Business unit 1 test

Entrepreneurship

The process of starting and running a new business, typically involves innovation and risk-taking in the hope of making a profit.

Entrepreneyrship involves ?

Pursuing business opportunities, Innovation, Seeking growth

Innovation

either creating a new good, service or process, or significantly improving an existing one.

The Personal Motivation behind starting a business

the desire for Financial and Personal independence, to make a profit, to fulfil a market need, to fulfil a social need

market need

the goods or services that customers require that are not readily available.

social need

the production and/or selling goods and services for the purpose of making the world or the community a better place.

Business managers

A business manager runs a business on a day-to-day basis so that it makes a profit.

Entrepreneur

A person who is willing to seize opportunities to star and operate a business, and is prepared to take risks in the hope of making a profit.

Entrepreneurs tend to have

a shared vision, initiative, innovation and exterprise

Business Opportunity

A set of circumstances that a person can perceive as avenue to success.

different Business opportunity

Innovation, Market Opportunities, Changing Customer Needs, Research and Development,Technological Development, Global Markets

research and development

Indviduals and businesses undertake R+D in order to expand their knowledge of products and processes.

Changing customer needs

Changing incomes

changing tastes and fashions

changing prices of complementary and substitute goods and services.

changing population

Changing expectations about the market, including future prices and incomes

Changes in number of potential customers

The importance of goal setting

A business goal describes what business expects to accomplish over a set period. Without a goal, a business has no clearly defined purpose and nothing to aspire to.

SMART goals

Specific , Measurable, Attainable, Revelant, Time Bound

vision statement

A vision statement describes where the business wants to be in the future.

mission statements

a mission statement describes what the business does and how it will achieve its vision

Finacial Goals

Making a Profit, Increase Sales, Increase Market Share, Expand the business, Maximising the return on investment, Improving the way that the business operates.

Increase Market Share (Finanacial Goals)

Market share is a businesses share of total industry sales. Small market share gains often translate into large profits for these businesses.

Expand the business (Financial Goals)

Many businesses want to grow

-opening more outlets

-employing more staff

-starting new projects

-introducing innovative products

-merging with another business

Maximising the return on investment (Financial Goal)

The return on investment is ratio that relates the money gained or lost on an investment relative to the cost of the investment.

Social Goals

community service, provision of employment, social justice, ecological sustainability

Social Justice (Social Goal)

A potential business owner may plan to adopt a set of policies to ensure employees and/or other community members are treated equally and fairly.

The decision making process

Step 1: Develop Goals

Step 2: Outline the facts

Step 3: Identify alternate solutions

Step 4: Analyse the alternatives

Step 5: Choose the alternatives and implement it.

What is business concept development?

The development of the business concept is when the prospective business owner takes an idea that has arisen from an assessment of possible opporunities, and begins to turn it into an actual business.

What is IP?

IP is any creation of the mind such as a new invention, a brand, a design or artistic creation.

What are the 5 common ways to protect IP?

Trademark, Patent, Copywright, Design rights, Domain name

decision making

It is the ability to identify the options available and then choose a specific course of action from the alternatives.

Design Rights

These are rights given to the owner to commercially use, license or sell a design (the visual appearance of a product).

Market Research

It is a process involving gathering and analysing information concerning a specific market.

Market Research Steps

Step 1: I identifying what information is needed to make a decision about the potential of the businesses.

Step 2: Gathering relevant information. E.g surveys, interviews , examining government statistics.

Step 3; analysing and interpreting relevant results to assist in decision making.

Market Conditions

The features of a market into which a new good or service is to be introduced, including factors such as number of potential customers, level of competition and potential customers, level of competition and potential of growth.

Feasibility Study

It is an assessment of the practicality and potential success of proposed business idea.

Feasibility study has

an assessment of the market,

a consideration of the operation,

an analysis of commercial feasibility,

an appraisal of the potential owner’s management ability,

an understanding of whether others have tried this idea.

An assessment of the market (feasibility study)

This involves analysing the level and type of demand for the new and improved product, who and where potential customers are and why they will buy the product, who the present and potential competitors are and their strengths and weaknesses, and what the business’s competitve advantage is.

A consideration of the operations ( feasibility study)

This involves describing the product that will be sold, the resources needed such as staff and support personnel and the location of the business and legal requirements.

An analysis of commercial feasiblity (feasiblity study)

This involves how long it will take before the business has its first sale, how the price of the product will be determined, how much finance will be needed to start the businessas well as forecasting sales, costs, cash flow and profit.

An appraisal of the potential owner’s management ability (feasibility study)

The qualities requires to be a successful business owner.

An understanding of whether others have tried this idea ( feasibility study)

if they failed find out why

Economy

Is a system set up to determine what to produce , how to produce and to whom production will be distributed.

The contribution of the businesses to the economy

Business contribution to employment and taxation to revenue

Business contribution to economic growth

Business contribution to export earnings

Business contribution to R+D

Business contribution to social wellbeing

Business Contribution to career and social wellbeing

Business contribution to innovation

Business Contribution to corporate social responsiblity

balance of payments (BOP)

The BOP is a record of a country’s trade and financial transactions with the rest of the world.

Business Contribution to export earnings

a favourable BOP exists when there are more payments coming in than going out. Exporting products creates jobs, boosts incomes and improves living standards.

Corporate social responsiblity

Involves the managers or owners of a business taking steps beyond what is required by law to ensure that the broader social welfare of the community - including employees, customers, suppliers and the environment- is taken into consideration when making business decisions.

Government Investment in research and development

Federal and state governments support businesses to conduct research and development through direct funding,grants and tax incentives.

Council grants for new businesses

Local councils will provide business grants and funding programs. the objective is to encourage the establishment, growth and retention of innovative, creative and sustainable businesses.

business environment

the surrounding conditions in which the business operates. Internal or External

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. Operating and Macro.

Operating Environment

The specific outside stakeholders with whom the business interacts in conducting its business.

Macro Environment

The broad conditions and trends in the economy and society within which a business operates.

Internal Environment

Employees and managers, Legal business structure, Type of business model, Business location, sources of finance, business support services

Operating environment

Customers, Competitors, Suppliers, Special Interest Groups

Macro environment

Corporate social responssiblity, Global Issues, Economic Conditions, Legal and government regulations, Societal attitudes and behaviours, Technological considerations.

Business entity

An organisation that exists separately to its owner in order to produce and sell goods and services.

Incorporated

A business that has a separate legal existence apart from its owner(s).

Sole Trader

A business owned and operated by one person.

Unlimited Liability

When the business owner is personally responsible for all the debts of their business.

partnership

an unincorporated business structure with a minimum of 2 and a maximum of 20 owners.

Silent or sleeping partner

One who contributes financially to a business but takes no part in running the business.

incorporation

the process that a business goes through to become a registered company and a separate legal entity.

shareholders

the owners of a company who are entitled to a share of its profits.

limited liability

when the shareholders of a company cannot be held personally responsible for the debts of the business.

Private Limited Company

An incorporated business with a minimum of 1 shareholder and a maximum of 50 non-employee shareholders.

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.

Prospectus

A legal document that provides details about investment in the company.