bruhurhbuhrhburhbr Flashcards
(36 cards)
internal environment
Reflects the business and what it stands for
Internal facts impact day to day planning, activities and success
- Owners have the most control over
Factors include
- Structure, model/strategy
- People (employees)
- Resources
- Business objective
external environment
Consists of factors outside business
Impact either directly (operating) or indirectly (macro) to day to day planning, activities and success
Operating environment : have some control over and have a direct impact to business succuess, decision making and performance
Factors – customers, competitors, suppliers
Macro environment – have no control over, have indirect impact on business success, decision making and performance
Factors – social, economic, political, environmental, international
Relationship between internal and external environment
Change in external environment causes change in internal environment
Eg. New trends = new products or change to products
Unincorporated business
a business that is one legal entity
e.g sole trader
one owner who owns and runs business
unliited liability, liable for losses
simple and cheap
partnership
same thing but up to 20 owners
governed by a act 1958
Incorporated business
Go through a process to establish business as separate entity
Up to 50 private share holders
Common way sole traders and partnerships evolve
Social enterprise
A for profit private sector business
Generates income from commercial with intent of achieving social objectives
Reinvests at least 50% of profit back into businesss for social cause’
Government enterprise business
Private sector business owned by government
Generates income from trades of goods with services for profit
Provides community services
- Communications, housing, transport, health
Facts influencing choice of business structure
Sole trader
Strength – simple, inexpensive, control over, entitled to profits, independence
Weakness – liability, limited to expertise of owner, difficult to have time off,
Partnership
Strength – simple and inexpensive, work can be shared, can take time off
Weakeness – liability, potential for conflict and disagreement, share profit
Business model
Main foundation of any business
Captures main idea of how it will access customer base to generate sale, profit, revenue
Online business model
A business that carries out main activites and sells product via world web
Does not have a physical business premises
Access customers and sell products 24/7
DTC direct to consumer
Direct to consumer business model sells products directly to customers online
Allows direct control to user experience
Face to face
Bricks and mortars
Physical establishment which is a store
Carries out commercial activites face to face
Easier to build a relationship with bustomer base
Customer sand see touch and try products before buyin
Franchise
Arrangement when a business sells right to distrivute its products and use the business name to others
Creating other stores of the same name
Importer, Exporter
Importer purhcases overseas materials and resales it in home country
Exporter sells Australian made goods to overseas customers
Importing enables access to other materials around the world
Exporting enables Australian business to access global markets
Purchasing existing business
Buying a already established business that is operating
Beware why it is up for sale, financial health of business, assets and liabitlies, goodwill (reputation of business) seen as a asset and calculated as part of its value when sold
Established customer base, generate sales quickly
Buying a failed business, no garautntee for success, paying for goodwill
Establishing new business
Starting from scratch, building the business from the ground up,
Complete creative control over establishing business
Freedom, greater control, no pay for goodwill
Higher level of risk uncertainty,
More work required
Business record needs
Any business aiming ot achieve specific objects e.g increase sale and profit or grow and scale business utilize series of business resources.
Any material, componnets or asset used in a business operation to achieve a objective
Business resources
Natural resource – any naturally existing material or asset
Labour resource – people who provide skill knowledge effort and experience
Capital resource – tools, buildings, machinery
Factors affecting use of business resources
Costs - limits using certain machines
Quality – invest in higher equality materials or equipment / machinery
Sustainability – are natural resources being sourced and used sustianabily
Business needs – which and how many resources do we need
Business locations
Where a business is located physically or virtually
Directly affects accessibility to customers as well as suppliers
Significant impact on isilibty and success
Common locations include
Shopping centers, home based, online
Factors affecting choice of business location
Proximity – how close to customers / suppliers / competitors
Space requirepments – how large is it
Image – will the location present anapproiprate image of the business
Source of finance
A business cannot start without apporopiarte finance or funds
Equity
Equity – where the business owner contributes to their own funds/capital or the funds of investors
- Owners personal savings
- Shareholder equity
- Partners money
- Seeking investment from investors
Debt
Where business owners obtainfinace in the form of a loan from a bank
Long term – lease
Short term – overdraft
Mortgage – loan secured by property
Lease – pay to use premiss- equipment – etc
