VCE BUSINESS UNIT 2 REVISION

Role of an accountant

Accountants can help a business to complete their paperwork. Important financial records such as income statements and balance sheets need to be accurate. Accountants will audit your books and prepare reports for tax purposes.

The role of financial advisors

A financial advisor is someone you pay to help your business to reach specific goals. Their job is to help you to outline strategies and timelines to help achieve profitability. You are paying for their expertise, which is important to do when you have so many decisions to make as a business owner. This is especially useful in the first few months of your business. Financial advisors can assist you in deciding if investing in machinery will help to make more of a profit, or if your business should take a loan out to purchase another factory. They will help your business to become more efficient by focusing on actions that will get results

The role of ICT advisors

This could be consultants who help to set up business intranets, phone systems and software to help run the business. It’s really important to get the systems set up from the first day of business. ICT advisors can assist with troubleshooting and can even train staff in how to use these systems.

The role of legal advisors

legal advisor is a lawyer who works internally for a business giving them advice on legal matters. If a business doesn’t have an internal legal advisor, they can seek legal advice from many different places external to the business.

The role of marketing advisors

A marketing advisor is someone who specialises in analysing the marketing strategies that a business is using and coming up with better ones.

A marketing advisor can help to design new marketing campaigns which will get maximum exposure. They can help a business build brand awareness. This can lead to increased sales and therefore increased profits.

Legal requirements

When starting a business, the owners must be aware of the things they are required by law to do. There are many licenses that need to be applied for, laws that need to be observed, permits to be obtained, and approvals that need to be sought. If a business doesn’t follow these legal requirements, they risk being fined, damaging their reputation, losing their business or in some cases jail time for owners or employees.

Registering the business name

If you want to protect your name from being used by any other business, you must register the name with the Australian Securities and Investments Commission (ASIC). The owner of the business should do a search to see if the name is taken.

register a domain name

A domain name is simply the internet address of your business.

Even if your business is not ready to launch, you can register for a domain name early. You can do this by searching to see if your domain name is available and then registering through an accredited registrar or reseller such as GoDaddy.

Laws that need to be followed when trading

• zoning (protects residential homes from businesses infringing their rights)

• waste disposal - businesses will be required to dispose of waste legally

• protection of consumer rights – the Australian Competition and Consumer Commission (ACCC) ensures fair competition in areas such as advertising and faulty goods

Tax obligations

Both the Federal and State governments impose taxes on businesses, and it is vital that a business is aware of all their obligations.

Obligations could include:

• Ensuring they have a tax file number

• Paying tax on their income • Collecting income tax on behalf of the ATO (Australian Tax Office) from their employees

• Collecting a goods and services tax (GST) from consumers for the ATO if the business earns over $75 000

• Collating and submitting a business activity statement (BAS) periodically to the ATO, which reports on the income earned, taxes due, GST collected and income tax withheld

Safety

business must follow the Occupational Health and Safety Act 2004 (Vic). This law sets out all the responsibilities a business has in keeping their workers safe including their physical safety, their health and mental wellbeing. This law also covers the conduct of the business in relation to the safety of the public.

WorkSafe Victoria is a government agency who was set up to oversee the implementation of Victoria’s OHS laws. WorkSafe inspectors can visit any worksite and fine businesses for breaches. All businesses in Victoria must pay for WorkCover Insurance. This compulsory insurance provides injured workers with support if they are injured at work.

Why are bank accounts so important for a business?

In order to keep accurate records for a business, the owner must set up a separate bank account. Imagine a situation where your personal banking is mixed with your business banking. This could lead to real problems identifying what money belongs to the business and what money belongs to the owner. This will simplify record keeping for the business. A business should follow the accounting principle of the entity concept, which states that personal and business transactions should be kept separate.

The importance of establishing financial control systems

A financial control system is all the processes a business will follow around their finances. This is important to a new business because establishing these properly right from the start will help ensure the business always has control of its finances. The method they choose must track all expenses, and record all receipts and payments, in order to prepare reports for various stakeholders and safeguard against problems. A business can create their own systems as long as they are logical. In order to control their finances, a business could have systems set up in the following areas: • When is cash banked? • What are your credit terms? • How do you keep track of money owed and what happens when a customer doesn’t pay? • Should you give a discount for early payment?

The importance of establishing record-keeping strategies

A record-keeping strategy is just what it sounds like. A business MUST keep accurate records. There are hundreds of commercial options that a business can use to store their records, or a business can create their own. If a business is a Public Listed Company, there are certain legal obligations in the way they must keep these records. Each business should ensure that records are kept in a way that makes it simple for the business to accurately use this information. For example, the ATO requires the business to keep a record of all their financial transactions for tax purposes. Documentation needs to be stored appropriately. Software such as Xero and QuickBooks can help. Some firms may hire a bookkeeper to keep records for them

Source documents must be kept • Cash books recorded • Income statements prepared • Balance sheets produced

Supplier

an organisation who provides your business with various goods and services that you will need in order to operate. may include raw materials, services or finished goods. 

procurement

act of sourcing the most appropriate supplier, negotiating terms and contracts, tracking when supplies are received and maintaining records. 

Price and quality of supplies 

in order to maintain probability, you may choose lower cost supplies overseas. transport and fluncuating edxtrabge rate costs should be considered. suppies still need to be good quality and meet australian standards.. poor quaility can end up costing business in terms of reputation and extra costs fixing mistakes. 

just-in-time

a management strategy where supplies are delivered to a business just as they are needed

considering reliability of supplier and their location

they can supply materials when and where you need them. the supplier must be able to get stock to your organisation in a timely manner. chosing a local supplier could cost more, but there is less distance to travel and a greater chance of the goods arriving on time. 

suppliers and CSR

when choosing a supplier there needs to be a balance between making a profit and how your choice of supplier may affect society and the environment. improves rep of business and ability to attract staff . limitation may include higher cost 

policy

a formal set of guidelines onna topic that must be followed by all employees. (rules to follow)

Prodecure

a series of steps that are put in place to enact a policy. they should be clearly laid out for all employees to read (step-by-step instruction to follow rules)

Why should a business keep up with new technology? Why

Changing technology could include an invention, innovation or development in a process that improves the efficiency and effectiveness of a business. Once a business is established it must ensure that it continues to respond to new technology in various areas. A business that is easily able to adapt to changing technology could have a greater chance of sustaining its success.

Why should a business consider global issues when planning

Global issues are all matters that take place overseas that could potentially impact a business in Australia. A business must ensure that they are continually aware of what their competitors overseas are doing. The world is increasingly connected and those organisations who are able keep abreast of global issues are more like to be successful in Australia, and beyond.

customer database

an organised collection of customer details.

It will show things like the names of customers, their addresses, email, product purchases, preferred brands, time they like to shop etc. Businesses must take advantage of any new technology that can help collect customer information. eg) loyalty cards

contacts with overseas suplliers

A business should ensure they explore all opportunities. One such opportunity could be by looking at the option of overseas suppliers. As already discussed in this outcome, the potential for cheaper supplies could be very advantageous for a business starting out. There is also the chance that materials available overseas, may not be available in Australia, which could give you a competitive advantage. With ever -improving technology, communication overseas has become significantly easier. There is now no need to travel overseas to secure suppliers with the introduction of products such as Zoom and Google Meet. However, as already discussed, a business must be aware of other costs such as fluctuating exchange rates and transport costs when purchasing overseas. They should also be aware of suppliers being socially responsible.

why should a local business become an exporter

If a business is to truly explore all options for expansion, they may consider exporting their goods to other countries. As barriers to trade have been reduced in many countries, this has often increased the global demand for our products, hence the demand from overseas retailers for our products. It is important for a business to consider the local market for any goods exported. They may have to adjust their packaging, their marketing or even their product to adapt to laws and customs that exist in other countries. For example, if an Australian company decided to manufacture cars in Australia and export to the USA. They would need to adapt the cars to drive on the right-hand side of the road. The obvious benefits are the increased number of potential customers. However, the drawbacks could include the initial expense to research and develop the product to suit an overseas market.

Marketing

The activity or business of promoting and selling goods and services, including market research, pricing, promotion and distribution.

Customer base

The group of customers who regularly purchase goods and services from a business.

Marketing, a customer base and business objectives

For a business to reach its objectives, it needs to develop an effective marketing strategy. A successful strategy involves market research, and the identification of a specific target market that the product will appeal to. Once the target audience has been identified, appropriate pricing, advertising and distribution will ensure that the good or service is affordable (compared to the competition), promoted to potential customers, and available for purchase through assessable channels. Effective marketing strategies will ensure that customers are attracted to, and purchase, the good or service. This will intern assistance in the achievement of business objectives.

Internal environment

Factors which the business has control over. Including owners and managers, employees and corporate culture.

The internal environment of a business consists of factors which it has control over. Owners and managers have considerable impact on marketing strategies.

Employees

Employees play a pivotal role in the implementation of marketing strategies due to their regular contact with customers.

Corporate culture

The shared values and beliefs of individuals within a business

External environment

A group of factors outside of a business. The organisation has some control over operating, and no control over other macro factors.

Operating factors

Factors which the business has some, or limited, control over. These include customers, suppliers and competitors.

external environment

consists of operating and macro factors. Businesses have some control over operating factors including customers, suppliers and competitors.

Customers

Customers can be impacted by the experiences they have when interacting with a business. This includes the product, and the customer service they receive.

Supplier

A person or business that provides goods and/or services.

Through supplying high quality materials or products, suppliers can contribute to developing a strong brand, and aid in growing a customer base.

Competitors

Businesses must remain aware of not only the product offering of their competitors but also the strategy in which they market their goods and services.

Operating factors affecting marketing

The operating factors consist of variables that a business has some control over. These include customers, suppliers and competitors. The experience that customers receive is impacted by the product they receive, and the customer service that the business provides. The quality and price of the goods and services provided by suppliers is a key component of developing the marketing strategy of a business. Promoting unique features of a businesses offering, compared to those who sell a similar product (competitors), is key in developing a brand identity.

Macro factors

Factors which the business has no control over. They may be impacted by economic, technological, legal and social factors, and can only react to each force.

Macro factors are forces that a business has no control over. Economic, technological, legal and social factors influence a business, pressuring them to adjust their marketing strategies.

Economic factors

The economy is constantly changing. When the economy is strong, a business can take advantage of favourable conditions. When the economy is not performing as well, strategies may need to be altered accordingly.

Technological factors

Customers are attracted to innovation. Arguably, customers are most attracted to technological developments that offer new features and convenience. Business can embrace technological progress, but not control it.

Legal factors

Businesses can never be above the law. They must comply with all legal requirements and will be held accountable if they fail to do so.

Social factors

Increasingly, consumers are aware of various social factors including a business’s treatment of people, its contribution to the community, and its impact on the environment.

Developing contacts overseas - suppliers

Potential for cheaper supplies could be very advantageous for a business starting out. There is also the chance that materials available overseas, may not be available in Australia, which could give you a competitive advantage.

Contact with overseas retailers

Barriers to trade have been reduced in many countries, this has often increased the global demand for our products, hence the demand from overseas retailers for our products.

It is important for a business to consider the local market for any goods exported. They may have to adjust their packaging, their marketing or even their product to adapt to laws and customs that exist in other countries.

Market dimensions

the size of the market in which a business intends to sell its goods or services

allows a business to understand the market size, and number of potential customers that wish to purchase a similar type of product.  

Market segmentation 

the process of dividing an entire market into specific groups that share common characteristics. 

focuses on their product and marketing strategy, on customers most likely to be attracted to their goods or services. 

product 7p

a good or service that is desired and sold to customers

the good or service that is marketed and sold to customers. It requires considered design including the product itself, packaging and associated branding.

tangible products

can be held and stored by the customer

intangible products

services are generally intangible, they cannot be handled or stored.

price  7p

the set amount of money a customer pays for a product 

pricing a g/s correctly is crucial in attracting the attention of customers. the promoted price needs to emphasise value for money over competitors. 

Businesses employ pricing strategies in order to determine how much to charge for each unit, good or service.

place 7p

the method a business uses to sell and distribute its product.

Businesses must develop distribution channels as part of their marketing strategy, including where customers can access their products.

Distribution channels are developed to ensure the accessibility of the products for consumers. This may involve either a retailer, wholesaler, or both.

retailer

a business that sells goods on behalf of the producer

wholesaler

a business that sells goods, in larger quantities to retailers.

Promotion 7p

The way in which a business publicises their product to their target market.

Product promotion is comprised of advertising via selected mediums, sales and promotions, loyalty programs and engagement with potential and existing customers.

Promoting a product is not limited to advertising but requires a considered approach to publishing the benefits of a product, including its competitive advantages.

corporate culture

the shared values and beliefs of individuals within a business 

people 7P

any individual who interacts with a business and its products, including managers, employees and customers all assist in shaping its repuation. 

marketing is reliant on positive experiences and feedback 

physical evidence 7p

the presentation of physical locations or digital spaces.

customers are attracted to appropriate, professional and welcoming environments.  Creates a brand image to support the g/s offered by the business

process 7P

policies and procedures implemented to support the purchasing experience.

includes how customer accesses product information, the options included for purchase and support provided. 

list the 7ps

1- product

2- place

3- price

4- people 

5- processes

6- physical evidence 

7- promotion 

Product life cycle

The phases a product experiences during its existence, including introduction, growth, maturity, decline and extension. From the time it enters the market until its demand diminishes, and it exits the market.

Growth PLC

The growth stage will see a significant increase in sales, and therefore market share for the business. The product is further developed, and the customer base continues to grow. Growth is when the product experiences its greatest sales growth. The good or service becomes established within the market and attracts growing popularity.

Maturity PLC

In order to remain relevant, businesses continue to refine their product and market the advantages their good or service offers. The rate of sales growth is likely to slow.

Maturity requires a business to refine its product offering, as they compete for market share. Sales growth begins to slow.

Introduction PLC

Introduction is when a product first enters the market. Customers are exposed to the good or service for the first time. Sales tend to be lower to begin with.

Decline PLC

Decline occurs when a product is either superseded by competitors, or market demand for that item is either reducing, or no longer exists.

Extension PLC

To prolong the life of a product, a business may opt to extend its life, updating the good or service, or expanding into a new market.

list 5 product life cycle

1- introduction

2- growth

3- maturity 

4- decline

5- extension 

Customer relations

The connection developed between a business and its customers.

Customer service

The delivery of assistance and support from a business and its employees towards customers.

Customer relations strategies CRS

Customer relations, including providing quality customer service and access to customer loyalty programs, are essential complimentary marketing tools.

Quality customer service ensures that customers experience a positive purchasing encounter. This including while seeking information prior to purchase, while buying the good or service, and the after sales assistance.

Customer loyalty programs, while expensive to operate, create a sense of loyalty among consumers. This is particularly important in competitive markets where customers have significant choice.

Social media CRS

Social media is a dynamic and interactive method of communicating with current and prospective customers. Businesses can have several active accounts across a range of platforms.

Social media provides an opportunity for a business to connect with consumers, including the chance to highlight key product features and provide a means of communication.

Email marketing CRS

Email marketing provides significant reach for businesses. They can contact customers in a professional manner, whilst communicating a consistent message, instantly.

Email marketing allows a business to communicate with customers in a professional manner. Emails can contain significant detail, including product features, upcoming promotions, and contact details.

email - An electronic means in which to communicate with one or more recipients.

Search engine optimisation CRS

Search engine optimisation is designed to increase exposure to a website for potential customers. This includes manipulating content within the website to match with online searches.

Search engine optimisation aims to maximise the number of visitors to a website. The objective is to have search engines rank the website as high as possible.

Artificial intelligence CRS

Artificial intelligence is increasingly being used to personalise the customer experience, including targeting promotional communication, curating content, and providing real-time customer service.

Data analytics CRS

Data analytics allows a business to identify trends from past performance and develop strategies to maintain or improve performance in the future.

Management of data CRS

The collection is the first step in having valuable information to analyse. It then needs to be sorted and stored, ensuing that valuable business and customer information is protected.

list all 6 CRS customer relation strategies

1- social media

2- email marketing

3- search engine optimisation

4- ai 

5- data analytics

6- management of data 

Publics

stakeholders, either individuals or groups that are impacted by the operations of a business.

Public relations PR

When a business communicates a pre-determined message to stakeholders, the purpose of which is to create a positive image 

pr is the messages curated by the business about their products and brand, designed to shine a positive light on the business. leads to an achievement of business objectives

Planned pr

A planned public relations campaign is developed to deliberately create a positive image of a brand and the products it sells. a business has control over the message it wishes to portray in this way. 

crisis pr

the message a business is forced to create as a result of a negative event. the situation may be due to the actions of the business or as a result of an external force.

business response to an event that has the potential to negatively impact its reputation 

maintaining a positive relationship with the customer base 

reinforces the consumers choice of a product, and the image of the business selling the g/s 

businesses that generate positive relationships continue to have their business promoted through world-of-mouth acting as a key component of the marketing strategy. 

implications if positive customer relationship is not maintained

failing to maintain positive relationships can alienate consumers, leading them to consider products sold by competitors. 

can lead to a decrease in vital key performance indicators, including the number of sales, revenue, market share and net profit. 

CSR in marketing

considerations a business makes above and beyond what is required by law. When a business practices CSR, they can market these credentials to their current and potential customers.

Green marketing

the practice of promoting the environment value and benefit of a product or practice. falsely claiming to undertake green initiatives can be very damaging 

Protecting customer privacy

Businesses are using customer data to inform their decisions and future marketing strategies. with this information comes a responsibility to store and protect it, including personal information and banking details. 

recruitment

the process of attracting a pool of qualified job applicants from which to select the most appropriate person for a specific job. activities carried out by a business owner HR manager focused on advertising postions and encouraging the right people to apply.

can be carried out internally and externally 

A business owner or HR Manager should consider the needs of the business, available resources (time, money), and its existing workforce before deciding which recruitment method is suitable.

internal requiment methods-

intranet 

word of mouth

posters

External recruitment

attracting new people from outside the business 

• websites, social media, online requirement agency 

selection methods

a process including interviewing, testing, checking refernces and offers. the aim is to narrow down a pool of aplicants for a job to detrmine the best candidates. 

• screening/short listinng

• interview

• testing

• refrence check 

• offer

• online selection

types of employment

• full time (ongoing contract)

• part time (ongoing contract)

• fixed-term 

• causal 

employee entitlements

employees in aus, depending on their employment arrangements, are legally entitled to a set of minimum employment conditions. 

known as the national employment standards. 

minimum employment conditions

the national employment standards (NES) are 11 minimum emplyoment entitlements legislated by the fair work commision that have to be provided to all time and part time emplyoees, perment or fixed term. 

fair work commission

Australias national workplace relations tribunal which creates workplace relations laws which govern employers and employees, investigates breaches of these laws and enforces the laws to ensure legal obligations are met. 

11 minimum entiletments under the NES

1- maximun weekly hours

2- requests for flexible working aggrangemnts 

3- offers and requests to convert from causal to permnaate employment 

4- parent leave related entitlements 

5- annual leave 

6- persona/carer’s leave, compassionate leave and family and domestic violence leave 

7- community service leave 

8- long service leave 

9- public holiday enetiltments 

10- notice of termination and redundacny pay 

11- fair wokr infromation statements (FWIS) and causal employment information statment (CEIS)

National employment standards

• maximum weekly hours - 38 hours for a full time employee

• flexible working arrangements 

• offers/requests to convert from casual to permanent employment 

ADD AFTER HOW LONG????

• annual leave

Employer expectations

productivity, performance, loyalty, commitment, on time, working cohesively with others, notice for reginistion/retirement