Business Studies (Preliminary)

Key roles of Business

Key roles of Business

Profit, Employment, Income, Choice, Innovation, Entrepreneurship and Risk, Wealth, Quality of Life

Size of businesses

Micro, Small, Medium, Large

Classification based on geographical reach

Local, National, Global

Categories of Industry

Primary, Secondary, Tertiary, Quaternary, Quinary

Types of Legal Structures

Sole Trader, Partnership, Public, Private, Government Organisation

Factors Influencing Legal Structure

Size, Ownership, Finance

External Influences

Economical, Financial, Geographical, Social, Legal, Polictical, Institutional, Technological, Competitive Situation, Markets

Internal Influences

Products, Location, Resources, Management, Business Culture

Stages of Business Life

Establishment, Growth, Maturity, Post-Maturity

Factors that can lead to Business Decline

Global Competition, Lack of Funds, Overdependence on a single customer, Poor management, Poor employees, Poor location, Natural disasters

Cessation of business

To come to an end. No longer operational

Key skills of management

Intrapersonal, Communication, Strategic-Thinking, Decision-Making, Problem-Solving, Vision, Flexibility, Reconciling the Conflicting Interests of Stakeholders, Adapting to Change

Business Goals a business may achieve

Profits, Market Share, Growth, Share Price, Social, Environmental

autocratic leadership

leadership style that involves making managerial decisions without consulting others

democratic leadership

a leadership style in which managers work with employees to make decisions

Division of labour

The action of separating something into parts, or to process of being separated

Hierarchical Structure

Arranged in order of rank

Flatter Management Structure

An organizational structure with few or no levels of middle management between ground staff and executives

Chain of Command

A system in which instructions are passed from one person to another

Span of Control

The area of activity and number of functions/people for which a manager is responsible for

Classical Approach

Management as Planning, Organizing and Controlling

Behavioural Approach

Management as Leading, Motivating and Communicating

Contingency Approach

Flexible

4 Key Business Functions

Human Resources, Finance, Marketing, Operations

Production Process

Inputs to Outputs

Marketing

Promoting or Selling Goods/Services

Marketing Concept

A Philosophy that all sections of the business are involved in satisfying a customer's needs and wants while achieving the business' goals

Target Market

A Group of customers on whom the business focus' its attention - Segmented by Geographic, Demographic, Psychopragic, Product Related

Types of Marketing Approaches

Mass, Segmentation, Target, Niche

Marketing Mix

Product, Price, Place, Promotion

Gross Profit

= Revenue - Cost of Goods Sold (COGS)

Net Profit

= Gross Profit - Expenses

Assets = Liabilities + Owner's Equity

The accounting equation

COGS

= (Opening Stock + Purchases) - Closing Stock

Types of financial statements

Balance Sheet, Cash Flow Statement, Income Statement

Risk Management

The process of identifying risks, assessing risks and developing strategies to manage risks

Stages of Human Resource management

Recruitment (Acquisition), Training (Development), Contracts, Separation

Goals

SMART - Specific, Measurable, Achievable, Realistic, (within a) Time Span

Reasons for resistance to Change

Management, Fear of Job Loss, Disruption to Routine, Fear of the Unkown, Inertia, Cost

Types of Management Consultants

Professional Advisors, Government Agencies, ABS, Small Business Associations

SME's Role

Engine Room of the Australian Economy

SME's Economic Contribution

Jobs, Taxes, GDP, Invention and Innovation

Examples of why SME's fail

Failure to plan, leadership crisis, lack of information, inaccurate record keeping, failure to delegate, complacency, incorrect marketing strategy, poor location, lack of financial planning,

Factors that lead SME's to be successful

Entrepreneurial Abilities, Access to Information, Focus on Market Niche, Reputation, Flexibility

Personal Qualities of successful business managers

Qualifications, Skills, Motivation, Entrepreneurship, Cultural Background, Gender

Monopoly

One Large Business Dominates

Establishment Options

Start from Scratch, Existing Business, Buying a Franchise

SWOT Analysis

Strengths, Weaknesses, Opportunities, Threats

Vision Statement

Broad, Future of the Business, Business' Function

Types of Goals

Financial, Personal, Social

Types of Objectives

Strategic, Tactical, Operational

Long Term Growth

Ability to Continually Expand

Total Revenue

Price x Quantity Sold

Total Costs

Fixed Costs + Variable Costs

Fixed Costs

Independent of the quantity sold and does not change over time

Variable Costs

Increase as Volume Increase

Break-Even Analysis

Determines the level of sales (total revenue) that needs to be generated to cover the total cost of production

Equations for Break Even

Total Revenue = Total Costs

Quantity (Q) = Total Fixed Costs / Unit Price - Variable Costs Per Unit

Cash Flow Projection

The changes to the cash position brought about the operating, investing and financial activities of the business

Cash Inflow

Cash Receipts

Cash Outflow

Cash Payments

Monitoring

Planned vs. Actual Performance

Evaluating

The process of assessing whether the business is achieving its goals and objectives

Budgets

A business' financial plan for the future. This contains projections of incomes and expenses over a set period of time

Legal Requirements for a business

Business Name, Zoning, Health and Other Regulations

Taxation

Federal and State Taxes, Local Rates and Charges

Corrective Action

Identifies a problem and effectively eliminates it, thus preventing a re occurrence