knowledge for business decisions, including market research, government statistics (e.g. ABS in Australia), industry reports, online research, and mentors.

Direct Competitors

Businesses that offer identical or very similar products or services in the same market.

Indirect Competitors

Businesses that offer substitute products or services that meet the same customer need.

New Business (Start-up)

An establishment option created from scratch with original ideas, providing full control and autonomy but presenting high risk, uncertainty, and potential slow initial growth.

Existing Business (Purchase)

An establishment option where an operating business is purchased with existing customers, systems, and cash flow, though carrying risk of hidden debts or poor reputation.

Franchise

An establishment option involving buying the rights to operate under an established brand name, gaining a proven business model and support but paying ongoing fees and having less independence.

Sources of Finance

The origins of funds needed to start and operate a business, including personal savings, bank loans, investors, government grants, or crowdfunding.

Cost of Finance

The expense associated with obtaining and using capital, including loan interest, repayment obligations, and investor returns such as dividends or equity share.

Zoning Laws

Local government rules specifying where specific types of businesses are permitted to operate (e.g., residential vs. commercial areas).

Health and Safety Regulations

Legal requirements enacted to protect workers and consumers, including food handling standards and workplace safety laws.

Situational Analysis

A thorough review of a business's current internal strengths and weaknesses, alongside external opportunities and threats.

Vision

A statement outlining the broad, long-term purpose or desired future state of a business.

Business Goals

Specific targets that a business sets to achieve its overall vision.

Organising Resources

The allocation of inputs across core key functions: operations, marketing, finance, and human resources.

Break-even Analysis

A financial forecasting calculation that determines the exact point where total revenue equals total costs.

Cash Flow Projections

Financial forecasts detailing expected incoming and outgoing cash over a specific period.

Monitoring and Evaluation

The process of tracking business performance against targets by assessing sales, budgets, and profit to determine necessary operational adjustments.

Taking Corrective Action

Implementing changes—such as removing low-selling menu items to cut input costs—to rectify issues and improve profitability.

Trend Analysis

The process of evaluating historical patterns in data to anticipate future market shifts and business outcomes.

Competitive Advantage

Creating and sustaining a unique edge over competitors through factors like price advantages, branding, quality, or superior customer service.

External Influences

Factors outside a firm's control that impact operations, including economic, financial, geographic, social, legal, political, institutional, technological, competitive, and market conditions.

Internal Influences

Factors within a business's control that affect performance, including products, location, resources, management, and business culture.

Stakeholders

Individuals or entities with a vested interest in a business's activities and outcomes, such as owners, employees, and customers.

Voluntary Cessation

The decision by business owners to intentionally close operations, commonly due to retirement or low profitability.

Involuntary Cessation

The forced closure of a business caused by an inability to pay outstanding debts.

Liquidation

The legal process of selling off a business's assets to settle debts upon closure.