Studied by 7 people
Internal Environment
Factors over which the business has some degree of control. It is sometimes called the micro environment.
External Environment
Factors over which the business has little control.
Macro Environment
The broad conditions and trends in the economy and society within which a business operates
Business Environment
The surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.
Operating Environment
The specific outside stakeholders with whom the business interacts in conducting its business; it is sometimes called the task environment.
Incorporated Business
A business that has a separate legal existence apart from its owner(s).
Unincorporated Business
Does not have seperate legal existence from its owner.
Sole Trader
A business owned and operated by one person.
Partnership
An unincorporated business structure with a minimum of 2 and a maximum of 20 owners.
Incorporation
The process that a business goes through to become a registered company and a separate legal entity.
Public Listed Company
An incorporated business with a minimum of one shareholder (and no maximum), and whose shares are openly traded on the Australian Securities Exchange.
Bricks and Mortar
The traditional business model that is based on a store with a physical presence, such as those located on shopping strips and in shopping centres.
Direct to Consumer
Sells directly to customers.
Franchise
When a business sells to others the rights to distribute its goods and use the business name.
Import/Export
Trades goods internationally.
Natural Resources
Items the business uses that come from the natural environment. Examples include land, water and raw materials.
Labour
The people that provide their skills, effort and knowledge to the business.
Capital
The tools and machinery that are used to produce goods or perform services.
Equity
The funds contributed by the owner(s) of a business to start and build the business.
Debt
The funds provided by banks, other financial institutions, government and suppliers, which must be paid back over time with interest.
Bank Overdraft
When a bank allows a business or individual to overdraw their account up to an agreed limit for a specified time to help overcome a temporary cash shortfall (short term).
Bank Bills
The borrower receives a large sum of money and pays the sum and interest back at a later time (short term).
Trade Credit
Supplier provides products to a business with an agreement to recieve payment at a later date (short term).
Loan
A sum of money lent (long term).
Leasing
A way of financing the purchase of assets without a large initial capital outlay (long term).
Government Grants
Can be granted by either federal or state government.
Terms of Finance
The amount of the repayments and frequency at which they must be made.
Business Structure
Size of business can effect oppurtunity for equity capital.
Overall Cost
Businesses must calculate projected costs of each source of finance.
Flexibility
Circumstances can change outside the business’ control.
Level of Control
There can be less control if the business must source finances externally.
Legal and Financial Advice
Before starting a business, the owner can seek advice from solicitors, accountants and bank managers.
Technological Advice
Seeking advice for establishing an online presence.
Community-based services
Businesses can join business service clubs to increase community and local business interconnectedness.
Formal Networks - Private
Business owners can access information and support from professional organisations.
Formal Networks
Business owners can recieve information from federal, state and local governments.
Business Plan
A written statement of the goals and objectives for the business, and the steps to be taken to achieve them.
Corporate Social Responsibility
Managing a business in such a way that the broader social welfare of the community, including its employees, customers, suppliers and the environment, is taken into consideration when making business decisions.
Socially Responsible Policies
For socially responsible practices, a company must implement policies that reflect its commitment.
Accountant
A professional who provides advice on all financial management issues and taxation obligations.
Angel Investors
Individuals or businesses that invest in a new business. They are likely to expect a return on their capital, as well as taking a role in supporting the business owner.
Bootstrapping
Starting a business using personal finance or the revenue from the business.
Boycotting
When a customer refuses to purchase goods or services from a business as a form of protest against the undesirable activities of the business.
Bricks and Clicks
The business model that offers customers the choice of online shopping as well as shopping at the physical store.
Business Entity
An organisation that exists separately to its owner in order to produce and sell goods and services.
Business Model
The way in which the business will run its operations to generate a profit.
Complementary Business
Businesses that sell products which are aimed at the same customers.
Crowdfunding
A method of raising finance through appeals for donations via social media and the internet.
Employee Retention
The ability of a business to keep employees.
Envrironmental Audit
A review of the extent to which a business’s activities have an impact on the environment.
Environmental Management System
A tool for managing a business’s environmental impact in a systematic and methodical manner.
Exports
Goods and services that are produced in Australia to be sold overseas.
Franchise Agreement
An agreement whereby the franchisor grants the franchisee the rights to use its business name and distribute its goods or services.
Franchisee
A business that is licensed to operate under the name of an existing business and distribute its goods or services.
Franchisor
The owner of the original business concept that licenses another business to use its name and distribute its goods or services in exchange for royalty payments and fees.
Goodwill
The monetary value attached to the reputation of a business.
Imports
Goods and services that are produced overseas and sold to Australian consumers.
Lessee
The person or business to whom a lease is granted.
Lessor
The owner of an asset that is leased under an agreement to the lessee.
Limited Liability
When the shareholders of a company cannot be held personally responsible for the debts of the business.
Manufacturing
A business that produces physical goods, often in a factory. These goods are then sold to wholesalers or directly to retailers who then sell the good on to customers at a marked-up price.
Mortgage
A loan on a property, secured by the property of the borrower (the business).
Planning
A process or series of actions to achieve an objective.
Private Limited Company
An incorporated business with a minimum of 1 shareholder and a maximum of 50 non-employee shareholders.
Prospectus
A legal document that provides details about investment in the company.
Resources
The people and objects that are needed for the business to function properly.
Retail
A business that operates by selling goods and services to the customer at a price higher than the cost to produce or purchase the goods in bulk. Examples include Kmart and Target.
Search Engine Optimisation (SEO)
The strategies used to increase the number of visitors to a website by making it more visible on search engines.
Shareholder
The owners of a company who are entitled to a share of its profits.
Silent or Sleeping Partner
One who contributes financially to a business but takes no part in the running of the business.
Solicitor
A professional who provides advice on legal matters such as business formation, registration, contracts and legislation.
Staff Morale
The general level of satisfaction and wellbeing of employees.
Stakeholders
Any group or individual who has an interest in, or is affected by, the activities of a business.
Subcontractor
A person who is not directly employed by the business but has been contracted to perform certain tasks.
Unlimited Liability
When the business owner is personally responsible for all the debts of their business.
Wholesale
A business that sells large volumes of goods to retailers. While wholesalers are increasingly selling direct to the public, they offer heavily discounted prices on bulk purchases such as those made by retailers.
Working Capital
The funds available for the short-term financial commitments of a business.
Zoning
A means by which local councils allocate land for different uses, such as residential, commercial, recreational and industrial.
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