NATURE OF BUSINESS

Question 1

*** ROLE OF BUSINESS

Answer 1

• The nature of a business
  
  • producing goods & services
  • functions of a B

Question 2

PRODUCING G&Ss

Business …

Answer 2

the organised effort of individuals to produce & sell products for a profit

Question 3

PRODUCING G&Ss

Product…

Answer 3

either a goods or service or combination of both

E.G restaurant, zoo

Question 4

PRODUCING G&Ss

Goods…

Answer 4

tangible, touchable → furniture

Goods are either intermediate or final.

Question 5

PRODUCING G&Ss

Services…

Answer 5

intangible, an experience, goods can be attached to it → mechanic, hairdresser

Question 6

PRODUCING G&Ss

Intermediate…

Answer 6

(made into something further) → fabric→ clothes.

Question 7

PRODUCING G&Ss

Final…

Answer 7

oil is final product from an oil company

Question 8

FUNCTIONS OF A BUSINESS (8)

Answer 8

profit, employment, incomes, choice, innovation, entrepreneurship & risk, wealth, quality of life.

Question 9

PROFIT

Answer 9

Main function of a B, expenses deducted from revenue
increase profit
- ↑ sales → marketing etc
↓ expenses, economy of scale (bulk), labour, global source

Question 10

EMPLOYMENT

Answer 10

Main source of employment in Au is from SMEs

Employment → income → self esteem → role in society

Question 11

INCOMES

Answer 11

Bs provide income for individuals.

- Wage, salary, commision, dividend

Question 12

CHOICE

Answer 12

Bs give consumer alternatives & freedom to choose between G&Ss
Adv→
Flexibility in PRICE of products between Bs→ monopoly, Auspost.
Improved FEATURES in products→competitive adv→meets the needs/wants of ppl

Question 13

INNOVATION

Answer 13

variation to an existing product > done through market research

Question 14

invention

Answer 14

complete new product

Question 15

ENTREPRENEURSHIP & RISK

Answer 15

ability & willingness to start, operate & assume the risk of a B venture to make a profit.
→ John Foley, co founder CEO of Peloton, 6 year built 4.15B US→ rapid trend of spin classes

Question 16

WEALTH

Answer 16

A B receives money from customers when they sell a product or service Simultaneously a B must expand money in order to pay expenses

Question 17

QUALITY OF LIFE

Answer 17

• Bs utilise customers want to get ahead of their competition
• consumer trends & influences that affect the spending of customers forces Bs to change & evolve.
• these imposed consumer constraints compel Bs to make more of what customers want

Question 18

Quality & skills of an entrepreneur

Answer 18

positive risk takers, adventurous, innovative, financial risk taking, connection, resilient, creativity, faith, good people person, humility, willingness to listen & learn etc.

Question 19

*** TYPES OF BUSINESS

Answer 19

• Classification of business

- Factors influencing choice of legal structure

Question 20

CLASSIFICATION OF BUSINESS

Answer 20

• size, geographical spread, legal structure, industry

Question 21

SIZE

Answer 21

micro, small, medium large

Question 22

SIZE

Microbusiness

Answer 22

> 5

Question 23

SIZE

Small

Answer 23

5 - 19

Question 24

SIZE

Medium

Answer 24

20 -199

Question 25

SIZE Large

Answer 25

200 or more

Question 26

% of SMEs in AU...

Answer 26

98%

Question 27

Size is differientiated in Bs through...

Answer 27

no. employees, no. owners, market share, legal structure

Question 28

Qualitative descriptions help to determine size...

Answer 28

Owner making most management decisions, owner provides capital, finance, B has little control within market, independently owned or funded, the B is locally based

Question 29

Quantative descriptions helpt to determine size...

Answer 29

- micro, small, no. employees

Question 30

GEOGRAPHICAL SPREAD

Answer 30

The prescence of a B and the range of its products across a suburb, city, state, country or globe - local - national - global.

Question 31

GEOGRAPHICAL SPREAD Local

Answer 31

- restricted geo location - serves the surrounding area E.G hairdresser

Question 32

GEOGRAPHICAL SPREAD National

Answer 32

- operates within just one country | E.G Coles, myer, David jones

Question 33

GEOGRAPHICAL SPREAD Global

Answer 33

- large companies that have branches in numerous countries - multinational E.G Mcdonalds

Question 34

INDUSTRY SECTOR (5)

Answer 34

primary, quaternary, tertiary, secondary, quinary

Question 35

Industry...

Answer 35

Bs that are involved in similar types of products

Question 36

INDUSTRY SECTOR Primary

Answer 36

the collection of natural resources | E.G mining, fishing, agriculture

Question 37

INDUSTRY SECTOR Secondary

Answer 37

production of finished or semi-finished goods | E.G raw wool, fabric

Question 38

INDUSTRY SECTOR Tertiary

Answer 38

performing a service | E.G → labour, services→ plumber, gelato store

Question 39

INDUSTRY SECTOR Quaternary

Answer 39

the transferring and processing of information and knowledge | E.G doctor, teacher

Question 40

INDUSTRY SECTOR Quinary

Answer 40

services that have traditionally been performed in the home | E.G cooking

Question 41

LEGAL STRUCTURE (4/5)

Answer 41

sole trader, partnership, public company, private/proprietary, govt enterprise

Question 42

Unincorporated

Answer 42

name legally tied to the B > unlimited liability

Question 43

Incorporated

Answer 43

seperate entity > limited liability

Question 44

Limited liability

Answer 44

shareholders are legally responsible for the debts of the company, only to the extent of the nominal value of their shares.

Question 45

Unlimited liability

Answer 45

legal obligations general partners & sale proprietors as they are liable for all B debts if B can't pay its liabilities > completely liable

Question 46

LEGAL STRUCTURE Sole trader

Answer 46

- unincorporated B entity | -