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Commerce Yearly Yr9 > Business > Flashcards

Business Flashcards

(59 cards)

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1
Q

What is an entrepreneur

A

a person who sets up a business or businesses, taking on financial risks in the hope of profit

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2
Q

What are the advantages of being an entrepreneur

A
  • opportunities for large profit
  • make your own decisions
  • no boss
  • develop creative ideas
  • challenge, reward, satisfaction
  • contribute to society
  • possible tax advantages
  • overcome unemployment
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3
Q

What are the disadvantages of being an entrepreneur

A
  • high costs
  • chance of failure
  • more responsibility
  • hard work, long hours
  • stress + worry
  • difficulty in selling business
  • constantly problem solving
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4
Q

What are the 4 characteristics of an entrepreneur

A
  • seeing and taking advantage of an opportunity
  • establishing a shared vision
  • demonstrating initiative, innovation, and resilience
  • appreciating the role of failure in success
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5
Q

What is a cost-benefit analysis

A

a detailed examination of the strengths and weaknesses of different alternatives to see whether benefits outweigh the costs

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6
Q

What do entrepreneurs do if benefits outweigh costs in a cost- benefit analysis

A

act on alternatives

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7
Q

Why are cost- benefit analysis’ useful

A
  • comparing alternatives or projects
  • estimating resources needed to complete project
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8
Q

What does a good cost benefit analysis do

A
  • identifies opportunities
  • proposes alternative ways to take advantage of opportunities
  • calculates the costs + benefits
  • compares costs + benefits to determine if benefits outweigh costs
  • informs the decision about the best alternative to recommend
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9
Q

What is market research

A

collecting and analysing information about customers and the business opportunities available

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10
Q

Why is market research helpful

A

helps entrepreneurs make better decisions by understanding consumer behaviour

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11
Q

What are the 3 steps of market research

A
  1. determining information needs
  2. collecting data from primary + secondary sources
  3. Analysing + interpreting data
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12
Q

What are the 4 factors included in market research

A
  • location
  • demographics
  • competition
  • target markets
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13
Q

Why is location important in market research

A
  • good location will lead to more sales + profit
  • impacts total sales + costs
  • a good location can maximise profit and minimise cost
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14
Q

What are demographic factors of market research

A

population characteristics that affect customer spending. Includes age, gender, marital status, family size, and income

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15
Q

Why is demographic research important

A

examinations of a region’s demographic pattern will provide a clearer picture of a business’ possible customers

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16
Q

What is competition in market research

A

rivalry among businesses that try to supply the needs and wants of a market

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17
Q

What is a sustainable competitive advantage

A

ability of a business to develop strategies that will ensure it has an ‘edge’ over its competitors for a long period of time

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18
Q

What is target markets in market research

A

the group of customers to whom the business intends to sell its product to

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19
Q

Why is target market important in market research

A

Businesses concentrate their marketing activities on their target market

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20
Q

define the term incorporated

A

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

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21
Q

Why are incorporated companies a good option for entrepreneurs

A

regardless of what happens to individual owners of the company, the business continues to operate - the business has taken a life of its own

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22
Q

what is an unincorporated business

A

no separate legal existence from its owner/s and will be either a sole trader or partnership

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23
Q

What is a sole trader

A

a business that is owned + operated by one person

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24
Q

describe the characteristics of a sole trader

Study These Flashcards
A
  • unlimited liability
  • the owner can be forced to sell personal assets such as the house or car to pay for the business debts
25
Describe a partnership business
- owned and operated by 2-20 people - unlimited liability
26
describe a proprietary company
- 2-50 private owners (shareholders) - 'Pty Ltd' at the end of the company name - limited liability - if the business cannot pay its debts, a shareholder generally loses only the money invested in the business
27
describe a public company
- listed on the ASX - general public may buy + sell shares in those companies - has 'Ltd' or 'Limited' in its name
28
define limited liability
if the business cannot pay off its debts, a shareholder generally loses only the money invested in the business
29
define unlimited liability
The owner of the business can be forced to sell personal assets such as a house or car to pay for the business debts
30
describe debt when financing a business
other people's money comes from banks, finance companies, trade suppliers
31
define equity when financing a business
the owners or shareholders contribute capital, retained profits, ordinary shares
32
what is a secured loan
the borrower offers an asset as security e.g a house
33
what is an unsecured loan
the borrower does not need to have an asset to offer as security, but the interest rate is usually higher
34
what is a prospectus
a legal document issued by companies that are offering securities for sale
35
what does a prospectus include
- history of the business - company's business model - risks - description of management - financial information
36
what are some reasons why people start their own business from scratch
- a person creates a unique product and wants to market their invention - an existing small business does not satisfy the needs of customers - the market has grown and existing businesses cannot support additional customers
37
What are the advantages to starting a business from scratch
- owner has freedom to set up the business exactly as he or she wants - owner has flexibility of location, target market, products, customer service - owner's objectives can be matched more closely to the business
38
what are the disadvantages of starting a new business
- high risk and a measure of uncertainty - without previous business reputation, it may be difficult to make profit
39
why would someone want to purchase an existing business
- the business is already operating and everything associated with the business is included in the purchase - stock, equipment, existing customer base, staff, reputation, and goodwill is included
40
what is goodwill
the value of the brand
41
what are the advantages to purchasing an existing business
- sales to existing customers will generate instant income - equipment is available for immediate use - good business history increases future success
42
what are the disadvantages of purchasing an existing business
- if the business had a poor reputation there's an uncertainty for success - it may be difficult to assess the value of the goodwill
43
what is meant by franchising
under a franchise agreement, a person(franchisee), buys the right to use the business name and distribute the goods or services of an existing business
44
what is the main advantage for franchising
products, equipment, premises design and marketing are usually established
45
what is the main disadvantage for franchising
the franchisor usually controls everything to do with price, suppliers, and health regulations
46
What are the 3 levels of government
federal, state, local
47
what are the 3 major regulations affecting business operations
1. work health and safety 2. taxation 3. environmental regulations
48
what is the work health and safety regulation
employers must ensure the health, safety, and welfare at work of all employees
49
what is included in the taxation regulation
- income tax or pay-as-you-go tax - company tax - goods and services tax
50
what is the environmental regulation
all business owners make sure they comply with all environmental laws covering water, air, land, noise pollution, and waste management
51
what are the 5 main marketing strategies
- personal selling - relationship marketing - sales promotion - publicity - public relations
52
what are the 2 main planning considerations when opening a business
staffing, location
53
why is good staff important for the success of a business
good staff provide the business with a competitive advantage, especially if the business offers a service where the customers come into direct contact with the employees
54
what does the location of a business affect
-cost - closeness to customers - closeness to competitors - visibility/ accessibility - closeness to suppliers
55
what does 'ethics' mean
moral issues and choices - what is right or wrong
56
Why is it important for businesses to respond ethically to issues
impacts the image and reputation of the business as well as the behaviour of employees
57
what is corporate social responsibility
the way a business considers the financial, environmental, and social impacts of its decisions
58
what are the 2 goals that a socially responsible business attempts to do
increase profit and provide for the greater good of society
59
what are the benefits of ethical decision making and corporate social responsibility
- improvement in staff turnover and staff feel more valued and motivated - lower business costs - increase in employee productivity - increase in sales(customers often buy from sustainable and ethical businesses) - improved business reputation - marketing opportunities

Commerce Yearly Yr9 (1 decks)

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