Types of Business

Question 1

What are the classifications of business based on size?

Answer 1

Small to medium enterprises (SMEs), large

Question 2

What is a multinational corporation?

Answer 2

A company that has branches in many different countries

Question 3

What defines a micro business in terms of number of employees?

Answer 3

> 5

Question 4

What is the employee range for small businesses?

Answer 4

5-19

Question 5

What is the employee range for medium businesses?

Answer 5

20-199

Question 6

What is the employee count for large businesses?

Answer 6

200+

Question 7

What are the legal structures of small to medium businesses?

Answer 7

Sole trader, partnership, private company, public company, franchise

Question 8

What are common sources of finance for small businesses?

Answer 8

Owner, loans, owners’ savings

Question 9

What are common sources of finance for large businesses?

Answer 9

Loans, private shareholders, retained profit, sale of shares

Question 10

How is market share characterized for small businesses?

Answer 10

Small, usually in local area

Question 11

What characterizes the market share of medium businesses?

Answer 11

Based on dominance of geographic region

Question 12

What is the market share like for multinational corporations?

Answer 12

Large

Question 13

What are the geographical spreads for businesses?

Answer 13

Local, national, global

Question 14

What characterizes local businesses?

Answer 14

Serves surrounding area, small/medium size, no position to offer a range of products

Question 15

What characterizes national businesses?

Answer 15

Operates within one country, medium size, branches in multiple countries

Question 16

What characterizes global businesses?

Answer 16

National borders DO NOT represent barriers to trade

Question 17

Give examples of local businesses.

Answer 17

Newsagency, corner store, hairdresser, motel/hotel

Question 18

Give examples of national businesses.

Answer 18

Coles, Westfield

Question 19

Give an example of a global business.

Answer 19

Apple

Question 20

What are the industry sectors of business?

Answer 20

Primary, secondary, tertiary, quaternary, quinary

Question 21

What defines the primary industry sector?

Answer 21

Businesses involved in the collection of raw/natural materials

Question 22

What are examples of the primary industry?

Answer 22

Mining, fishing, farming

Question 23

What defines the secondary industry sector?

Answer 23

Businesses that take raw materials and make it into a finished or semi-finished product

Question 24

What are examples of the secondary industry?

Answer 24

Bakery, car manufacturers, construction

Question 25

What defines the tertiary industry sector?

Answer 25

Businesses that perform a vast range of services for other people

Question 26

What are examples of the tertiary industry?

Answer 26

Retail, transportation, insurance

Question 27

What defines the quaternary industry sector?

Answer 27

Businesses that involve the transfer and processing of information and knowledge

Question 28

What are examples of the quaternary industry?

Answer 28

Computing consultancy, education, stockbrokers

Question 29

What defines the quinary industry sector?

Answer 29

Businesses that include services that have traditionally been performed in the home

Question 30

What are examples of the quinary industry?

Answer 30

Daycare providers, private chefs, maid services

Question 31

What is the legal structure of a sole trader?

Answer 31

Owned and operated by one person, no separate legal entity, unincorporated

Question 32

What are the advantages of being a sole trader?

Answer 32

Complete control, low cost of entry, less government regulation, owner's right to keep all profits

Question 33

What are the disadvantages of being a sole trader?

Answer 33

Unlimited liability for business debts, difficult to operate if sick, need to carry all losses, difficulty in raising finance for expansion

Question 34

What defines a partnership?

Answer 34

Operated by between 2-20 people, no separate legal entity, unincorporated

Question 35

What are the advantages of a partnership?

Answer 35

Low startup costs, shared responsibility and workload, pooled funds and talent

Question 36

What are the disadvantages of a partnership?

Answer 36

Unlimited liability for business debts, possibility of disputes

Question 37

What is a proprietary (private) company?

Answer 37

Most common type in Australia, shareholders must be invited, incorporated

Question 38

What are the advantages of a proprietary company?

Answer 38

Limited liability, easy to transfer ownership, growth potential

Question 39

What are the disadvantages of a proprietary company?

Answer 39

High cost of formation, double taxation, must publish annual report

Question 40

What is a public company?

Answer 40

Shares are listed on Australian Securities Exchange (ASX), at least 1 shareholder

Question 41

What are the advantages of a public company?

Answer 41

High growth potential, easier to attract public finance, limited liability

Question 42

What are the disadvantages of a public company?

Answer 42

High cost of formation, can lose ownership through random buying majority of shares

Question 43

What factors influence the choice of legal structure?

Answer 43

Size, ownership, finance

Question 44

What happens when sales increase and business operations grow?

Answer 44

Business may need to incorporate

Question 45

What is a float in business?

Answer 45

The raising of capital in a company through the sales of shares to the public

Question 46

What is a prospectus?

Answer 46

A document giving details of a company and inviting the public to buy shares in it

Question 47

What is venture capital?

Answer 47

Money invested into small and sometimes struggling business that have the potential to become successful

Question 48

Fill in the blank: Limited liability applies to _______.

Answer 48

incorporated companies

Question 49

Fill in the blank: Availability of capital affects the ability to _______.

Answer 49

incorporate or expand