Business Terms and Definitions

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Questions and Answers

What does an accountant provide?

Advice on all financial management issues and taxation obligations.

What are angel investors likely to expect?

A return on their capital, as well as taking a role in supporting the business owner.

What is a bank overdraft?

When a bank allows a business or individual to overdraw their account up to an agreed limit for a specified time to help overcome a temporary cash shortfall.

What is bootstrapping?

<p>Starting a business using personal finance or the revenue from the business</p> Signup and view all the answers

What is boycotting?

<p>When a customer refuses to purchase goods or services from a business as a form of protest against the undesirable activities of the business.</p> Signup and view all the answers

What is 'bricks and clicks'?

<p>The business model that offers customers the choice of online shopping as well as shopping at the physical store.</p> Signup and view all the answers

What is 'bricks and mortar'?

<p>The traditional business model that is based on a store with a physical presence, such as those located on shopping strips and in shopping centers.</p> Signup and view all the answers

What is a business entity?

<p>An organization that exists separately to its owner in order to produce and sell goods and services.</p> Signup and view all the answers

What is 'business environment'?

<p>The surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.</p> Signup and view all the answers

What is a 'business model'?

<p>The way in which the business will run its operations to generate a profit.</p> Signup and view all the answers

What consists of 'capital resources'?

<p>The tools and machinery that are used to produce goods or perform services.</p> Signup and view all the answers

What are 'complementary businesses'?

<p>Businesses that sell products which are aimed at the same customers.</p> Signup and view all the answers

What is crowdfunding?

<p>A method of raising finance through appeals for donations via social media and the internet.</p> Signup and view all the answers

What is debt?

<p>The funds provided by banks, other financial institutions, government and suppliers, which must be paid back over time with interest.</p> Signup and view all the answers

What is 'employee retention'?

<p>The ability of a business to keep employees.</p> Signup and view all the answers

What is an 'environmental audit'?

<p>A review of the extent to which a business's activities have an impact on the environment</p> Signup and view all the answers

What is an 'environmental management system'?

<p>A tool for managing a business's environmental impact in a systematic and methodical manner.</p> Signup and view all the answers

What are exports?

<p>Goods and services that are produced in Australia to be sold overseas.</p> Signup and view all the answers

What is an 'external environment'?

<p>Factors over which the business has little control. It may be further divided into two categories: operating and macro.</p> Signup and view all the answers

What is a 'franchise agreement'?

<p>An agreement whereby the franchisor grants the franchisee the rights to use its business name and distribute its goods or services.</p> Signup and view all the answers

What is a 'franchise'?

<p>When a business sells to others the rights to distribute its goods and use the business name.</p> Signup and view all the answers

What is goodwill?

<p>The monetary value attached to the reputation of a business.</p> Signup and view all the answers

What does it mean to be 'incorporated'?

<p>A business that has a separate legal existence apart from its owner(s).</p> Signup and view all the answers

What is 'incorporation'?

<p>The process that a business goes through to become a registered company and a separate legal entity.</p> Signup and view all the answers

What consists of 'labor resources'?

<p>The people that provide their skills, effort and knowledge to the business.</p> Signup and view all the answers

What is leasing?

<p>A way of financing the purchase of assets without a large initial capital outlay.</p> Signup and view all the answers

Who is the 'lessee'?

<p>The person or business to whom a lease is granted.</p> Signup and view all the answers

What is 'limited liability'?

<p>When the shareholders of a company cannot be held personally responsible for the debts of the business.</p> Signup and view all the answers

What is the 'macro environment'?

<p>The broad conditions and trends in the economy and society within which a business operates.</p> Signup and view all the answers

What is manufacturing?

<p>A business that produces physical goods, often in a factory. These goods are then sold to wholesalers or directly to retailers who then sell the good on to customers at a marked-up price.</p> Signup and view all the answers

What is a mortgage?

<p>A loan on a property, secured by the property of the borrower (the business).</p> Signup and view all the answers

What consists of natural resources?

<p>Items the business uses that come from the natural environment. Examples include land, water and raw materials.</p> Signup and view all the answers

What is the 'operating environment'?

<p>The specific outside stakeholders with whom the business interacts in conducting its business; it is sometimes called the task environment.</p> Signup and view all the answers

What is a partnership?

<p>An unincorporated business structure with a minimum of 2 and a maximum of 20 owners.</p> Signup and view all the answers

What is a 'private limited company'?

<p>An incorporated business with a minimum of 1 shareholder and a maximum of 50 non-employee shareholders.</p> Signup and view all the answers

What is a prospectus?

<p>A legal document that provides details about investment in the company.</p> Signup and view all the answers

What is a 'public listed company'?

<p>An incorporated business with a minimum of one shareholder (and no maximum), and whose shares are openly traded on the Australian Securities Exchange.</p> Signup and view all the answers

What are 'resources'?

<p>The people and objects that are needed for the business to function properly.</p> Signup and view all the answers

What is 'search engine optimisation (SEO)'?

<p>The strategies used to increase the number of visitors to a website by making it more visible on search engines.</p> Signup and view all the answers

Who are shareholders?

<p>The owners of a company who are entitled to a share of its profits.</p> Signup and view all the answers

Who is a 'silent or sleeping partner'?

<p>One who contributes financially to a business but takes no part in the running of the business.</p> Signup and view all the answers

What is a 'sole trader'?

<p>A business owned and operated by one person.</p> Signup and view all the answers

What does a solicitor provide?

<p>A professional who provides advice on legal matters such as business formation, registration, contracts and legislation.</p> Signup and view all the answers

What is 'staff morale'?

<p>The general level of satisfaction and wellbeing of employees.</p> Signup and view all the answers

Who is a 'subcontractor'?

<p>A person that is not directly employed by the business but has been contracted to perform certain tasks.</p> Signup and view all the answers

What are 'terms of finance'?

<p>The amount of the repayments and frequency at which they must be made.</p> Signup and view all the answers

What is wholesale?

<p>A business that sells large volumes of goods to retailers. While wholesalers are increasingly selling direct to the public, they offer heavily discounted prices on bulk purchases such as those made by retailers.</p> Signup and view all the answers

What is 'working capital'?

<p>The funds available for the short-term financial commitments of a business.</p> Signup and view all the answers

Flashcards

Accountant

A professional providing advice on financial management and taxation.

Angel Investors

Individuals/businesses investing in new businesses, expecting returns and supporting the owner.

Bank Overdraft

Bank allows overdraft to overcome temporary cash shortfall.

Bootstrapping

Starting a business with personal finance or revenue.

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Boycotting

Refusing to purchase goods/services from a business due to disapproval.

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Bricks and Clicks

A business model offering online and physical store shopping options.

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Bricks and Mortar

Traditional business model with a physical store presence.

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Business Entity

Organization separate from its owner to produce and sell goods/services.

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Business Environment

Conditions surrounding business operations, internal and external factors.

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Business Model

How a business runs its operations to generate profit.

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Business Plan

Written statement of business goals, objectives, and plans.

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Capital Resources

Tools/machinery to produce goods or perform services.

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Crowdfunding

Fundraising through donations via social media.

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Debt

Funds from banks, institutions, government, or suppliers that must be paid back.

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Employee Retention

A business's ability to keep employees.

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Environmental Audit

Reviewing a business's impact on the environment.

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Equity

Funds contributed by the owner to start and build the business.

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Exports

Goods/services produced in Australia for overseas sale.

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External Environment

Factors outside the business's control; operating and macro.

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Franchise Agreement

An agreement granting rights to use a business name and distribute its goods.

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Study Notes

  • Accountant: A professional offering advice on financial management and tax.
  • Angel Investors: Individuals or firms investing in new businesses, often seeking a return and a role in support.
  • Bank Overdraft: A bank's allowance for a business or person to overdraw an account up to a limit for a period to address cash shortfalls.
  • Bootstrapping: Launching a business using personal funds or business revenue.
  • Boycotting: Refusing to buy goods/services from a business as protest.
  • Bricks and Clicks: A business model providing both online and physical store shopping options.
  • Bricks and Mortar: A traditional business with a physical store presence.
  • Business Entity: An organization legally separate from its owner, producing goods and services.
  • Business Environment: Conditions surrounding a business, categorized as internal and external.
  • Business Model: The method a business uses to run its operations to make profit.
  • Business Plan: A written document outlining a business's goals, objectives, and action steps.
  • Capital Resources: The tools and machinery used by a business to produce goods or services.
  • Complementary Businesses: Businesses selling products that target the same customer base.
  • Crowdfunding: Raising capital through online donation appeals, often via social media.
  • Debt: Funds from banks, institutions, government, or suppliers that must be repaid with interest.
  • Employee Retention: A business's ability to keep its employees.
  • Environmental Audit: An evaluation of a business's environmental impact.
  • Environmental Management System: A tool for managing a business's environmental impact in a systematic way.
  • Equity: The funds an owner invests to start and grow a business.
  • Exports: Goods/services produced in Australia for overseas sale.
  • External Environment: Factors outside a business's control, divided into operating and macro categories.
  • Franchise Agreement: A contract granting a franchisee rights to use a franchisor's brand and distribute goods/services.
  • Franchise: When a business sells the rights to distribute its goods and use the business name to others.
  • Franchisee: A business licensed to operate under an existing brand and distribute its goods/services.
  • Franchisor: The owner of an original business concept, licensing its brand and services to others for royalties/fees.
  • Goodwill: The monetary value of a business's reputation.
  • Imports: Goods/services produced overseas, sold to Australian consumers.
  • Incorporated: A business with a separate legal existence from its owner(s).
  • Incorporation: The process of registering a business as a company and separate legal entity.
  • Internal Environment: Factors within a business's control, also known as the micro environment.
  • Labour Resources: The skills, effort, and knowledge provided by people to a business.
  • Leasing: Financing asset purchases without significant upfront capital.
  • Lessee: The person or business granted a lease.
  • Lessor: The asset owner who grants a lease.
  • Limited Liability: Shareholders of a company not being personally liable for the company's debts.
  • Macro Environment: Broad economic and societal conditions and trends influencing a business.
  • Manufacturing: Producing physical goods, often in a factory, for sale to wholesalers/retailers.
  • Mortgage: A loan secured by the borrower's property.
  • Natural Resources: Materials from the natural environment used by a business (e.g., land, water, raw materials).
  • Operating Environment: External parties a business interacts with, also known as the task environment.
  • Partnership: An unincorporated structure with 2-20 owners.
  • Planning: A process to achieve an objective.
  • Private Limited Company: An incorporated business with 1-50 non-employee shareholders.
  • Prospectus: A legal document detailing investment information in the company.
  • Public Listed Company: An incorporated business with at least one shareholder, shares traded on the stock exchange.
  • Resources: The people and objects needed for business operations.
  • Retail: Selling goods/services to customers at a higher price than production costs, e.g. Kmart and Target.
  • Search Engine Optimisation (SEO): Strategies to improve website visibility.
  • Shareholders: Company owners entitled to a share of profits.
  • Silent or Sleeping Partner: Financial contributor without involvement in business operations.
  • Sole Trader: A business owned and operated by one person.
  • Solicitor: A professional who provides advice on legal matters.
  • Staff Morale: The general satisfaction/wellbeing of employees.
  • Stakeholders: Groups/individuals with an interest in a business.
  • Subcontractor: Someone contracted to perform tasks without being directly employed.
  • Terms of Finance: Repayment amounts and frequency.
  • Unlimited Liability: Owner is personally responsible for all business debts.
  • Wholesale: Businesses selling large volumes of goods to retailers at discounted prices.
  • Working Capital: Funds available for short-term financial commitments.
  • Zoning: Local council allocation of land for specific uses.

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