SME's (Establishment Influences, Contribution, Successful, Unsuccessful)

Question 1

name the personal Qualities influences establishing SME’s

Answer 1

Gender, Qualifications, Skills, Entrepreneurship, Motivation and Cultural Background

Question 2

Skills can be obtained through….?

provide example of skills you can obtain:

Answer 2

obtained through…
education
training
experience

e.g:
time management
stock control
store presentation
leadership skills

Question 3

define motivation and relate to SME’s

Answer 3

motivation: drive, desire, determination to achieve success or a goal

helps you work harder and increase chance of success for SME

Question 4

benefits to business ownership

Answer 4

choice of location
choice of who when and where you work
being your own boss

Question 5

What are 3 characteristics of an entrepreneur

Answer 5

tolerates failure
takes moderate risks
feels motivated by achievements

Question 6

What are 3 benefits of an entrepreneur

Answer 6

freedom and independence
satisfaction of business growth
pride in having made it on their own

Question 7

What are 3 burdens of an entrepreneur

Answer 7

full attention for business
long work hours
hard to leave work problems at work

Question 8

how does cultural background influence establishing an SME

give an example

Answer 8

cultural influence can come from communities and cultural beleifs such as work ethic and willingness to work long hours

an example of a cultural influence is a migrant who may have a poor history wanting to provide money for family an

Question 9

how does gender background influence establishing an SME

give an example

Question 10

6 Characteristics of SME’s

Answer 10

5-200 employees
personalised service
independently operated
independently owned
locally based
bulk of capital provided by owner
owner responsible for decision making
own more profits and pay more taxes than large businesses

Question 11

5 things that make SME’s successful

Answer 11

Entrepreneurial abilities
Information access (Access to Information)
Flexibility
Niche market (focus on)
Reputation

Question 12

5 things that make SME’s unsuccessful

Answer 12

failure to plan
lack of information
leadership crisis
inaccurate record keeping
economic downturn
supplier problems
new competitors
poor location

Question 13

SME’s Economic Contribution

Answer 13

Employment
employ around 8 million people, which represents about 70% of total private sector employment

GDP
SMEs contributed about 50% of Australia’s GDP

Invention and innovation
Around 40% of SMEs are actively engaged in some form of innovation

Balance of payments
Over 90% of Australian exporters are SMEs and they earn almost 50% of export revenue

Question 14

what are the 3 influences on an SME

Answer 14

legal, taxation, Human Resources

Question 15

What is the legal influence on a business?

Answer 15

the legal obligation to observe statutory regulations. If not abiding there is a risk of losing customers and reputation or getting fined

eg
TRADING NAME
- registered with ASIC
- helps online presence (easy to spell and remember)

ZONING
-regulations where land can be used for particular purposes
-local government has authority to restrict
-zoned for residential, commercial, industrial, agricultural and recreational
-business owners must consult with local government

HEALTH REGULATIONS
local government imposes until Public Health Act of 2010
requirements such as kitchen layout, correct food handling, temperature of food storage, employee clothing requirements

Question 16

what is the taxation influence on an SME
State the types of tax

Answer 16

Federal and State taxes apply to different businesses. Business owners should be familiar with all appropriate tax requirements

Income Tax- taken from employees salary or wage and lodged with the tax department by business

Fringe benefit tax- Tax on a benefit to an employee. Payed by employer at rate of 47% for example a company car may be provided as benefit to employee by employer, but employee has to pay 47% tax on it so the company isn’t providing 100% of the benefit

Goods and service tax (GST)- broad based tax of 10% on supply of most goods and services consumed in Australia

Company Tax- Paid on the earnings of a company and calculated on the company’s taxable income

Capital gains Tax- tax on the profits made on the sales of assets.

Question 17

What is the human resource influence on an SME

Answer 17

Hiring the right people at the right time with the right quantity

costs, skills, superannuation, annual leaving load

Question 18

Main sources for Human Resources for a business?

Answer 18

temporary/casual service
advertisement in media
schools, unit, TAFE
Internet searches
Word of mouth
JobSearch
Private employment