Exam For Business

Question 1

What is the importance and necessity of organisations

Answer 1

Team- together everyone achieves more

Important source of employment and career direction

Question 2

Common characteristics of an organisation?

Answer 2

Two or more people
Formal or informal structure
Formal- clearly defined rules and regulations
Informal- loose work relationships

Question 3

Revenue

Market share

Answer 3

What a business earns in the way of sales or fees

A percentage of total sales in a market held by on brand or business

Question 4

Differences between businesses?

Answer 4

Size of assets, revenue
Nature of their operations
Who runs it- sole trader etc

Question 5

What are the two types of oranisations?

Answer 5

For profit- focus is making money, assets and market share e.g Nike

Non for profit- offering a service or charity, e.g Red Cross

Question 6

Objectives of organisations?

Answer 6

There are two objectives financial and social objectives!

Financial- profit, market share and growth
Social objectives- training, services to the community, environmental goods e.g body shop

Mission and visual statement are also objectives

Question 7

Mission statement-

Answer 7

A global statement that reflects an organisation reason for being the way it will be managed!

Question 8

What is the difference between micro and small business?

Answer 8

Micro- fewer than 5 employees, most work from home

Small business- independently owned, owners and managers are the main decisions makers, hires 20 people and 100 for manufacturing

Question 9

How small business helps our economy?

Answer 9

95% of total businesses

Nurturing and developing entrepreneurs, be outsourced, hire new kids who spend money!

Question 10

What are the characteristics and give examples of the three broad types of business activity!

Answer 10

Primary- farmer and taking out natural resources from the earth

Secondary- fishing cannery. Manufacturing products, makes the patties

Tertiary- Nike- selling goods and services at an agreed price
1/2
Quaternary- finance insurance property education
Quinary- hospitality, health personal

Question 11

A business is within the private sector? What are the two sub titles

Answer 11

Unincorporated- sole trader and partnership

Incorporated- private companies, public

Question 12

What are the two main types of legal structure?

Answer 12

Incorporated and unincorporated!

Incorporated is registered and has a seperate legal entity

Unincorporated- sole trader or partnership and will have private assets siezed

Question 13

What is an organisation?

Answer 13

2 or more people who work together to achieve a set of goals and objectives

Question 14

What is privatisation?

It is when a government operates business is sold to the private sector

Answer 14

Public sector- government run, health, education and defence

Private- owned by individuals

Question 15

Distinguish between small medium and large business!

Answer 15

Size- small 5-20 medium 20-200 large 2000+

Legal structure- small sold trader partnership
Medium- partnership company
Large- company, cooperative

Ownership- small private
Medium- private and public
Large- private and public

Question 16

What are the two levels of external environment?

Answer 16

The macro environment- consists of legal, environmental and economical factors which have an impact on a business to see whether they are financial, or paying their taxes!

The operating environment- consists of consumers competitors and lobby groups which have an impact on a business when the comp rise or lower prises or consumers don’t want to pay the prices

Question 17

What is organisational stakeholder and stakeholder?

Answer 17

Employee or customer who is involved with an organisation which therefore has resposibilies towards the activities and interests

An individual or group that have a vested or direct interest with the activities of an organisation!

Question 18

ACCC is responsible for promoting good business practices!

Answer 18

Ethics is a set of principles that an organisation need to follow!

Question 19

Stakeholders interest and issues

Answer 19

Shareholder- receive dividends, socially responsible behaviour

Directors- ensure good ethics and social responsibility

Employees- to receive a fair wage, safe workplace

Customers- obtain high quality goods

Question 20

Define KPI and how it relates to benchmarking?

Answer 20

KPI measures used to evuate the performance of a business in terms of efficiency and effectiveness! This relates to benchmarking as u can compare ur KPI to the industry standard

Question 21

KPI- financial side?

Answer 21

Amount of assets, liabilities net profit and owners equity

Question 22

Non financial KPI?

Answer 22

You have to measure staff satisfaction, environmental impact and levels of social responsibility!

Question 23

Social responsibility- ethical responsibility where a government, organisation or individual has a duty to society; it’s about improving relations with stakeholders

Answer 23

Triple bottom lining- report on financial, social and environmental outcomes!

Question 24

Form of ownership structure!

Answer 24

Sole trader- usually a unincorporated business that has unlimited liability,

Partnership- combines 2 or more people
Has a partnership agreement that gets them away from personal debt! But it will end if the person leaves

Company- incorporation- owners are shareholders 2 forms of company private and public

Question 25

What is the difference between private and public listed company?

Answer 25

Private- restrict to 50 shareholders, pty ltd, family companies Public- unlimited shareholders, ltd, on the stock exchange

Question 26

Options for creating or buying a business?

Answer 26

Starting from scratch- best option Adv- complete control, money is yours, no goodwill, own touches Dis- more work, longer to establish, harder to start and make money Buying an existing business- Adv- simpler process, existing suppliers and contacts, Dis- buying someone else's failure, overpriced Buying a franchise- paying for the right to use another business Adv- low risk or fail, tested and succeeds, assistance Dis- cannot make it ur own, a lot of pavements

Question 27

Who does a business register with?

Answer 27

Must be registered on ASIC

Question 28

How does zoning by laws affect a business!

Answer 28

A business can only build in a retail zone, | Others they are NOT allowed to are light industrial, heavy industrial, commercial and residential only!

Question 29

Social responsibility?

Answer 29

Ethical responsibility where by an individual, organisations or group has a duty to society at large; about keeping key relations with stakeholders

Question 30

Define ethics!

Answer 30

A set of moral principles that an organisation needs to follow

Question 31

Why would you have a business plan?

Answer 31

To optimise chances of success, it states what objectives u have and how you will achieve them!

Question 32

Components of a business plan?

Answer 32

``` Cover Executive summary Mission statement Business profile Products Marketing plan Operational plan Financial plan ```

Question 33

What is in the executive summary!

Answer 33

Should highlight the objectives and how you will get there, the product you are selling, who your target market it etc

Question 34

What is in a marketing plan?

Answer 34

``` What market you are in Who is your competition Who your target market is Swot analysis How the business will advertise ```

Question 35

Mission statement

Answer 35

A statement that reflects a business reason for being the way it will be managed What market they are targeting A reference to the type of targets Important values of a business

Question 36

What are some different types of intellectual property?

Answer 36

Patent- makes the selling of device substance or Method yours Trademark- numbers letters logo shape Design- features and the way it looks Copy right- art, songs and literature

Question 37

# Define innovation? Define intellectual property?

Answer 37

Introduction of new process and methods The property of mind or intellect, can be an inventions, rademark or original design!

Question 38

How to come up with a good idea?

Answer 38

Family and friends Personal inspiration Research Looking overseas

Question 39

Factors to consider when selecting a location!

Answer 39

``` Personal factors- proximity if you love it etc Area profile- industry market Demographics- population the incomes Complementary business- Zoning regulations Accessibility- easy access ```

Question 40

Why people want to start a small business?

Answer 40

To be independent To become wealthy Fill a gap in the market

Question 41

Skills needed for business success!

Answer 41

``` Communications skills Orgainisational skills Marketing skills Promoting skills Financial skills Negotiation skills Technical skills ```

Question 42

Qualities needed for business success!

Answer 42

``` Innovative Take risks Think outside the square Creative Confidence ```

Question 43

What are two ways a business can fail?

Answer 43

Insolvency: business closes itself down due to it not being able to meet its financial commitments Bankruptcy:when a business closes its doors as it cannot pay its debt!

Question 44

Why do businesses fail?

Answer 44

A lack of manager experience | Must be able to evaluate the financial performance and performance of the business!

Question 45

What are the three types of planning?

Answer 45

Strategical- 2-5 years Operational- day to day, weekly and monthly adds up to a year Tactic-1-2 years