Business Management Unit 2 Sac 1

Legal and Government regulations

Licenses, permits, approvals and authorities to take into account (must fulfill legally to avoid consequences)

Business Name Registeration

Businesses need to register with ASIC and must have an ABN.

Registering a Domain Name

The address of a website on the internet

Taxation compliance

ATO—the government body in charge of administering and collecting tax for the fed gov

Income Tax, Other fed + state tax:

• PAYG

• GST

• FBT

• Stamp duty

• Land Tax

• Business Activity Statement

What is PAYG?

Pay-as-you-go tax. When your business and investment income reaches a certain amount, you'll pay your income tax in instalment

What is GST?

Goods and Service Tax, a broad-based tax of 10 per cent on the supply of most goods and services consumed in Australia

What is FBT?

Fringe Benefits Tax—a tax that employers pay on benefits paid to an employee in addition to their salary or wages.

What is Stamp Duty?

Tax that state and territory governments charge for certain documents and transactions

What is Land Tax?

Land tax is an annual tax that land owners pay to state and territory governments.

What is a Business Activity Statement? (BAS)

Records of a business’s claims for input tax credits and accounts for GST payable

Local Government Legal Requirements

Zoning regulations + Health services

Zoning regulations

Ensures businesses do not on residential areas

Health Services

Businesses must comply with health regulations under the Food Act 1984

Trade Practices Legislation

• Work Health and safety regulations

• Worksafe Insurance (workover)

• Consumer protection and fair competition

• Consumer Law

• Consumer Guarantees

Work Health and safety regulations

Businesses = responsible for implementing health + safety practices following: Work Health and Safety Act 2011 (cwlth), Occupational Health and Safety Act 2004 (Vic)

WorkSafe Insurance

WorkSafe is a gov agency that aims to reduce workplace injuries + support injured workers

Consumer Protection and fair competition

Fed + state laws to protect against unfair trading practices

Code of Conduct

A written set of guidelines to help businesses achieve achieve the set of standards by the gov

Competition and Consumer Act 2010 (cwlth)

Administered by the Australian competition and Consumer commission (ACCC)

Australian consumer law + fair trading act 2012 (Vic)

Administered by the consumer affairs, Victoria

Anti-competitive practices

The Competition and Consumer Act prohibits or places strict conditions on:

Misleading + deceptive conduct, unconscionable conduct, unfair contract returns, bait advertising etc.

Examples of lawful sale practices

Layby agreements, ‘proof of transaction’ and itemized bills and unsolicited consumer agreements.

Consumer Guarantees

Sets out protection for consumers who buy goods +services from businesses

External Professionals when establishing a business

• Freelancers

• Bookkeepers

• Recruiters

• Sales Professionals

• Marketing consultants

• Information Technology (IT) Technicians

Freelancers

Independent workers who charge businesses or individuals for work on a per job bases

Bookkeepers

Keeping + processing a businesses financial records

Recruiters

HR + recruitment professionals are often used by business to find the right staff

Sales Professionals

Trained + experienced in finding and persuading people to consume a product

Marketing Consultants

Responsible for raising awareness of a business’s products and brand within their target markets

IT Technicians

Support businesses with everything from server setup and software to troubleshooting

Establishing separate Bank Accounts

Separate entity, keeping account separate = easier to monitor financial performance = easier to calculate business expenses

Factors to consider when choosing the right bank account

• Bank fees

• Interest rates

• Overdraft facility

• Credit cards

• Convince + support

Bank Fees

Hidden or not obvious fees

Interest Rates

How much a Business will earn on the money in account

Overdraft Facility

Businesses are able to withdraw more money then they have available

Credit Cards

Credit Cards have different features, max limit and interest on unpaid balance

Convenience + Support

Some banks offer more practical ways of banking. Some can lack infrastructure

Establishing financial Control System

The processes, methods and tools that allow a Business to manage + monitor its financial performance

Budgeting

Estimating the businesses financial performance for a period of time

Cash-flow management

Money being transferred into and going out of the business

Control of accounts receivable

The outstanding payments of a business is owed by its customers

Inventory Control

Ensures that costs are minimised and that the business has access to the amounts of resources needed when required

Auditing

testing + evaluating a business’s accounting processes and internal control

Establishing record keeping strategies

Maintaining accurate records is not only an obligation but an invaluable tool for decision making

Source Documents

Written documents that provide evidence of a financial transaction

Cash Book

Summary of a businesses cash receipts and cash payments compiled from receipt + payment source documents

Income Statement

Used to help a Business calculate how much profit it has made over a period of time

Balance Sheet

Shows a business’s assets and liabilities at a point in time

Other record-keeping strategies

• Bookkeeping software

• MYOB

• Hire a bookkeeper

• Be organized

• Good filing

• Seek assistance when needed

Factors when choosing appropriate suppliers

• Procurement

• Price

• Quality

• Reliability

• Proximity

• Corporate Social Responsibility (CSR)

Procurement

Researching + selecting suppliers, establishing payment terms, negotiating contracts + the purchasing of resources that are vital for maintaining the production of the businesses goods or services

Price

Price of raw materials/goods should be a factor (Ensure affordable + profitable )

Quality

The quality offered by the supplier needs to be considered (business’s personal standard)

Reliability

Need to rely on suppliers to deliver supplies quick + timely

Proximity

How close suppliers to the business (e.g: How long to restock)

Corporate Social Responsibility

What are the suppliers practices and how will this reflect back on the business’s repuation

Considerations for CSR Suppliers

Financial/economic/social enviroment

Policy

A written set of broad guidelines to be followed by all employees

Procedures

A series of actions that enable a policy to be put into action

Types of Policies

Recruitment, Occupational Health + Safety, Privacy, anti-discrimination, equal opportunity, dispute resolution etc

Ensuring the business complies with legal requirements + establish routines

Identify issue —> Research + analyse business environment —> Consult stakeholders —> Develop a draft review —> Revise Policy —> Approve and distribute new policy —> Monitor + evaluate policy

Technology

Advances in Technology can be a curse + blessing (struggle to keep up to date but extremely convenient)

Technology in marketing

Social media advertising can have good results

Technology in manufacturing

3D printers + robotics (increase efficiency)

Technology in Administration

Smartphones applications and web-based software

Remote Work

Technology has made it possible for flexible work options

Establishing customer databases

Bank of info on existing + potential customers, involving contact info, previous buying + preferences

Global Issues

The globalisation phenomenon has presented many opportunities as well as problems

Overseas suppliers and Resources

Businesses may develop contacts with overseas suppliers —> access to a range of affordable raw materials + finished products

Customers and Overseas retailers

Businesses may decide to develop contacts with overseas retailers and become exporters (local business that manufactures goods for overseas customers)

Benefits of Customers and Overseas retailers

• Trade barrier reductions have provided cheaper access to international markets

• Chinese growth has seen greater demand for Australian commodities