Business Notes 2024 PDF

**\ LESSON ONE** - Business is **multifaceted** - Has [representation] in every aspect of society including **individuals, community and government** - *Responsive to environmental changes* such as **emerging technologies, globalisation, sustainability, resources, economy & soci...

**\ LESSON ONE** - Business is **multifaceted** - Has [representation] in every aspect of society including **individuals, community and government** - *Responsive to environmental changes* such as **emerging technologies, globalisation, sustainability, resources, economy & society** **[The Business Life Cycle]** - A **representation** of the [series of stages] that can be applied to the duration of activity that a business conducts **LESSON TWO** +-----------------+-----------------+-----------------+-----------------+ | Stage | Characteristics | Challenges | Strategies | +=================+=================+=================+=================+ | **SEED** | - Business is | - Time, | - Complete a | | | just a | energy, | business | | | thought/ide | money | plan -- | | | a | required | clear | | | | | vision, | | | - Initial | | goals & | | | testing, | | objectives | | | research | | | | | into the | | - Marketing | | | industry, | | plan | | | feedback | | | | | from | | - Detailed | | | friends, | | financial | | | family or | | plan | | | industry | | | | | specialists | | | | | helps to | | | | | develop or | | | | | refine an | | | | | idea | | | +-----------------+-----------------+-----------------+-----------------+ | **START-UP** | - Hiring | - Attracting | - Responding | | | employees | and | to feedback | | | | establishin | | | | - Commences | g | - Being | | | trading | a customer | adaptable | | | | base | | | | - Testing of | | - Stakeholder | | | the | - Ensuring | engagement: | | | products | cash flow | supplies, | | | | | sources of | | | | | support & | | | | | advice, | | | | | governmenta | | | | | l | | | | | development | | | | | offices | +-----------------+-----------------+-----------------+-----------------+ | **GROWTH** | - The | - Not to get | - Ensuring | | | movement of | too | quality | | | a business | comfortable | practices & | | | into either | in the | involvement | | | an | market | in | | | established | | recruitment | | | state or an | - New | process | | | expansion | competitors | | | | state | , | - Clearly | | | | completing | establishin | | | | demands on | g | | | | time | business | | | | | processes & | | | | - Relinquish | expectation | | | | areas of | s | | | | control to | | | | | reliable | - Invest in | | | | staff | research | | | | | and & | | | | | development | | | | | & staff | | | | | professiona | | | | | l | | | | | development | +-----------------+-----------------+-----------------+-----------------+ | **MATURITY** | - Generally | - Environment | - Must remain | | | the longest | al | competitive | | | stage a | factors | | | | business | | - Cut costs | | | will | - Changes in | | | | experience, | economy, | - Consider | | | reflects | society or | outsourcing | | | dominating | market | | | | presence of | conditions | | | | the | | | | | business in | - Increasing | | | | its market | competition | | +-----------------+-----------------+-----------------+-----------------+ | **POST-MATURITY | - The | - Degerming | - Adopt | | ** | business | real value | marketing | | | may head in | in an exit | research to | | | one of | option | satisfy | | | three | | unmet | | | directions: | - Psychologic | demands | | | | al | | | | | challenges | - Marketing | | | | of business | strategies | | | - Steady | loss on | | | | state | owners | | | | | | | | | - Decline | | | | | | | | | | - Renewal | | | +-----------------+-----------------+-----------------+-----------------+ **LESSON THREE** [Fundamentals of business] - A business exists to provide goods and services to satisfy consumer needs and wants - Responsive to environmental changes such as emerging technologies, globalisation and customer behaviour Examines the fundamentals of a business including: - Business structures - Strategic planning - Business goals and objectives **BUSINESS:** An economic activity that provides a good or services to satisfy the needs and wants of consumers. **Innovation and competitive advantage** **Innovation:** Involves creating new products, services or processes that improves efficiency, solve problems or meet customer needs in unique ways **Competitive advantage:** What sets a business apart from its customers LESSON FOUR **[Key features of a business]** - Transforms goods and services, in exchange for money, to reach a desired outcome **[Goods and services]** - [Goods:] Tangible products, meaning they are something in physical form (may include clothes) - [Services:] Services are tangible or invisible (may include medical services, i.e. doctors) **[Exchange]** - Refers to the transfer of something of value from one party to another Purpose of the business = positive outcomes Profit: The financial gain made by the business after expenses Stakeholders: Anyone who is interested or has a concern in a business and how it operates +-----------------------------------+-----------------------------------+ | Internal Stakeholders (DIRECT | External Stakeholders (DOES NOT | | RELATIONSHIP) | DIRECTLY WORK FOR A BUSINESS) | +===================================+===================================+ | - Employees | - Suppliers | | | | | - Managers | - Society | | | | | - Owners | - Government | | | | | | - Creditors | | | | | | - Shareholders | | | | | | - Customers | +-----------------------------------+-----------------------------------+ LESSON FIVE **[Business types]** - Profit-based businesses - Not-for-profit businesses - Government-owned corporations (GOC) - Government-business enterprises (GBE) [Not-for-profit businesses]: Does not provide a profit/benefit for the person operating the business [Government-owned corporations:] Established by a government in response to a need in a community [Government-business enterprise:] A Commonwealth company -- established to fulfil a Commonwealth-Government recognised purpose LESSON SIX ***[PART ONE]*** **[Four main business structures]** - Sole trader - Partnership - Private company - Public company **[Sole trader]** - A business owned and operated by one person, small-scale, inexpensive to establish. - Owner provides all the capital, takes on all the responsibility (can employ other people to the business) - Bound by unlimited liability (owner is personally responsible for the debts of the business) Features: - Simple to establish + easy to operate - Full control of the business - Able to employ people to help operate the business - Not a separate entity (unlimited liability) - Relatively simple to change the business structure as it grows +-----------------------------------+-----------------------------------+ | Advantages | Disadvantages | +===================================+===================================+ | - Owner receives all profits | - Ceases to operate if the | | | owner dies | | - Minimal legal & government | | | regulations | - Responsible for all debts of | | | the business | | - Start-up costs are low | | | | - Difficult to operate if the | | - Simplest form of ownership | owner is sick/absent | | | | | - Tax is on the owner's income, | - Finances for the business are | | not the business | limited to the owner's | | | financial situation | | | | | | - Owner needs to be | | | multi-skilled and perform a | | | wide variety of tasks | +-----------------------------------+-----------------------------------+ **[Partnership]** - Requires a minimum of two partners and most have a maximum of twenty - Owners are responsible for the debts of a business (unlimited liability) - Establish a formal agreement (contract) **→** outlines how the business operates (conditions) Features: - Owners share control & management of the business - Not a separate entity **→** owners are personally responsible for all debts of the business - Can employ people to help operate a business +-----------------------------------+-----------------------------------+ | Advantages | Disadvantages | +===================================+===================================+ | - Shared responsibility & | - Partnerships may be dissolved | | management | if a partner dies | | | | | - Start-up costs are low | - Difficulty in changing | | | ownership | | - Greater capacity to raise | | | financial funding | - Profits of business must be | | | shared | | - Minimal legal and government | | | regulations | - Possibility of conflict | | | between partners | | - Tax is on the owners' income, | | | not the business | - Owners are responsible for | | | the debts of the business | | | (unlimited liability) | +-----------------------------------+-----------------------------------+ ***[PART TWO]*** **[Company]** - Can incur debt, sue and be sued - Has the same rights as a natural person - A separate legal entity - A more complex business structure - Owners = shareholders - Have limited liability **→** liability is limited to the value of their shareholding - Operations are controlled by directors and owned by the shareholders **[Private Company]** - Usually small to medium-sized, family-owned business - Proprietorship is restricted to a maximum of 50 owners (shareholders) - Must have 'Proprietary Limited' in its name (abbv. to Pty Ltd) **[Public Company]** - A large business that is publicly listed on the Australian Stock Exchange (ASX) - Minimum of five shareholders, no upper limit to amount of stockholders - Shares are freely traded on the stock exchange - Invites members of the public to purchase shares in the business through issuing a prospectus - Contains 'Limited' (Ltd) in its name **[Advantage & disadvantages of a company]** +-----------------------------------+-----------------------------------+ | Advantages | Disadvantages | +===================================+===================================+ | - Ownership is easily | - Complex to establish | | transferred | | | | - Higher degree of government | | - Separate legal entity = | control | | limited liability | | | | - Profits are divided to owners | | - Greater source of management | according to the number of | | expertise | shares held | | | | | - Greater capacity to raise | - Expensive to establish | | financial funding (capital) | | | | - Legal obligation to report | | - Greater spread of risk | financial situation publicly | +-----------------------------------+-----------------------------------+ LESSON SEVEN **[Sizes of a business]** **Attributes** **Micro** **Small** **Medium** **Large** ------------------- ---------------------------------------------------- ---------------------------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------------------------------------------- *Industry* Bakeries, tradespeople Bakeries, tradespeople Manufacturers, hotel chains Supermarkets, banks *Legal structure* Sole trader Sole trader, partnership Partnership, private company Public company, government-owned corporations *Employees* Less than 5 full-time employees Less than 20 full-time employees Less than 200 full-time employees 200+ full-time employees *Market share* Very small market share, focuses on the local area Small market share (not a leader in the market), focuses on the local area A leader in market share, operates on a national level Significant portion/majority on the market share, operates on national/international level LESSON EIGHT **[SWOT]** **Strategic planning:** A management tool that is used to set priorities for the future of a business [Internal environment]: *Strengths & weaknesses* [External environment]: *Opportunities & threats* **[Strengths]** -- *Assists and distinguishes the business* **(INTERNAL)** - Having a unique or popular product and/or service - **[Gaining profit]** - **[Experienced employees/managers/owners]** - **[Successful marketing campaigns]** - Having a multitude of stores - Good quality of the product and/or service - Good customer service **[Weaknesses]** -- *Hinders a business from performing at its optimum level* **(INTERNAL)** - **[Having a faulty product]**/bad quality product - **[Loss of profits]** - Having a lack of capital - Inexperienced employees/managers/owners - **[Poor customer service]** - Having a lack of resources: marketing/technology/stores/equipment - Slow operations **[Opportunities]** -- *Elements that can give the business a competitive advantage* **(EXTERNAL)** - Expanding operations/stores - **[Collaborating with other businesses/]**partners - **[Creating a new product]** - Using a new media campaign - Engaging with social media **[Threats]** -- *Elements that can negatively impact on the performance of a business from an outside factor* **(EXTERNAL)** - A decline in the industry the business operates in - **[Increased competition]** - **[Environmental threats e.g. COVID-19]** - High interest rates - Change in consumer habits