Chapter Two-Small Business Decision Making

Question 1

Demand

Answer 1

Demand is the quantity of a product that consumers are prepared to purchase

Question 2

Market Research

Answer 2

Market research is a process of systematically collecting, recording and analysing information concerning a specific market

Question 3

Market Conditions

Answer 3

Market conditions are the 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 4

Innovation

Answer 4

Innovation is either creating a new product , service or process, or improving an existing one

Question 5

Research and Development

Answer 5

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

Question 6

Entrepreneurship

Answer 6

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

Question 7

Business Entity

Answer 7

A business entity is any organisation engaged in the production of goods and services

Question 8

Incorporated business

Answer 8

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

Question 9

Sole Trader

Answer 9

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

Question 10

Unlimited Liability

Answer 10

Unlimited liability means the business owner is personally responsible for all the debts of his or her business

Question 11

Partnership

Answer 11

A partnership is an unincorporated legal business structure with a minimum or two and a maximum of 20 owners

Question 12

Silent Partner

Answer 12

A silent or sleeping partner contributes financially to the business but takes no part in the running of the partnership

Question 13

Incorporation

Answer 13

Incorporation is the process that businesses go through to become a registered company and a separate legal entity

Question 14

Shareholders

Answer 14

Shareholder (or members) are the owners of a company

Question 15

Limited Liability

Answer 15

Limited liability means that the shareholders in a company cannot be held personally responsible for the debts of that business

Question 16

Proprietary Company

Answer 16

A proprietary (private) company is an incorporated business with a minimum of two, and a maximum of 50 private shareholders

Question 17

Public Company

Answer 17

Public companies are listed on the Australian Stock Exchange and can have an unlimited amount of shareholders

Question 18

Cooperative

Answer 18

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

Question 19

Trust

Answer 19

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

Question 20

Goodwill

Answer 20

Goodwill is the monetary value attached to the reputation of a particular business

Question 21

Franchise

Answer 21

A franchise means buying the rights from another business to distribute its products under its name

Question 22

Franchisor

Answer 22

A franchisor is an individual or organisation that grants a franchise

Question 23

Franchisee

Answer 23

A franchisee is an individual or organisation that purchases a franchise

Question 24

Zoning

Answer 24

Zoning is a means by which local councils allocate land for different uses, such as residential, commercial, recreational and industrial

Question 25

Complementary Businesses

Answer 25

Complementary businesses offer products or services that are related to a different business and that may be of use to the customers of that business

Question 26

Solicitor

Answer 26

Provide information concerning business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation

Question 27

Accountant

Answer 27

Provide valuable advice on all financial management issues and taxation obligations

Question 28

Bank Manager

Answer 28

Valuable contact who can provide information and advice on financial services, sources of finance, and basic business management

Question 29

Business Enterprise Centres (BEC) Australia

Answer 29

Not-for-profit network of business enterprise centres which provide support to small business owners. These centres provide information, mentoring, training programs, workshops and seminars, referrals to accountants, solicitors and government programs, and access to networks of other businesspeople

Question 30

Chambers of commerce

Answer 30

Local associations of businesspeople, usually centred around a suburb or region. They provide legal and financial help, taxation advice, an explanation of legislation, and industrial relations information

Question 31

Victorian Employer Chamber of Commerce and Industry (VECCI)

Answer 31

The state’s main employer group and Australia’s largest multi-industry employer organisation. It is concerned primarily with human resources and industrial relations issues, and provides support for members who may be in dispute with their employees

Question 32

Small Business Association of Australia and New Zealans

Answer 32

Provides a forum for exchanging news and views relating to small business matters

Question 33

Trade Associations

Answer 33

Offer specific industry information and assistance

Question 34

Federal Government

Answer 34

Operates a website, www.business.gov.au, as a service to businesses of all sizes, offering access to all government departments with advice on everything from fair trading to taxation

Question 35

State Government

Answer 35

Provides entry and links to information and support on all aspects of starting and managing a business

Question 36

Local Government

Answer 36

Offer advice on land zoning, assist with subsidised land and consider development applications

Question 37

Informal networks

Answer 37

Network of friends and colleagues, as well as other local business owners to gain information and advice

Question 38

Business Ethics

Answer 38

Business ethics is the application of moral standards to business behaviour

Question 39

Socially Responsible Management

Answer 39

Socially responsible management is managing an organisation in such a was that the broader social welfare of the community is taken into consideration when making business decisions

Question 40

Stakeholders

Answer 40

Stakeholders are individuals or goups with an interest in the success of the business