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Business Studies > Topic 3- Business Planning > Flashcards

Topic 3- Business Planning Flashcards

1
Q

Definition of SME size

A

ABS: Businesses with fewer than 200 employees- 99.8% of businesses

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2
Q

Definition of SME turnover

A

ATO: $10 million or less- 98.4% of businesses

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3
Q

Employment by industry

A

Construction- 950000 employees
Professional, scientific and technical services- 860000
Accommodation and food services- 775000

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4
Q

Roles

A

Produce around 55% of all the products produced yearly

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5
Q

Economic growth

A

when a nation increases the real value of goods and services over a period of time

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6
Q

GDP

A

the total money value of all goods and services over a period of time- $705b, 55% of Australia’s total GDP

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7
Q

Employment

A

2018-19: 66% of employment
7.6m employed by SMEs

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8
Q

Tax revenue

A

2017-18: 36% of total tax revenue

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9
Q

Balance of Payments

A

a record of a country’s trade and financial transactions with the rest of the world over time, usually one year- 87% of exporters of merchandise

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10
Q

Innovation

A

the development or introduction of new or significantly improved goods and services
- small: 87.6% of all innovating businesses
- 2017-18: 49% of total R&D spending

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11
Q

Keys to success

A
  • Flexibility
  • Reputation
  • Focus on adopting a niche marketing strategy- avoids the threat of the ultra-competitive and over-advertised global marketplace
  • Entrepreneurial abilities
  • Access to information
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12
Q

Reasons for failure

A

managerial inexperience and incompetence, undercapitalisation, lack of planning, economic downturn, leadership crisis, negative cash flow

60% in first three years

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13
Q

Qualifications

A

refers to official records of a completed formal training course

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14
Q

Motivation

A

refers to your personal drive, determination and desire to achieve a goal or objective

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15
Q

Entrepreneur

A

someone who starts, operates and assumes the risk of a business venture in the hope of making a profit

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16
Q

Cultural Background

A

Cultural influence can arise from a community’s traditions and beliefs, as well as centuries of experience in certain trade/services

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17
Q

Gender

A

Governments realise that employment growth will come from expansion of small business sector –> policies to assist small businesses + change in social attitudes

Proportion of female owners (June 2020)= 35.4%
2000-20: Full-time increased from 21% to 25%

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18
Q

Professional advisors

A

can examine the business more objectively and provide an independent analysis of the organisation

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19
Q

Accountants

A

provide advice on financial management issues and taxation obligations

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20
Q

Solicitors

A

provide information on business formation and structures, registration, contracts, leases, partnership agreements, patents and legislation

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21
Q

Bank managers

A

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

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22
Q

Management consultants

A

assists with business management issues that the owner cannot deal with

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23
Q

NSW State Government

A

have established agencies to provide support and advice to business owners e.g., Department of Planning, Industry and Environment

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24
Q

Business Connect

A

supports small business by providing general and specialised advice, supports digital readiness, regional business development and promotes growth through innovation + boosting resilience

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25
Q

Boosting Business Innovation Program

A

$18 million investment that gives small business access to research organisations to promote innovation and stimulate economic growth

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26
Q

Federal Government

A

delivers assistance, programs and services that support business

ATO, Austrade, Business.gov.au

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27
Q

ATO

A

main revenue collection agency- provides info about running a business as well as taxation

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28
Q

Austrade

A

provides information, advice and services to help businesses connect to international markets

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29
Q

Business.gov.au

A

offers access to government info, assistance, forms and services

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30
Q

Local Government

A

encourages business through creating employment

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31
Q

Technological advice

A

establishing an online business presence, networking a number of computers within the business premises, or making maximum use of mobile devices can all improve business efficiency

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32
Q

Chambers of Commerce

A

local associations of businesspeople who provide legal and financial advice, taxation advice, explanation of legislation + industrial relations

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33
Q

Small Enterprise Association of Australia and New Zealand

A

Not-for-profit organisation dedicated to research, policy development and dissemination of ideas related to small business management for the SME sector.

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34
Q

Trade Associations

A

offer specific industry information (about product development and industry trends) and assistance

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35
Q

ABS

A

provides valuable data on social, political and demographic trends, and on business activities
- information obtained from: census on population and housing, household expenditure surveys

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36
Q

Business Mentors

A

owners may seek advice from an experienced person in the field who can provide invaluable advice and strategies

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37
Q

Libraries and Reference Material

A

access to vast amounts of reference material and databases- subscription to trade and industry journals

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38
Q

Business idea

A

describes the core activities of the business, and the specific features and value of the goods or services it provides

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39
Q

Business opportunity

A

something an entrepreneur can see as an avenue to success. It is often identified when a person believes they can provide goods or services in a better or different way from those already on the market

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40
Q

Competition

A

rivalry among businesses that seek to satisfy a market

achieved through cost or differentiation

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41
Q

Goodwill

A

the monetary value attached to the reputation of a particular business

42
Q

Purchasing a franchise

A

people buy franchises in order to make use of an existing brand and reputation, staff training & development and operations processes

43
Q

Franchise

A

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

44
Q

Franchisor

A

an individual or business that grants a franchise

45
Q

Franchisee

A

an individual or business that purchases a franchise

46
Q

Feasibility study

A

an assessment of the business idea’s potential for success. This involves determining how practical the idea is and if it would successfully translate to the market

47
Q

Market research

A

the process of systemically collecting, recording and analysing information concerning a specific marketing problem

48
Q

Debt finance

A

relates to the short-term and long-term borrowing from external sources by a business

49
Q

Overdrafts

A

when the bank allows a business to overdraw their account up to an agreed limit for a specified time to overcome a temporary cash shortfall

50
Q

Commercial bills

A

short-term loans issued by financial institutions for larger amounts (over $100,000) for a period of generally between 30 and 180 days

51
Q

Factoring

A

the selling of accounts receivable for a discounted price to a finance or factoring company

52
Q

Mortgage

A

a loan secured by the property of the borrow

53
Q

Leasing

A

involves paying for the use of equipment owned by another party

54
Q

Debentures

A

a type of bond issued by a company for a fixed rate of interest and for a fixed period of time

55
Q

Unsecured notes

A

a loan from investors for a set period of time. It is not secured against the business’s assets

56
Q

Equity finance

A

funds contributed by the owner(s) of a business to start and expand the business

57
Q

Self-funding

A

funded purely from personal finance

58
Q

Private investors

A

the investors may contribute funds to the business in return for a share in the business’s profit and equity

59
Q

Shares

A

public companies can access capital through issuing shares

60
Q

Crowdfunding

A

raising finance by using online and social media networks

61
Q

Business name

A

you have to register a business name with ASIC unless you are a sole trader using your own name

62
Q

Zoning

A

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

63
Q

Food Act 2003 (NSW)

A

Councils and NSW Food Authority conduct regular inspections to ensure that good food safety practices are in place (temperature control, cleanliness, hand washing, labelling)

64
Q

Consumer and Consumer Act 2010 (cwlth)

A

a law that protects both consumers and businesses. It protects consumers from deceptive or misleading practices, and it regulates the trade practices of businesses

65
Q

On-costs

A

payments for non-wage benefits

66
Q

Superannuation

A

a scheme set up by the federal government. It requires all employers to make a financial contribution to a fund that employees can access when they leave or retire from a job. The percentage an employer must contribute will increase gradually from 10.5% to 12% by 2025.

67
Q

Taxation

A

the compulsory payment of a proportion of earnings to the government

68
Q

ABN

A

a single identifying number that a business uses when dealing with government departments and agencies

69
Q

Income tax

A

tax on the wage/salary of employees taxed at a progressive rate (the higher you earn, the higher tax you pay)

70
Q

Fringe benefits tax

A

tax on the provision of a benefit to an employee (private use car, entertainment, housing)

71
Q

GST

A

a broad-based tax of 10% on the supply of most goods and services consumed in Australia

72
Q

Company tax

A

tax on the earnings of a company

73
Q

Capital gains tax

A

Tax on profit made on the sale of assets

74
Q

Stamp duty

A

a tax on the transfer of property

75
Q

Land tax

A

a tax on land owned by individuals or businesses over a certain value (excludes primary production or individuals’ primary residence)

76
Q

Payroll tax

A

for payrolls that exceed $1.2m, employers pay a tax rate of 5.45%

77
Q

Rates

A

a system of property taxation usually based on the value of the land (main local government charge)

78
Q

Business Plan

A

a written statement of the goals for the business and the steps to be taken to achieve them. It is a summary and an evaluation of a business concept in written form.

79
Q

SWOT analysis

A

the identification and analysis of the internal strengths and weaknesses of the business, and the opportunities in, and threats from, the external environment

80
Q

Vision statement

A

a broad statement about what the business aspires to become in the future

81
Q

Objective

A

a specific statement detailing what a business (or individual) needs to achieve in order to accomplish its vision

82
Q

Strategic goals

A

Goals that focus on long-term, broad aims and apply to the business as a whole

83
Q

Tactical objectives

A

objectives that focus on mid-term, departmental issues and describe the course of action necessary to achieve the business’ strategic goals

84
Q

Operational objectives

A

objectives that focus on short-term issues and describe the course of action necessary to achieve the tactical objective and strategic goal

85
Q

Long-term growth

A

the ability of a business to continually expand

86
Q

Resource allocation

A

the efficient distribution of resources to successfully meet the goals that have been established

87
Q

Forecasts

A

the business’ predictions about the future

88
Q

Total revenue (TR)

A

the total amount received from the sales of a good or service
P x Q = TR

89
Q

Total cost (TC)

A

(of producing a certain number of goods or services) the sum of the fixed and variable costs for those units
FC + VC = TC

90
Q

Break-even analysis

A

used to determine the level of sales that needs to be generated to cover the total cost of production
Q= total fixed cost/unit price-variable costs per unit

91
Q

Fixed costs (FC)

A

costs that do not vary regardless of how many units of a good or service are produced

92
Q

Variable costs (VC)

A

costs that depend on the number of goods or services produced

93
Q

Cash flow projection

A

shows the changes to the cash position brought about by the operating, investing and financial activities of the business

94
Q

Monitoring

A

the process of measuring actual performance against planned performance

95
Q

Performance standard

A

a forecast level of performance against which actual performance can be compared

96
Q

Evaluating

A

the process of accessing whether the business has achieved stated goals

97
Q

Percentage change

A

% change= difference/(sales quota)×100

98
Q

Budget

A

the business’s financial plan for the future

99
Q

Budget preparation factors

A
  • review of past figures and trends
  • proposed expansion/discontinuation of projects
  • proposals to alter price/quality
100
Q

Profit levels

A

profit levels are an indicator of a business’s performance and should be carefully monitored and evaluated

101
Q

Modifying

A

the process of changing existing plans and using updated information to shape future plans

Business Studies (6 decks)

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