Chapter Two

Question 1

Market Research

Answer 1

Process of systematically collecting, recording and analysing information concerning a specific market

Question 2

Market Conditions

Answer 2

Features of a market into which a new product or service is to be introduced, and include factors such as the number of potential customers, level of competition and potential for growth

Question 3

Innovation

Answer 3

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

Question 4

Research and Development

Answer 4

A set of activities undertaken to: improve existing products, create new products and improve production

Question 5

Entrepreneurship

Answer 5

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

Question 6

Business Entity

Answer 6

Any organisation engaged in the production of goods and services

Question 7

Incorporated Business

Answer 7

A business that is incorporated has a separate legal entity from the owner/s

Question 8

Sole Trader

Answer 8

A sole trader business is a business owned and operated by one person

Question 9

Unlimited Liabilty

Answer 9

Means the business owner is personally responsible for all the debts of his or her business

Question 10

Partnership

Answer 10

An unincorporated legal business structure with a minimum of 2 and a maximum of 20 owners

Question 11

Silent or Sleeping Partner

Answer 11

Contributes financially to the business but takes no part in the running of the partnership

Question 12

Incorporation

Answer 12

The process that businesses go through to become a registered company and a separate legal entity

Question 13

Shareholders

Answer 13

Are the owners of a company

Question 14

Limited Liability

Answer 14

Means that the shareholders in a company cannot be held personally responsible for the debts of that business

Question 15

Proprietary Company

Answer 15

An incorporated business with a minimum of 2, and a maximum of 50 private shareholders

Question 16

Public Company

Answer 16

A minimum of 5 shareholders, with no maximum number. With the word ‘Limited’ or ‘Ltd’ in its name

Question 17

Cooperative

Answer 17

A democratic organisation owned and controlled by the people it serves, who join together for a common benefit

Question 18

Trust

Answer 18

A business structure where a trustee holds property or carries out business on behalf of the members of the trust, known as beneficiaries

Question 19

Goodwill

Answer 19

The monetary value attached to the reputation of a particular business

Question 20

Franchise

Answer 20

Means buying the rights from another business to distribute its products under its name

Question 21

Franchisor

Answer 21

Is an individual or organisation that grants a franchise

Question 22

Franchisee

Answer 22

Is an individual or organisation that purchases a franchise

Question 23

Zoning

Answer 23

Is a means by which local councils allocate land for different uses, such as residential, commercial, recreational or industrial

Question 24

Complementary Businesses

Answer 24

Offer products or services that are related to a different business that may be of use to the customers of that business

Question 25

Demand

Answer 25

The quantity of a product that consumers are prepared to purchase

Question 26

Solicitor

Answer 26

Solicitors provide information concerning business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation.

Question 27

Accountants

Answer 27

Accountants provide valuable advice on all financial management issues and taxation obligations.

Question 28

Bank Managers

Answer 28

Provide information and advice on financial services, sources of finance and basic business management.

Question 29

Business Enterprise Centre Australia (BEC)

Answer 29

A not-for-profit network of business enterprise centres which provide support to small business owners.

Question 30

Chambers of Commerce

Answer 30

Local associations of business people that organise training seminars, arrange industry conferences and liaise with government departments

Question 31

VECCI

Answer 31

The states main employer group and Australia's largest multi-industry employer organisation

Question 32

Trade Associations

Answer 32

Offer specific industry information and assistance