Unit 1 AOS 1

• What is entrepreneurship?

  The act of starting and operating a new business in response to opportunities, assuming all the risk in the hope of making a profit.
• what is business?

  Any activity conducted by an individual or individuals to produce and sell goods and services that satisfy the needs of society, as well as making profit.
• What is profit?

  What is left after business expenses have been deducted from money earned from revenue.
• What is innovation?

  significantly improving an existing product to include a variety of new features.
• What are some personal motivations behind starting a business?

  ► The desire for financial and personal independence

  ► To make a profit

  ► To fulfil a market need

  ► To fulfil a market social need
• Why is fulfilling a social need motivation for starting a new business?

  The production or selling of goods and services for the purpose of making the world (of the community) a better place. Businesses that gives some of its profit to a social need. Primary focus of a social enterprise is to serve a cause based on community of environmental need.
• What are different sources of business opportunities?

  • global markets
  • innovation and entrepreneurship
  • market opportunities
  • technological development
  • research and development
  • changing customer needs
• What does an entrepreneur do?

  • seeks out opportunities
  • manage some business activities
  • takes calculated financial risks
  • experiences business success
• How does innovation help business?

  • new efficient processes can save time, money and create less waste
  • allows business to grow
  • helps business to adapt to the changing marketplace
  • gives a competitive advantage
  • builds a culture of innovation to encourage creative thinking and problem solving
  • but need to be flexible and open to new ideas
• A market is an area of trade.

  Eg. the Australian non-alcoholic beverage market in which drinks are bought and sold is worth about $7 billion per year
• Market opportunities refers to chances to increase trade caused by the changing trends in a market. The key is to be able to recognise a market trend.
• How do market opportunities help businesses?

  by providing chances to meet the needs and wants of customers in a way that can be profitable. When a business identifies a market opportunity, it means there is a demand for a product or service that is not fully satisfied, or there is a chance to offer something new and valuable.
• Corporate Social Responsibility (CSR) is the idea that businesses should go beyond just making profits and also consider the impact of their actions on society and the environment.
• What is decision-making in business?


  • Decision-making - the ability to identify the options available and then choose a specific course of action from the alternatives.
  • Effective decision-making underlies every aspect of creating and developing a business idea, including identifying opportunities and business planning.
• what is the first step in a decision making process?

  Develop goals — need to clearly state what the desired goal or position is
• What is the second step in a decision making process?

  Outline the facts — all of the facts and information related to the situation need to be outlined, including any circumstances that may cause a problem or issue, or possible obstacles that may prevent the attainment of the desired goal or position
• Market research and initial feasibility studies need to be conducted to determine the business idea’s potential for success.
• What is a feasibility study?

  an assessment of the business idea’s potential for success.
• What is included in a feasibility study?

  • An assessment of the market (demand, potential customers, potential competitors, competitive advantage)
  • A consideration of the operations (plant, equipment, materials, staff and support personnel)
  • An analysis of commercial feasibility (SWOT, production costs, financial resources, forecasted sales and profit)
  • An appraisal of the potential owner’s management ability
  • An understanding if other have tried this idea
• What is market research?

  is a process involving gathering and analysing information concerning a specific market.
• What are the three types of market researching?

  • Identifying what information is needed to make a decision about the potential of the business
  • Gathering relevant information from appropriate sources
  • Analysing and interpreting results, which assist in decision making.
• Why is market research important?

  Market research provides the potential business owner an idea of the market conditions that exist for the proposed product or service.
• What are market conditions?

  Features of a market in which a new good/service is to be introduced, including factors such as potential customers, level of competition, and growth potential.
• Market conditions can be determined through the answers of questions like?

  Is the business concept new or already exists, who will buy, why will they buy, what needs/wants will be satisfied, size of the market, location of market, competitors, what makes it different.
• What does it mean to assess the market in feasibility studies?

  Analysing level and type of demand for the product, who and where potential customers are and why they will buy the product, current and future competitors and their strengths and weaknesses, the competitive advantage of the business.
• Consider of the operations in feasibility studies

  Describing the product that will be sold, resources required, location of the business, legal requirements.
• What is an analysis of commercial feasibility?

  Considering the financial aspects of the business idea such as, how long for the first sale, determination of the price of the product, finance required for start up and operating, forecast of sales, costs, cash flow, profit.
• Appraisal of the potential business owner's management ability:

  Characteristics of being a manager.
• Understanding if others have tried: Finding if anyone else tried the idea, and if they failed, how did they fail.
• What is an economy?


  A system set up to determine what to produce, how to produce, and to whom production will be distributed
• What is economic growth?

  An increase in the real value of goods and services over a set period of time.
• What is exporting?

  Goods and services sold by one country to individuals, businesses or governments in another country with the aim of extending sales and market penetration.
• What is balance of payments (BOP)

  A record of a country's trade and financial transactions with the rest of the world.
• Australia's economic system is the market capitalist economy. (Private buyers and sellers)
• Employed Australians will use the wage they have earned to buy goods and services to meet their needs and wants, supporting business and opening up further opportunities for job creation.
• How do businesses contribute to o tribute to employment and taxation revenue?

  ● Businesses contribute to revenue raised through taxation.

  ● Businesses pay tax, and their employees pay income tax.

  ● Tax is used by the Government to provide goods and services that benefit the whole community.
• How do businesses contribute to economic growth?

  ● Economic growth: occurs when the real value of goods and services increases over a set period of time.

  ● This is measured by the growth of Gross Domestic Product (GDP)

  ● Businesses contribute to the GDP of a country.

  ● GDP: the monetary value of all the finished goods and services produced in a country (e.g. Australia)
• How do businesses contribute to export earnings?

  Exports contribute to Australia's balance of payments (BOP). Favourable BOP exists through more payments coming in than going out. Exporting products creates jobs, boosts incomes, and improve living standards.
• How do businesses contribute to research and development?

  Businesses undertake R&D in order to expand their knowledge of products and processes, develop new products, improve existing products or develop new processes, which drives economic growth, improves quality of life, and standard of living
• social well-being is how well a nations people live.