Business Management 2.1 Sac

Question 1

Does a business have to register their name?

Answer 1

They does not need to register his business name if he operates as a sole trader under his own name. If they uses a different name or changes the business structure, he must register with ASIC.

Question 2

Why would you need to register his business name with ASIC?

Answer 2

If Nick operates under a different name or changes his business structure, registration ensures legal recognition and compliance.

Question 3

Should a business open a separate bank account for his business?

Answer 3

Yes, a separate business account helps monitor financial performance, calculate expenses, manage cash flow, and maintain clear separation from personal finances.

Question 4

Why is it important to have a separate business bank account?

Answer 4

It facilitates easier tracking of revenue and expenses, supports sound accounting practices, and ensures business transactions are distinct from personal ones.

Question 5

Does Tanya have to register her business name?

Answer 5

Yes, Tanya should register ‘Coffee Enjoy’ with ASIC to ensure legal recognition and compliance, especially since she hasn’t researched if the name is already in use.

Question 6

Why would Tanya need to register her business name with ASIC?

Answer 6

Registration ensures legal protection and avoids potential legal issues with other businesses using the same name.

Question 7

What is one financial control system Tanya should implement?

Answer 7

Budgeting, which involves predicting the business’s financial performance. Using budgeting software or seeking advice from a financial advisor can help manage this process.

Question 8

What is another financial control system Tanya should implement?

Answer 8

Tanya should implement an inventory management system to keep track of her stock levels, including green coffee beans and flavorings, ensuring she can meet production demands and avoid overstocking or stockouts.

Question 9

How could technological issues affect Tanya’s business?

Answer 9

Technological issues could affect Tanya’s business by impacting operational efficiency and competitiveness. For example, adopting advanced technologies like automation and 3D printing could streamline production and reduce costs, while failing to use modern technology might leave her business behind competitors. Additionally, incorporating digital marketing tools and managing online customer interactions can enhance reach and engagement, but she must also be prepared to handle potential negative feedback and protect customer data from breaches.

Question 10

How can technology benefit Tanya’s marketing and customer service?

Answer 10

Using social media advertising (SMA) on platforms like Facebook, Instagram, and X is cost-effective and appropriate for promoting her unique coffee blends.

Question 11

What are the risks associated with using technology for marketing?

Answer 11

User reviews and potential hacking can leave Tanya vulnerable, despite the benefits of social media marketing.

Question 12

What is globalisation?

Answer 12

Globalisation means that businesses now operate in a worldwide market. Better technologies, methods of transportation and unrestricted trade have allowed the whole world to become a single market.

Question 13

How can global issues affect Tanya’s business?

Answer 13

Globalisation increases competition from international coffee roasters but also provides opportunities to expand into foreign markets and source beans from global suppliers.

Question 14

What strategies could Tanya consider due to globalisation?

Answer 14

Tanya could source beans from countries with lower costs or partner with international suppliers to meet increased production demands.

Question 15

What legal requirement should Tanya comply with regarding her product labels?

Answer 15

Tanya must research and ensure her labels meet legal standards for food products, including ingredient lists and allergen warnings.

Question 16

Why does Tanya need to employ a part-time worker?

Answer 16

To help with the increased roasting and packaging demands to meet Enviro Café’s order, enabling her to maintain her part-time office job.

Question 17

Why does Tanya need to find new suppliers?

Answer 17

To guarantee a consistent supply of beans required to meet the increased production volume of 100 kilograms per week.

Question 18

Why is adopting CSR considerations important for Tanya’s business?

Answer 18

Aligning with Enviro Café’s values, adopting CSR can attract customers who value sustainable and ethically produced products, enhancing her brand reputation.

Question 19

What type of professional advice should Tanya seek?

Answer 19

Tanya should consult with a business lawyer and an accountant to ensure legal compliance, proper financial management, and efficient business operations.

Question 20

What record-keeping strategy should Tanya implement?

Answer 20

Tanya should use digital tools or software to keep detailed records of her business transactions, helping with financial tracking and legal compliance.

Question 21

What is the basis of Corporate Social Responsibility (CSR)?

Answer 21

Corporate Social Responsibility (CSR) refers to a business model where companies integrate social and environmental concerns into their operations and interactions with stakeholders. It involves going beyond profit-making to contribute positively to society and the environment. CSR activities might include efforts to reduce environmental impact, ethical labor practices, community engagement, philanthropy, and ensuring fair business practices. The goal of CSR is to operate in a way that is beneficial to both the company and society, fostering goodwill and sustainable business practices.

Question 22

What is financial control?

Answer 22

Financial control is the procedures, policies, and means by which an organization monitors and controls the direction, allocation, and usage of its financial resources.

Question 23

: Outline one purpose of opening a bank account for a business and provide an example.

Answer 23

Opening a bank account for a business separates personal and business finances, simplifying finance management and ensuring accurate record-keeping for tax purposes. For instance, a dedicated business bank account allows a small retail store to track its revenue and expenses separately from the owner’s personal finances. This separation simplifies accounting, helps in accurate tax reporting, and provides a clear financial picture of the business’s performance.

Question 24

b. Explain one record-keeping strategy and one financial control strategy that a business can implement to safeguard their financial assets.

Answer 24

Implementing a source document management strategy involves systematically organizing original documents like invoices, receipts, and contracts. This ensures that all financial transactions are properly documented, providing a clear trail and supporting accurate financial reporting.

Question 25

Describe a financial control strategy to safeguard financial assets.

Answer 25

Managing cash flow is crucial to the survival of a business. Without adequate cash flow, a business cannot maintain payments to creditors or cover obligations like wages, utilities, and taxes. Strategies for effective cash-flow management include tracking money owed, hiring accounts staff to ensure timely payments, offering discounts for early payments, withholding supplies to late-paying customers, and arranging short-term loans or bank overdrafts.

Question 26

Describe one external professional that a business owner can utilize in relation to the establishment of their business. Provide specific services.

Answer 26

n accountant is crucial for establishing a business. They help with financial projections and budgeting, set up accounting systems for accurate record-keeping and tax compliance, and provide advice on the appropriate legal structure, considering tax and liability implications.

Question 27

Distinguish between a policy and a procedure with examples.

Answer 27

A policy is a guiding principle to set direction in an organization, outlining the intentions and objectives of a business. For instance, for a business-like target, there could be a customer service policy that ensures all customers get treated with the right respect that they should get and that the issue they have is correctly treated. Whereas a procedure is a specific method that someone would follow through within the framework of a policy. For example, Target has a procedure of handling customers complaints which may include steps like greeting the customer, listening to the complaint, noting down the issue, that solving it within a set timeframe.

Question 28

Describe one legal requirement for establishing a small business.

Answer 28

One legal requirement that a small business must comply with when establishing their business is obtaining the necessary business licenses and permits. This may vary depending on that type of business. For example, a café owner will have to have a food service license, so that the business gets up to date with the health and safety regulations which may involve food storage and handling. If they do not meet these requirements then it can results in fines, legal action, and ultimately the closure of the business.

Question 29

Evaluate the benefits and costs of establishing contacts overseas and retailers.

Answer 29

Benefits include market expansion, resource access, and cost efficiencies through e-commerce. Costs involve navigating regulatory environments, managing complex logistics, and increased competition from local players. Balancing these factors is crucial for leveraging global opportunities.

Question 30

Discuss considerations in choosing appropriate suppliers to meet CSR objectives

Answer 30

Consider labour practices, environmental sustainability, social impact, and reliability. Choosing suppliers with fair labour standards ensures proper worker treatment, while those with strong environmental policies support sustainability goals. Suppliers contributing to local communities and complying with regulations enhance social and legal standing, supporting CSR commitments and fostering positive stakeholder relationships.

Question 31

Identify two taxes that Tanya would have had to pay in the financial year.

Answer 31

Tanya would have to pay income tax on the profits generated from her business and Goods and Services Tax (GST) if her annual turnover exceeds the GST registration threshold, which is currently $75,000 in Australia. Income tax is calculated on her business's net income, while GST is a 10% tax on most goods and services she sells, which she must collect from customers and remit to the Australian Taxation Office (ATO).

Question 32

Q: Why must Tanya consider legal regulations such as ‘consumer guarantees’?

Answer 32

Tanya must consider legal regulations such as 'consumer guarantees' to ensure compliance with the Australian Consumer Law (ACL), which protects consumers by guaranteeing that products meet certain standards. These guarantees include that products must be of acceptable quality, fit for purpose, and match their descriptions. By adhering to these regulations, Tanya can avoid legal penalties, build consumer trust, and maintain a good reputation, which is crucial for the sustainability and growth of her business.

Question 33

Define the separate entity principle and explain how it would have been a relevant consideration for Tanya when establishing her first business.

Answer 33

The separate entity principle is a legal concept that treats a business as a distinct entity separate from its owner, meaning the business's finances and obligations are independent of the owner's personal finances. For Tanya, considering this principle would have been relevant when establishing her business because it helps protect her personal assets from business liabilities and ensures clearer financial management, which is essential for both personal and business financial health.

Question 34

8 Outline two considerations that the Hill brothers would have considered when choosing a bank account for their first business.

Answer 34

Tanya would have considered the fees associated with different business bank accounts, including monthly maintenance fees, transaction fees, and charges for services like wire transfers, to ensure cost-effectiveness. Additionally, she would consider the range of business-specific services offered, such as access to business loans, overdraft facilities, and online banking features tailored for businesses, to help manage cash flow and streamline operations effectively.

Question 35

What is cash flow?

Answer 35

Cash flow is the total amount of money being transferred into and out of a business, particularly affecting its liquidity. Positive cash flow indicates that a business's liquid assets are increasing, enabling it to settle debts, reinvest in the business, return money to shareholders, and provide a buffer against future financial challenges. Negative cash flow, on the other hand, suggests that a company is spending more money than it is earning, which could lead to financial difficulties.

Question 36

Identify one source document and explain how it is used by a contemporary business that you are familiar with.

Answer 36

An invoice is a common source document used by contemporary businesses. It details the goods or services provided, their prices, the total amount due, and payment terms. For example, in an e-commerce business, invoices are issued to customers for each purchase made online. They serve as a record of sales transactions, helping the business track revenue, manage accounts receivable, and ensure accurate financial reporting.

Question 37

Describe a legal requirement that needs to be considered when establishing a business.

Answer 37

Another legal requirement is business tax compliance. Taxes apply to different types of businesses which is important to a new business as they need to be familiar with the appropriate tax regulations. An example can be a sole trader employing staff will need to pay tax on their income, also collecting income tax from the wages of the employees and also goods of service tax.

Question 38

Explain how zoning regulations might affect business planning.

Answer 38

Local government zones land for particular uses, such as residential, industrial, business or other. Businesses must ensure that they plan to undertake only those activities that are permitted in the zone that they are considering using for their business. For example, a business owner planning to open a cafe would not be allowed to do so in an area that is zoned as residential.