Business Management

• Entrepreneurship


  The ability to think outside the box and come up with new and innovative ways of seeing things and create a business from this idea. They are willing to take the risk and have the means to create their new business.
• Personal motivation for starting a business

  The reasons behind someone starting a business
• Motivations for starting a business

  • The desire for independence
  • To make a profit
  • To fulfil a market need
  • To fulfil a social need
• Desire for independence


  Includes both decision-making and financial independence. Being your own boss and not being told by someone else what to do. Having money that you have made on your own and have control over.
• Desire to make a profit


  Profit = money made minus expenses. What you have actually made! People assume that by starting their own business, they will make more money than they would working for someone else.
• Desire to fulfil a market need

  Gap in the market. A product does not exist or be accessible so you decide to start a business/make a good or service to fill this gap.
• Desire to fulfil a social need

  Giving back. You may feel that by starting your own business you will help improve society or the community. (corporate) social responsibility which includes meeting society's expectations. Social enterprise – a business that operates like any business but contributes at least 50% of its profits to assist disadvantaged people here or overseas.
• Skills of a business manager

  • Leadership
  • Organisational skills
  • Listening skills
• Skills of an entrepreneur

  • Willingness to learn
  • Showing initiative
  • Being enterprising
  • Determined/never giving up
  • Being prepared to take risks
• Sources of business opportunity

  • Innovation
  • Recognising and taking advantage of market opportunities
  • Changing customer needs
  • Research and development
  • Technological development
  • Global markets
• Innovation


  Coming up with a new idea or seeking or significantly improving an old one
• Recognising and taking advantage of market opportunities

  Market = where buying and selling takes place. Look at changes in the market and takes advantage of them as potential business ideas.
• Changing customer needs


  Responding to different/new things customers want. E.g. new trends, population needs, demand.
• Research and development


  Come up with new ideas during research and development.
• Technological development


  New technology = new business ideas. E.g. automation, apps, online shopping, AI
• Global markets


  Globalisation (operating across the world) = new business opportunities. E.g. more customers, different markets/cultures.
• The importance of goal setting and decision-making in business
• The business concept development process

  1. Initial idea/concept and protect your idea

  2. Do market research

  3. Refine the idea based on the market research results

  4. Do a feasibility study

  5. Write a business plan
• Importance of business concept development

  Understand why it is important to develop your concept/idea
• As the owner starts to develop their idea

  They will need to protect their business concept using patents and trademarks
• New opportunities


  Will mean new developments that may need to be protected from other businesses stealing them
• Market research


  Primary and secondary market research
• Feasibility study


  An assessment of the potential for success of a proposed business idea. It is an important step in assessing whether a business idea is worth pursuing.
• Types of market research

  • What research would work best for different businesses?
• Methods to foster a culture of business innovation and entrepreneurship in a nation

  • Government investment in research and development
  • Council grants for new businesses
  • School-based educational programs in entrepreneurship
  • Creation of regional business start-up hubs
• Internal environment


  The factors a business has control over
• External environment


  The factors a business has little or no control over. Includes the operating environment and the macro environment.
• Types of businesses


  • Sole trader
  • Partnership
  • Private limited company
  • Public listed company
  • Social enterprises
  • Government business enterprises
• Private limited company


  Maximum of 50 shareholders. Usually for a small to medium sized family-owned businesses. Shares can only be sold to people once all the shareholders agree on.
• Public listed company


  Listed on the stock exchange (ASX). Anyone can buy and sell shares. Usually large. Shareholders may be paid dividends- unlimited shareholders.
• Social enterprises


  In the private sector and distribute profit to benefit the community rather than individual shareholders. Like other businesses, they produce goods or services to sell, but redirect surplus into the pursuit of social or environmental goals.
• Government business enterprise


  Government owned and operated, runs profitably, but aims to control costs and sell products and services at a price to cover these costs.
• Factors affecting choice of business structure

  • Is the owner prepared to risk the unlimited liability of operating their business?
  • Will the owner have enough finances, skills and expertise to establish and grow the business?
  • Is the owner prepared to take complete responsibility of the business in exchange for complete control and all profits?
  • Does the lower cost of establishing and maintaining a sole trader outweigh the benefits of incorporation?
• Types of business models

  • Online business
  • Direct-to-consumer business
  • Bricks-and-mortar business
  • Franchise
  • Importer
  • Exporter
• Costs and benefits of purchasing an existing business


  • Advantages of purchasing an existing business
  • Disadvantages of purchasing an existing business
• Costs and benefits of establishing a new business


  • Advantages of starting a new business from scratch
  • Disadvantages of starting a new business from scratch
• Goodwill


  The monetary value attached to the reputation of a particular business. It is the difference in value between the price that a business is sold for and its net asset value. It would include a customer base and the reputation.
• Business resources


  • Natural resources
  • Labour resources
  • Capital resources
• Factors affecting the use of business resources

  • Where will they get their resources?
  • The impact on the environment
  • Do they need training?
  • What skills are needed?
  • What kind of tools are needed?
  • How will they maintain the machinery?
• Types of business locations

  • Home-based
  • Retail/commercial
  • Industrial