Topic 3 : influences in establishing a small to medium enterprise

Question 1

list personal qualities that affect how you establish an SME

Answer 1

qualifications
skills
motivation
entrepreneurship
cultural background
Gender

Question 2

what do qualifications have anything to do with bussiness

Answer 2

you do not need to go to school to become an entrepreneur. Entrepreneurs should go to business courses to learn the importance of planning and generating business ideas

Question 3

what does skill have anything to do with business

Answer 3

owners must have technical skill to transform a business opportunity into a real business

Question 4

what does motivation have to do with bussiness

Answer 4

having a reason for running there business allows the owner to have a vision for their businesses future

Question 5

what does entrepreneurship have to do with bussiness

Answer 5

it means you are able to establish and run a successful business and will take calculated risks to turn an idea into a successful business operation

Question 6

what does cultural background have to with bussiness

Answer 6

heritage can enhance your business

Question 7

what does gender have to do with bussiness

Answer 7

expectation and standards set both genders are equal

Question 8

What does information allow entrepreneurs to do

Answer 8

make better plans and gain advantage over competitors

Question 9

list sources of information that businesses can use

Answer 9

Australian bureau of statistics
internet sites operated by industry groups
trade shows/conferences

Question 10

how do entrepreneurs find new business opportunities

Answer 10

they research the market for signs of gaps that they can fill

Question 11

list some examples of opportunities

Answer 11

things deliberately looked over by big companies
new product and services
political changes

Question 12

list the steps of the business idea generation

Answer 12

1. business idea/s formulated
2. first assessment of idea/s
3. Research undertaken
4. idea evaluated
5. identify problems
6. identify solutions
7. understand risk involved
8. make decision on idea
9. start bussiness

Question 13

list types the levels of competition(3)

Answer 13

monopoly
duopoly
oligopoly

Question 14

what is a monoploy

Answer 14

a market dominated by 1 business (95%+)

Question 15

what is a duopoly

Answer 15

a market dominated by 2 businesses

Question 16

what is a oligopoly

Answer 16

a market controlled by a few very large businesss

Question 17

list the establishment options (3)

Answer 17

new business
existing business
franchise

Question 18

list 3 advantages of creating a new business

Answer 18

full creative control
gets to make all decisions
don’t need to pay goodwill

Question 19

list 3 disadvantages of creating new business

Answer 19

high risk of failure
long time until you break even
needs to build customer base

Question 20

list 3 advantages for buying a existing business

Answer 20

established customer base
‘turn key’ business- immediate start
established suppliers and staff

Question 21

list 3 disadvantages for buying a existing business

Answer 21

existing problems (not immediately noticed)
pay goodwill-expensive
post success may be due to previous owner

Question 22

list 3 advantages for buying a franchise

Answer 22

established customer base
take advantage of company promotions
suppliers and materials supplied

Question 23

list 3 disadvantages of buying a franchise

Answer 23

no creative control
pay for goodwill-expensive
franchiser has contract production and doesn’t need to renew the contract, if you aren’t doing well or are going against the ideals of the company

Question 24

what must you research when you are creating your idea (4)

Answer 24

your target market
demand for your product
similar products from competitors
cost of providing the product

Question 25

how should you price your product

Answer 25

through using pricing methods and strategies

Question 26

list some things do you need to consider when looking for a location(3)

Answer 26

buy or rent proximity to competitors foot traffic

Question 27

what is finance

Answer 27

is the money that a person will need to fund the operations of the business

Question 28

list some sources of finance through equity(4)

Answer 28

owners capital retained profits invite partners sell shares

Question 29

list some examples of short term debt(3)

Answer 29

credit card overdraft factoring

Question 30

list some examples of long term debt(3)

Answer 30

mortgage leasing debenture

Question 31

what is overdraft

Answer 31

permission to withdraw more than what is in you account

Question 32

what is factoring

Answer 32

selling accounts receivable to finance companies for a reduced price

Question 33

what is a debenture

Answer 33

an amount borrowed from a company that is paid back + interest over 1-10 years.

Question 34

what is secured debt

Answer 34

the borrower puts an asset as security for a the loan. meaning the lender may reposes it if the loan is not repayed.

Question 35

what legal influences, influence your besiness

Answer 35

Business name zoning health regulations consumer law

Question 36

what laws are there about business names (2)

Answer 36

you must register business name with the ASIC, Must have a Australian Business Number (ABN) which must appear on all invoices and communication

Question 37

what laws are there about zoning(2)

Answer 37

local councils can restrict where some businesses are located council plans and allocates residential, commercial, industrial zones

Question 38

What laws are there about health regulations(2)

Answer 38

business must have all required licenses | food and hospitality businesses must meet all health and safety requirements

Question 39

what laws are there about consumer law

Answer 39

Australian consumer law: protects consumers from misleading business practice businesses must honour warranties, price of goods, appropriately and no false claims

Question 40

what must businesses do when planning for Human resources

Answer 40

the owner must undertake a job analysis

Question 41

what is a job analysis

Answer 41

it sets out the key duties and responsibilities of each position

Question 42

what costs are needed to supply employees (2)

Answer 42

wage costs | non-wage costs

Question 43

what are wage costs

Answer 43

refer to the wage or salary that is paid to an employee

Question 44

what is a non wage cost

Answer 44

additional cost that aren't wages eg uniform,insurance,superanuation

Question 45

List types of taxes that will need to be paid in your bussiness

Answer 45

federal tax state tax local fees and charges

Question 46

what is federal tax

Answer 46

a tax on profits

Question 47

what type of federal tax do unincorporated businesses pay

Answer 47

unincorporated businesses pay tax as individuals(income tax),

Question 48

what type of federal tax do incorporated businesses pay

Answer 48

incorporated businesses pay company tax(businesses with under $10 million in revenue is 27.5%)

Question 49

what type of tax do both incorporated and unincorporated businesses pay

Answer 49

PAYG (pay as you go ) | GST (Good and services tax)

Question 50

how much is PAYG

Answer 50

a tax based on salaries+wages of employees that are given To the ATO (Australian taxation office)

Question 51

how much is GST

Answer 51

10% of the cost of inputs/production

Question 52

what is state tax

Answer 52

state tax is the income tax

Question 53

list types of state tax(4)

Answer 53

payroll stamp duty gaming machine tax car registration

Question 54

list some types of local fees and charges (4)

Answer 54

land tax development applications parking permits venue hire