Questions and Answers
What is the definition of a small business?
A business that employs up to 19 people.
What is the employee range for a medium-sized business?
20 to 199 employees.
What classifications can businesses have based on their legal structure?
A small business is defined as one that employs up to 15 full-time employees.
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Which of these is NOT a type of small business?
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A small business can be classified as a __________ or a partnership without employees.
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What is the small business revenue threshold adjusted to?
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What key area do SMEs contribute significantly to?
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Study Notes
SMEs in the Australian Economy
- SMEs play a key role in the Australian economy, and anyone can start a business if they have the desire and determination to be their own boss.
- To be successful, a new business owner must develop a unique quality that gives their business a sustainable competitive advantage.
Definition of SMEs
- A small business is defined as one that employs up to 19 people, including:
- Non-employing businesses (sole proprietorships and partnerships without employees)
- Micro businesses (up to 4 people)
- Other small businesses (5-19 people)
- A medium-sized business employs between 20 and 199 people.
- A large business employs 200 or more people.
Alternative Definitions of SMEs
- The Fair Work Commission defines a small business as one with up to 15 full-time employees.
- Other definitions are based on:
- Value of production or turnover
- Asset value
- Total revenue (e.g. earning less than $50 million per year)
Legal Structure of SMEs
- SMEs can be classified as unincorporated or incorporated entities.
- Unincorporated entities:
- Do not have a separate legal identity from their owners or members
- Examples: sole traders, partnerships
- Incorporated entities:
- Have gone through a formal legal process to become a distinct legal entity separate from their owners or members
- Examples: private companies, public companies, trusts, religious organisations, government-owned businesses
- Some SMEs can be both unincorporated and incorporated, with owners who manage and supply capital and make decisions.
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Description
This quiz covers the role of Small and Medium-sized Enterprises (SMEs) in the Australian economy, factors contributing to their success and failure, and what it takes to become a successful business owner.
