Business Management and SME Lecture Notes

Practice flashcards covering business nature, classification, management styles, legal structures, and financial forecasting based on the provided lecture notes.

What are goods and services, and how do they differ?

Goods are tangible items that can be purchased (e.g., phone, food), while services are activities provided by other people (e.g., doctor, teacher, hairdresser).

What is the formula for calculating profit?

$$\text{Profit} = \text{sales revenue} - \text{expenses}$$

What are the three components of the value-adding process using a Subway sandwich as an example?

The raw materials (bread, meat, condiments), the transformation process (heating, construction, wrapping), and the output (the sandwich order).

How are businesses classified by size based on the number of employees?

Micro businesses have fewer than $5$ employees, small businesses have $5$ to $19$, medium businesses have $20$ to $199$, and large businesses have $200$ or more.

What is the difference between quantitative and qualitative data in determining business size?

Quantitative data includes the number of owners, number of employees, or market share; qualitative data includes decision-making processes, sources of finance, legal structure, or ownership.

What are the five main types of industry sectors?

Primary (collecting natural resources), secondary (transforming resources into goods), tertiary (providing services), quaternary (transfer of information), and quinary (traditionally home-based services).

Define 'simply transformed manufactured' (STM) and 'elaborate transformed manufacture' (ETM).

STMs are goods able to be further processed in a wide range of processes; ETMs are manufactured goods that are highly processed and valued.

What are the key characteristics of a public company?

Its shares are listed on the Australian Securities Exchange, the public can buy and sell shares, it is large in size, and has at least $1$ stakeholder.

Contrast a monopoly and an oligopoly market structure.

A monopoly is dominated by one firm with no competition and no consumer influence on price, while an oligopoly consists of a small number of large firms that spend heavily on advertising and are difficult to enter.

What are the five main internal influences a business has some control over?

Products, location, resources, management, and business culture.

What is the difference between voluntary and involuntary cessation?

Voluntary cessation occurs when the owner decides to stop operations, whereas involuntary cessation is a sudden stop due to outside forces beyond control.

What are the five interpersonal skills considered crucial for managerial success?

Self-management, communication, supportiveness, motivation, and conflict resolution.

What does the SMART acronym stand for in goal setting?

Specific, Measurable, Achievable, Realistic, and Timed.

How is Gross Profit calculated?

$$\text{Gross profit} = \text{sales revenue} - \text{cost of goods sold}$$

What is the formula for Cost of Goods Sold (COGS)?

$$\text{COGS} = \text{stock at the beginning} + \text{purchases made} - \text{stock at the end}$$

What is the fundamental accounting equation found on a balance sheet?

$$\text{ASSETS} = \text{LIABILITIES} + \text{OWNERS EQUITY}$$

What are the four stages of the human resource/employment cycle?

Acquisition, development, maintenance, and separation.

What are the three parts of the 'Triple Bottom Line'?

Profit (economic value), People (social impact), and Planet (environmental impact).

Define 'outsourcing' and its impact on a business.

Outsourcing is the contracting of organizational operations to outside suppliers, which impacts the employee mix.

What is Gross Domestic Product (GDP)?

The total value of all goods and services produced in Australia in a year, used to measure economic growth.

What are the three main options for establishing a Small to Medium Enterprise (SME)?

Starting from scratch, buying an existing business, or buying a franchise.

What are 'intrapreneurs'?

Individuals who take on entrepreneurial roles within an existing business.

How is the Break-even Quantity (BEQ) calculated?

$\text{BEQ} = \frac{\text{FC}}{\text{P} - \text{VC}}$, where $\text{FC}$ is fixed costs, $\text{P}$ is price, and $\text{VC}$ is variable costs.

What is the difference between an income statement and a balance sheet?

An income statement summarises revenues and expenses over a period to show profit, while a balance sheet provides a picture of assets, liabilities, and equity at a specific point in time.