VCE Business Management Unit 2: Establishing a Business

Vocabulary practice flashcards covering key terms and definitions for VCE Business Management Unit 2 across Area of Study (AOS) 1, 2, and 3.

Sole Trader and Partnership Liability

Business structures where owners face unlimited liability, meaning they are personally responsible for all business debts.

Company

A separate legal entity that provides limited liability to its shareholders, but incurs higher set-up and compliance costs such as ASIC reporting.

Partnership

A business structure offering shared skills, capital, and workload, but carrying the risks of unlimited joint liability and possible owner disputes.

Business Name Registration

Registration with ASIC that permits an entity to trade under a specified name, though it does not provide exclusive legal ownership of that name.

Trademark

A legally registered protection administered by IP Australia that protects brand identifiers from being used by other businesses.

Australian Business Number (ABN)

An $11$-digit unique business identifier used for tax and official trading operations.

Goods and Services Tax (GST) Registration

A mandatory tax registration for businesses with a turnover of at least $75,000$, requiring them to collect a $10\%$ tax on most sales.

Public Liability Insurance

An insurance policy that covers legal and financial claims resulting from injury or damage to customers or members of the public.

WorkCover

Compulsory insurance for most Victorian employers that provides financial protection and compensation for employees injured in the workplace.

Superannuation Guarantee

A mandatory employer contribution to an employee's retirement fund, currently set at $12\%$.

Financial Record-Keeping

The legal requirement to retain accurate business financial documentation (generally for five years) to monitor performance and support BAS, tax returns, and audits.

Cash Flow

The movement of money into and out of a business; running out of cash to settle debts and bills when due can cause an otherwise profitable business to fail.

Debt Finance

Borrowed funds from an external source (such as bank loans or overdrafts) that must be repaid with interest, retaining full ownership while creating regular repayment obligations.

Equity Finance

Capital contributed by business owners or external investors who receive an ownership share, which avoids regular repayments but dilutes business control.

Copyright

Automatic legal protection granted to original creative material such as written texts, music, and artwork.

Patent

A registered form of intellectual property that protects a newly invented device, method, or process and requires a formal application.

Australian Consumer Law

Legislation enforced by the ACCC and Consumer Affairs Victoria to protect consumers against misleading conduct and faulty products.

Fixed Costs

Operating expenses that do not fluctuate with output volume, such as rent and insurance.

Variable Costs

Operating expenses that rise or fall in direct proportion to the volume of output produced, such as raw materials and packaging.

Marketing

The business process of identifying, anticipating, and satisfying customer needs profitably.

Marketing Objectives

Specific, measurable, and time-bound goals established for marketing activities, such as increasing sales by $10\%$ in $12$ months.

Primary Market Research

First-hand data collection undertaken directly for a specific purpose using methods such as surveys, interviews, and focus groups.

Secondary Market Research

Pre-existing data gathered by outside sources (such as ABS statistics and industry reports) that is less expensive but may be outdated.

Qualitative Data

Non-numerical research data describing consumer opinions, attitudes, and reasons to explain why people behave in certain ways.

Quantitative Data

Measurable, numerical market research data that indicates how many or how much.

Market Segmentation

The process of dividing a broad consumer market into distinct sub-groups using demographic, geographic, psychographic, or behavioural bases.

Target Market

The specific market segment with shared characteristics that a business selects and focuses its marketing efforts upon.

7 Ps of Marketing

The extended marketing mix elements consisting of product, price, place, promotion, people, processes, and physical evidence.

Product Differentiation

The strategy of establishing distinguishing features—such as superior quality, design, service, or branding—to give customers a reason to choose a product over competitors.

Unique Selling Proposition (USP)

A distinctive product characteristic or benefit that allows a business to compete effectively without relying strictly on price competition.

Penetration Pricing

A pricing strategy in which an initially low price is set to rapidly secure market share.

Price Skimming

A pricing tactic that charges an initially high price to early adopters before gradually reducing the price over time.

Promotion Mix

The combination of promotional techniques used by a business, including advertising, sales promotion, personal selling, and public relations or social media.

Place (Distribution)

The distribution channels utilized to deliver products to consumers, including direct channels (providing control) and indirect channels (utilizing retailers or wholesalers for wider reach).

Recruitment

The staffing activity focused on finding and attracting a pool of qualified applicants for an open position.

Selection

The process of evaluating applicants through shortlisting, interviews, and reference checks to choose the best candidate and finalize an employment contract.

Job Description

A written statement resulting from job analysis that outlines the tasks, duties, and responsibilities associated with a specific role.

Job Specification

A detailed profile outlining the skills, educational qualifications, and professional experience required of a person performing a role.

Internal Recruitment

The practice of filling vacancies using current employees, which lowers hiring costs and motivates personnel but limits the talent pool.

External Recruitment

The practice of seeking candidates from outside the business, which brings in fresh perspectives and a wider candidate pool but is slower and more expensive.

Induction

A planned program that introduces new staff members to the organization, workplace policies, safety protocols, and colleagues to ensure safe and quick integration.

Casual Employment

An employment arrangement that offers no guaranteed hours of work or paid leave entitlements, compensated by an additional hourly pay loading.

Modern Award

A legally binding instrument established by the Fair Work Commission that sets minimum wage rates and employment conditions across an entire industry or occupation.

Enterprise Agreement

A workplace agreement negotiated directly between an employer and employees that must ensure workers are better off overall compared to the relevant modern award.

National Employment Standards (NES)

A set of statutory minimum entitlements under the Fair Work Act (such as annual leave, personal/carer's leave, and notice of termination) that cannot be undermined by any contract, award, or agreement.

Workplace Health and Safety (WHS)

Statutory safety standards regulated by WorkSafe Victoria requiring employers to provide safe equipment, premises, and training, while employees must follow safety protocols and exercise reasonable care.

Termination of Employment

The end of an employment relationship occurring via resignation (employee initiates departure), dismissal (employer ends employment), or redundancy (the role is no longer required).