Glossary

1.1 : The Role of Business

1.1.1

Businesses : organised efforts by individuals to produce and sell (usually for profit) the goods and services that satisfy individuals wants and needs.

Goods : Tangible products made from transforming inputs

Services : Intangible products made through the application of time, effort and skill

Product : A good or service that can be bought or sold

Production : the activities undertaken by the business that combines the resources to create products that satisfy customers wants and needs

1.1.2

Profit: The return, or reward that business owners receive from producing products that consumers need & want

Employment: Condition of working for an employer in exchange for wages and salary

Incomes: Money received by a person for providing  their labour, or by a business from a return on it’s investments

Choice: The act of being able to select among alternatives

Innovation: Either creating a new product, service, or process, or significantly improving an existing one. 

Research and Development (R&D) : a set of activities undertaken to improve existing products, create new products and improve production

Entrepreneurship: The ability and willingness to start, operate and assume the risk of a business venture in the hope of making a profit

Risk : The possibility of loss

Wealth: Levels of economic growth, profit and assets that are a result of business activities

Quality of life: refers to the overall wellbeing of an individual, and is a combination of both material and non-material benefits

Dividend : A distribution of a company’s profits (either yearly of half yearly) to shareholders that is calculated as a number of cents per share.

1.2 : Types of businesses

1.2.1

SMEs : defined by the Australian Bureau of Statistics as firms with fewer

than 200 full-time equivalent employees and/or less than $10 million turnover

Micro Business : A business with fewer than five employees

Small Business : A business with 5–19 employees

Medium Business : A business with 20–199 employees

Large Business : A business with 200 or more employees.

Multinational corporation : a company that has branches in many different countries

Geographical spread : the presence of a business and the range of its products across a suburb, city, state, country or the globe.

Local Business : A local business serves the surrounding area, it has a very restricted geographical spread. E.g. a local hairdresser.

National Business : A national business operates within just one country. E.g. Red Rooster.

Global Business : A global business operates in more than one country. Also referred to as a transnational/multinational corporation.

Primary Industry : includes those businesses involved in the collection of natural resources

Secondary Industry : includes businesses that take a raw material and make it into a finished or semi-finished product

Tertiary Industry : involves people performing a vast range of services or other people

Quaternary Industry : includes services that involve the transfer and processing of information and knowledge

Quinary Industry : includes services that have traditionally been performed in the home

Unincorporated Business: The same legal entities as the owner/s

Incorporated Business : Separate legal entity to the owner/s

Incorporated : refers to the process companies go through to become a separate legal entity from the owner/s

Perpetual Succession : refers to the ability of an incorporated business to continue existing regardless of changes in ownership or the death of its owners, as it is a separate legal entity with its own identity.

Liability : items of debt owed to other organisations (e.g. suppliers, banks) and include loans, accounts to be paid by the business, mortgages, credit card debt and accumulated expenses

Limited Liability : a feature of corporate ownership that limits each owner’s financial liability to the amount of money he or she has paid for the business’s shares

Unlimited Liability : when the business owner is personally responsible for all the business’s debt

Sole Traders : a business that is owned and operated by only one person

Partnerships : a legal business structure that is owned and operated by between 2 and 20 people with the aim of making a profit

Companies : are incorporated enterprises or have gone through the process of incorporation.

Public Companies : The shares for public companies are listed on the Australian Securities Exchange, and the general public may buy and sell shares in those companies.

Private Companies : an incorporated business and usually has between 2 and 50 private shareholders

Government Enterprises : government-owned and operated businesses