Business Unit 1 Exam

AOS 1

ASO 1

What is entrepreneurship?

The concept of starting and running a new business, often involving innovation and risk.

What are some personal motivation for starting a business?

Reasons behind starting a business, such as financial independence, personal independence, fulfilling a market need, or fulfilling a social need.

What are the characteristics of successful business managers/entrepreneurship?

Qualities like

• M - Motivation

• O - Organization

• L - Leadership

• D - Discipline

• E - Effective Communication

• R - Risk-taking

• S - Smart Decision-Making

What are some sources of Business Opportunity?

-          Recognising gaps in the market

-          New technologies

-          Unmet needs

Goal Setting and Decision-Making?

The importance of setting SMART goals (Specific, Measurable, Attainable, Relevant, Time-bound) for direction, performance measurement, motivation, and planning in a business.

• Specific - Clearly defined.

• Measurable - Can be tracked.

• Attainable - Realistic and achievable.

• Relevant - Important to the business.

• Time-bound - Has a deadline

What is a Business Concept Development?

Turning a business idea into a concrete plan, including the product/service, target market, and operations.

What is the relationship Between Business Opportunities and Business Concept Development?

Identifying opportunities leads to developing a business concept.

What is Market Research?

Collecting and analysing information about a market to understand customer needs and competition.

What is Initial Feasibility Studies?

Assessing if a business idea is practical and likely to succeed by examining the specific market, operations, owner's ability and finances.

Contribution of Businesses?

How businesses contribute to economic well-being (employment, taxation revenue, economic growth) and social well-being (career development, innovation, community service).

Fostering Innovation and Entrepreneurship?

Methods to foster a culture of business innovation and entrepreneurship in a nation, such as government investment in R&D, council grants, school-based programs and funding

What is Innovation?

Creating or improving a good, service, or operations.

Global Markets?

Selling goods or services in multiple countries and the advantages of increased sales, reduced dependence, and longer product life cycles.

For-Profit vs. Not-For-Profit?

Understanding the differences in their aims and how profits are used. For-profit businesses prioritize earning profit for owners, while not-for-profit organizations focus on fulfilling a social mission with any surplus reinvested to support that purpose.

Technical Development?

Applying new knowledge or technology to improve how a business operates or what it makes.

Research and Development (R&D):

Improving business operations or creating new products/services through investigation and experimentation.

Market Conditions?

Understanding factors like customer base, needs and wants, market size and location, competitors etc

Types of Business Goals:

Financial (profit, sales, market share, expansion, return on investment) and social goals (community service, employment, social justice, ecological sustainability).

Factors Causing Change in Customer Needs?

• Changing incomes

• Tastes (style/what’s trending)

• Prices

• Population

• Number of customers.

The Three Questions an Economy Answers:

• What goods/services are produced?

• How are they produced?

• How are they distributed?

Difference between a Business Goal and Business Objective:

A business goal is a broad statement while a business objective is a specific measurable steps taken to reach a goal.

AOS 2

AOS 2

What's the difference between the inside and outside of a business?

Inside (Internal): Things the business controls, like employees, managers, and how it runs.

Outside (External): Things outside the business that affect it, like customers, competitors, laws, and society.

What are the main ways a business can be set up legally?

• Sole Trader: Run by one person. Easy to start, full control, but the owner is fully responsible for debts (risks personal stuff).

• Partnership: Run by 2-20 people. Share work and costs, but partners are responsible for each other's debts and might argue.

• Private Company (Pty Ltd): Has its own legal identity. Owners (shareholders) are only responsible for what they invested. Shares aren't sold to the public.

• Public Company (Ltd): Can sell shares to the public on the stock market. Easier to get money, but more rules and need to share more info publicly.

• Social Enterprise: A business that tries to help society while making money.

• Government Business Enterprise (GBE): Run by the government to provide services (like Australia Post).

How does a business decide how it will make money? (Business Models)

• Online Business: Only sells online (like Google or Facebook). Lower costs, reach more people, but no physical shop.

• Bricks-and-Mortar: Traditional shops you visit (like Woolworths). Customers can see things, but higher costs. Many now sell online too (bricks-and-clicks).

• Direct-to-Consumer (DTC): Sells straight to customers, no middlemen (like Dollar Shave Club). Builds loyal customers, cuts costs, but needs good delivery.

• Franchise: You run a business using a big brand's name and rules (like McDonald's). Use their fame and support, but have less control.

• Import and Export: Buying goods from other countries (import) or selling Australian products abroad (export). Reach new markets, but deal with different laws and shipping.

Should I start a new business or buy one that already exists?

Buying Existing:

• Pros: Get money right away, proven history, easier to get loans, already have stuff and staff.

• Cons: Might be hard to change things, success could depend on the old owner, might pay too much for its "good name," employees might not like changes.

Starting New:

• Pros: Can create exactly what you want, control how it grows, no costs for an old reputation, can start small.

• Cons: High risk of failure, hard to get loans without history, takes time to get customers, takes time to make money.

What kind of "stuff" or resources does a business need?

• Natural Resources: Things from nature (land, water, materials). Need to use them wisely and be eco-friendly.

• Labour Resources: The people working there (skills, effort, knowledge). Happy workers are productive! Need fair pay, training, and good treatment.

• Capital Resources: The tools and machines used (equipment, buildings). Need the right ones, keep them working, and train staff to use them.

Planning these helps businesses run smoothly and last longer.

Why is where a business is located important, and what affects the choice?

• Why it matters: It affects if customers can find you and how easy it is to get supplies.

• Types of places: Shopping centres (busy, but costly), shopping strips (along roads, cheaper), online only, home-based.

• Factors to think about:

  • Visibility: How easily people see the business (important for shops).

  • Cost: Busy spots cost more rent.

  • Close to Customers/Suppliers: Shops need customers nearby, factories need transport for materials.

  • Close to Competitors: Can be hard, but sometimes being the first in a new area is good.

  • Close to Similar Businesses: Can attract more customers to the area.

How do businesses get the money they need to start and grow?

• Equity Finance (Owner's Money): Money from the owners. Don't have to pay it back (unless owners leave), no interest costs, owners keep control. Can be personal savings, money from family/friends, investors, selling shares (for big companies), or crowdfunding.

• Debt Finance (Borrowed Money): Money borrowed from banks/lenders that must be paid back with interest. Riskier because of repayments.

  • Short-term: Bank overdrafts (for quick needs), bank bills, trade credit (pay suppliers later).

  • Long-term: Mortgages (for property), business loans (secured or unsecured), leasing equipment.

• Government Grants: Money given by the government, often for specific reasons like boosting exports. Usually has rules about how you can use it.

Factors affecting choice: How much it costs (interest), when it needs to be paid back, the business's legal structure, how flexible it is, and how much control the owners want to keep.

What kind of help can business owners get?

• Legal & Financial Advice: 

–         Experts like lawyers (solicitors) for setting up and making contracts

–         Accountants for money and tax

–         Bank managers for finance info

• Technological Advice: 

–         Help with using general technology

–         Building websites

–         Fixing computer problems.

• Community Help: Joining local groups (Chambers of Commerce, Business Enterprise Centres) to meet others and get support.

• Formal Networks: Specific organisations for businesses (like industry groups).

• Informal Networks: Getting help from friends and other business people you know.

Business Mentors: Experienced people who give advice and strategies.

What is SWOT analysis and why is it useful?

• What it is: A tool to look at your business:

  • Strengths: What you do well (inside).

  • Weaknesses: Where you struggle (inside).

  • Opportunities: Chances to improve (outside).

  • Threats: Challenges you face (outside).

• Why it's useful: 

–         Easy to use

–         helps you understand your business

–         helps you plan and set goals.

• But: It doesn't solve problems for you, can give too much info (huge list of tiny things that aren't really that important), and is just one planning tool.

What is a business plan and why do you need one?

• What it is: A written guide that explains your business goals and how you'll reach them. Like a map!

• Why you need one: 

–         Helps you stay focused

–         shows if your idea is good

–         highlights good and bad points

–         shows you're serious

–         helps you manage the business.

–         HHHSS

• What's in it:

–         Summary of the business

–         how it will work (team management, daily stuff)

–         money details (costs, how you'll make money)

–         how you'll reach customers.

–         SMHH

• But: Having a plan doesn't guarantee success, spending too long on it can slow things down, and you have to actually do the plan!

What is Corporate Social Responsibility (CSR) and why should businesses care?

• What it is: Businesses acting ethically and sustainably, caring about society and the environment, not just making money.

• Why care:

  • Customers: More people buy from companies that are good for the world.

  • Employees: Happy workers stay longer, saving money.

• It's the right thing to do!

How to do it: Think about the environment (reduce waste), treat customers well (safe products, fair prices), treat employees fairly (good pay, safe work).

It can cost money and take time at first, but it's important for long-term success and reputation. Businesses should include it in their planning.

 

AOS 3

AOS 3

What's the difference between the inside and outside of a business?

Inside (Internal): Things the business controls, like employees, managers, and how it runs.

Outside (External): Things outside the business that affect it, like customers, competitors, laws, and society.

• Note: Changes outside can make the business change what it does inside.

What factors make up the external environment that affect business planning?

Macro Factors (big external forces outside that the business can’t control: Laws, society’s values, the economy, technology, global issues, and social responsibility.

Operating Factors (people or business that directly affect the business): Customers’ needs, competitors’ actions, suppliers, and special groups like unions.

What laws and rules affect how businesses work?

• Businesses have to follow laws about taxes, health, safety, and the environment.

• Starting a business means registering it and getting licenses.

• Location laws, health rules, employment laws, taxes, and protecting consumers are important.

• Not following laws can lead to fines or closing down.

How do society’s values and trends influence business?

• Society’s morals and beliefs affect what people want and how they behave.

• Trends like older populations or flexible work schedules, change what businesses need to do.

• Examples: More people care about the environment, so supermarkets sell sustainable seafood.

• Businesses need to keep up with what society cares about to stay relevant.

What economic factors affect how a business plans?

• The economy goes up and down in cycles.

• Things like interest rates, employment, and how confident people feel about the economy matter.

• During good times, businesses can grow. During bad times, sales may drop and jobs may be lost.

How does technology influence business planning?

• New tools like online storage, robots, and better communication help businesses work faster and better.

• Future tech like drones, AI, and 3D printing can open new opportunities.

• But, new tech can also mean fewer jobs and higher costs.

• Businesses need to stay updated to stay competitive.

What global factors affect a business?

• Companies compete with others from around the world.

• Selling products overseas can grow a business but involves dealing with laws, shipping, and currency.

• Offshoring means moving jobs to other countries to save money, but it can cause local job loss.

• Exchange rates affect how much things cost when buying or selling internationally.

• Protecting ideas with patents and trademarks is also important.

• Selling online lets businesses reach customers worldwide.

What is CSR and why does it matter?

• CSR means businesses act ethically and caring about the environment and their workers.

• It helps build a good reputation and keeps customers happy.

• Examples: Using renewable energy, paying fair wages, reducing waste, and helping communities.

• Doing the right thing now makes the business stronger later.

How do customers and competitors shape a business?

• Customers want good quality, fair prices, and products that are environmentally friendly.

• Customer opinions can make businesses change what they sell or how they do things.

• Competitors are other businesses selling similar stuff.

• Businesses watch competitors to find ways to be better, like offering lower prices or better products.

What role do suppliers and special interest groups play?

• Suppliers: Provide the materials needed for products. Good relationships help the business run smoothly.

• Special Interest Groups: Groups like unions or environmental groups can influence how a business operates.

• They might push for better wages, safer work, or more environmentally friendly practices.

How do outside factors affect real businesses?

• Holden, a car company, shut down because other countries made cheaper cars and people wanted smaller vehicles.

• Powershop lost customers when Shell bought it because people didn’t like Shell’s environmental record.

• Businesses need to pay attention to outside changes so they can adapt and stay successful.