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Resources

Resources

items required by a business to produce its goods and services

corporate social responsibility

Acting in an ethical manner in a way that goes above and beyond the law in or to make a positive social impact.

Natural resources

raw materials from the environment that are used in the production of goods and services

Factors affecting a businesses use of natural resources

Supplier considerations

• cost

• quality

• location

• reliability

Nature of resources

• perishability

• storage requirements

• security requirements

• seasonal availability

CSR

• environmental standards of suppliers

• social standards of suppliers

• environmental impact of sourcing

• location of suppliers

Labour resources

the people who provide the business with their skills and qualifications to conduct business activities

Factors affecting a business’s use of labour resources

Cost

• wages and salaries

• quantity

• timing

Quality

• qualifications

• skills and knowledge

• training

CSR

• Improving employees’ wellbeing

• providing job security

Capital resources

Man-made goods used in the production of goods and services

Factors affecting a business’s use of capital resources

Supplier considerations

• cost

• quality

Nature of resources

• capability

• operation requirements

• maintenance requirements

CSR

• environmental sustainability

• social sustainability

Business locations

the physical or non physical place that a business operated from

Shopping centres

Major shopping destination as there are many different stores that make up the centre

Advantages of shopping centres as a business locations

• Delivery truck areas are often available underground in shopping centre parking, reducing the time taken to load and unload stock.

• Employees can save time and money travelling to work by utilising the public transport routes nearby.

• Numerous facilities, such as bathrooms and food courts, that employees can use.

• Parking is available for employees, which improves accessibility.

• Greater exposure to customers can improve the business’s popularity since shopping centres are often large and well-known establishments.

• High levels of foot traffic can attract more customers and improve sales.

Disadvantages of shopping centres as a business locations

• There is increased competition as there are many stores in close proximity to each business.

• Set opening hours provide less flexibility for businesses as they need to open and close when the shopping centre does.

• Rent is typically more expensive compared to most other locations.

Shopping strips

e.g. Bourke street, High street, Glenferrie road, chapel street

Advantages of shopping strips

• Employees can save time and money travelling to work by utilising the public transport routes nearby.

• Fewer competitors compared to shopping centres as there are fewer stores nearby.

• The local members in the area are likely to visit the shopping strip due to being close to the business, which can increase the business’s number of loyal customers.

Disadvantages of shopping strips

• Often less parking is available for employees who drive to work.

• Rent can be expensive if the shopping strip is well established and has high levels of foot traffic.

• Local customers may spend less time at the shopping strip if they only come for a specific thing.

• Shopping strips typically have less foot traffic compared to shopping centres as there is less parking and fewer facilities, such as toilets and lifts.

Home businesses

Business that operates from an individuals home

Advantages of home business

• Travel time can be saved if members of the business are working from their own homes as there is no travel required.

• There is no need to pay additional rent for a business location. • Business owners can access tax deductions for living expenses as these resources are utilised when working from home.

• If employees are family members and live on the premises, the location is easy to access.

• There is flexibility in business hours since the business is operating from a home location.

Disadvantages of home businesses

• less visibility as the business is not in a shopping strip or shopping centre, and instead operates in a residential area.

• lack of privacy if the customer needs to travel through the rest of the house to arrive at the actual business location.

• Less living space available as some of the house space would be used for business operations.

• May be difficult to separate work with life as work is conducted in the living space and this may impact mental wellbeing.

Advantages of online businesses

• There is a wider customer base as anyone who has access to the internet can access the store online.

• Customers can access products at any time and from anywhere.

• The business can easily be advertised on online platforms, such as social media.

• Employees may be able to work from their own homes, making their work quick and easy to access.

• Establishing or adapting an online business can be much quicker compared to a physical store.

• There is no rent that needs to be paid for a retail store location.

Disadvantages of online business

• There are many competitors as there are lots of businesses online all across the world that would sell similar products.

• As there is no physical presence and visibility, the business may not attract many customers unless they frequently advertise.

• Customers cannot touch, try, or feel a product so they may be reluctant to purchase it.

• Employees may work alone, which can be socially isolating.

• There can be costs associated with the development and maintenance of the website, including technical support for customers.

Sources of finance

equity capital, debt capital, grants, overdraft facilities

Equity capital

Money contributed to a business by an investor in exchange for partial ownership.

Types of equity capital

Personal equity, private equity, public equity

Personal equity

Acquired by a business owner contributing their own funds to their business

e.g. personal savings of business owner

Private equity

Acquired by a business selling its shares to specifically selected individuals or businesses that have been approved by the board of directors.

e.g. money from selling shares to specifically selected individuals/businesses

Public equity

Acquired by a business selling its shares to the general public.

e.g. money from selling shares on a public exchange such as the ASX.

Factors affecting the choice of equity capital

Overall cost

• Funding a business using personal or private equity usually doesn’t have any costs.

• Funding a business using public equity requires a business to undergo an Initial Public Offering (IPO) process, which involves significant costs to organise.

Flexibility

• Personal equity has limited flexibility

• Private equity is more flexible as business partners and investment businesses may have large amounts of money.

• Public equity is highly flexible as a business can sell as many shares as it wishes to the public.

Level of control

• If business owner only uses personal equity, they have full control of the business.

• Raising capital through private and public equity sources will mean investors have partial ownership, therefore, business owner has reduced control.

Business structure

• Sole traders and partnerships = Personal equity

• Private limited companies = Private equity

• Public listed companies = Public equity

Debt capital

Is money that has been lent to a business by an external that must be paid back over time with interest.

Factors affecting the choice of debt capital

Overall cost

• Debt capital is costly as business must repay the loan in addition to interest.

Flexibility

• Loans can be short or long term.

• In addition to smaller loans, banks have the ability to provide high-value loans, which is where they allow more money to be borrowed than the amount that is typically allowed.

Level of control

• Business owners maintain a high degree of control over business decisions, as the institutions providing the finances do not have any ownership of the business.

Business structure

• Smaller businesses, (sole traders or partnerships), may find it harder to get a loan if they do not have evidence that they can repay it.

• Larger businesses, (private limited or public listed companies), are able to get high-value loans as they usually can show that they have access to enough funds to repay it.

Grants

Is money provided by a government or another organisation for a particular reason.

Factors affecting the choice of grants

Overall cost

• Grants are not required to be paid back, there is no cost incurred by the business.

Flexibility

• Grants have low flexibility as the business does not get to choose how much it receives and must also meet all the requirements set by the grant provider.

Level of control

• Business owners have less control if funded by grants as the grant must be used for the stated purpose.

Business structure

• Business structure has minimal impact on the ability to receive grants, as there are many grants available to suit a variety of different businesses.

Overdraft facilities

Agreements between banks and businesses or individuals, that allow a bank account to be withdrawn below zero.

Factors affecting the choice of overdraft facilities

Overall cost

• High-interest rates, thus, are a relatively expensive source of finance.

Flexibility

• Highly flexible as a business is able to use them at any time after negotiating the amount and time period with their bank.

Level of control

• Business owners keep a high level of control as partial ownership isn’t required through an overdraft.

• Business owners cannot control the ability to access overdraft facilities as banks are able to quickly terminate the service at any time.

Business structure

• Business structure has minimal impact on the ability to have an overdraft facility.

• Large companies can access high-value overdraft facilities as their ability to pay off the funds is higher.

Finance of debt can be raised through

Bank overdraft, Trade credit, Lease, mortgage

Business support services

Are the specialised people, facilities, or amenities that aim to help businesses successfully operate.

Types of support services

Legal support services, financial support services, technological support services, community-based support services, formal networks, informal networks, business mentors

Legal support services

The specialised people, facilities or amenities that aim to help businesses successfully operate in the area of legal advice.

Example of Legal support services

Lawyer - solicitor

How do Legal support services help

• advice on legal structures

• contracts

• advice on law changes

• legal representation

• choosing an appropriate legal business structure

Financial support services

Assist a business manage its monetary parts of the business and achieve its financial goals

Examples of Financial support services

accountants, bookkeepers, financial planners

How do Financial support services help

• Evaluating the financial feasibility of the business concept

• Establishing, maintaining, and inspecting financial information

• Determining taxation obligations

• Paying workers all entitlements

• Setting financial goals

• Advising on possible business strategies

Technological support services

Range of services provided by companies to advise and assist users with issues concerning their technical products

Examples of Technological support services

IT businesses - ICT consultants

How do Technological support services help

• Developing, installing, and maintaining technological systems, such as a website

• Advising on hardware and software that can improve operations

• Maintaining online security and privacy of customers

• Training workers in understanding and using technology

Community based support services

Engage with the local association to bring together like-minded individuals who are interested in business and community involvement.

Examples of Community based support services

start-up hubs, school-based education, local council events

How do Community based support services help

• Developing management skills for successful leadership in business

• Establishing a business idea

• Supporting and providing local jobs for the community

• Providing services for the local community

Formal networks

Interconnected groups of people and official organisations that assist in offering professional support to business owners.

Examples of Formal networks

talking to experienced business owners enable new business owners to refine their plans and gain insight into different business experiences.

• generally any type of business that requires a registered qualification (lawyers)

How do Formal networks help

• Refining the business concept

• Seeking new business opportunities

• Setting goals for business success

• Interacting with other business people

Informal networks

An unofficial interconnected group

How do Informal networks help

• Discussing and evaluating business ideas

• Suggesting possible business opportunities

• Setting goals for business success

• Continuous personal support

Business mentors

Is an experienced and knowledgeable business person who provides guidance and advice.

Examples of business mentors

Another business owner in the industry

How do business mentors help

• Developing management skills for successful leadership in business

• Refining business concepts

• Writing business plans

• Suggesting new business opportunities

• Setting goals for business success

• Accessing business networks to connect with others

Business plan

a document that outlines a business’s goals and objectives, as well as strategies to achieve them.

Business planning

the process of establishing a business’s goals and developing strategies to achieve them.

Advantages of business plans

Business

• Help owners assess whether the business is viable and determine if it can successfully operate.

• Help a business establish its goals and objectives.

• Help owners gain a better understanding of the industry, market,

  competitors, and customers.

• Can be used as a potential benchmark to review business performance.

Employee

• Employee performance may improve as they are provided with clearer direction and understanding of the business and its objectives.

Time

• Can save time in the future by planning ahead for possible business crises and emergencies.

Money

• Help a business obtain external financing as financial institutions and investors will look at the business plan to determine whether the business is financially viable.

• Reduces unnecessary spending as realistic estimates of the costs can be planned.

Disadvantages of business plans

• Time consuming, may delay opening of your business

• expensive

SWOT analysis

A planning analysis tool that helps a business identify its internal strengths and weaknesses, as well as any external opportunities and threats.

Swot stands for

INTERNAL

Strengths, weaknesses

EXTERNAL

opportunities, threats

Examples of SWOT

S - Great business reputation, Highly trained and qualified employees, High quality goods and services.

W - Poor business reputation, Unskilled and unmotivated employees, Poor quality goods and services.

O - Creation of new goods or services, Changing customer needs, Improving economic conditions.

T - Competitors improving their strategies for development, Changes in customer tastes and preferences, Declining economic conditions.

Advantages of CSR

• Demonstrating a commitment to CSR can result in a positive business reputation which may attract more customers.

• Implementing CSR practices may attract highly skilled employees who value ethical conduct and are committed to achieving business objectives.

• Employees typically prefer to work for businesses that are socially responsible and, therefore, are likely to be more motivated and loyal.

• After CSR practices are implemented, resources are used more productively, therefore production processes may become more efficient.

• Customers may be willing to pay more for goods and services produced by a business with \n a strong commitment to CSR.

Disadvantages of CSR

• A constant focus on CSR and implementing strategies to benefit society and the environment may shift focus away from other business tasks, impacting productivity levels.

• time-consuming to train employees to implement CSR practices and processes.

• CSR practices can be expensive for a business to initially implement.

CSR considerations for business plannning

sourcing sustainable resources, planning to sell environmentally responsible products, providing supportive conditions of work, fair employment.