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=The Business Environment=

//This is the class Wiki for the yr11-12 BSSS unit, **Small Business 0.5 (T)**.// This wiki is a forum for class notifications, discussions, resources, glossaries, links and other extras.

Term 2 continues at thebusinessplan.wikispaces.com
Another page of interest is ABLE: http://ableltc.wikispaces.com which is another Business website based at Lake Tuggeranong College. It will be necessary to request a membership of the site.

Note that from 2012 this unit is combined with **The Business Plan 0.5 (T)** to form the semester unit **Small Business and the Business Plan 1.0 (T).** //Common abbreviations: SMH ([|Sydney Morning Herald]), CT ([|Canberra Times])// toc

=Recently updated pages=

=Assessing Sources of Information= //Lesson plan 5 April 2012//
 * ~ Page (no link = this page) ||~ Date updated ||
 * Small Business: Dentail chain || 30-3-2012 ||
 * Key Considerations in Establishing a Business || 22-3-2012 ||
 * Pricing strategies || 15-3-2012 ||
 * Business Failure || 22-3-2012 ||
 * Interface Flor || 9 March 2012 ||
 * Business Networking || 8 March 2012 ||
 * Business Cycle -- Product Life Cycle || 7 March 2012 ||
 * Multitasking, Marketing, Business Profile || 2 March 2012 ||
 * SMART marketing goals, National Business Names Register || 28 Feb 2012 ||
 * Entrepreneurs, Aluminium industry, Insolvency || 22 Feb 2012 ||
 * Legal Structures, Stakeholders || 21 Feb 2012 ||
 * Other pages of interest || 17 Feb 2012 ||
 * The Generations || 17 Feb 2012 ||
 * Public Databases || 16 Feb 2012 ||
 * SWOT analysis || 14 Feb 2012 ||
 * Business Renewal: MySpace || 14 Feb 2012 ||
 * Lesson 14-2-2012: Environments of Business || 14 Feb 2012 ||
 * Lay-bys back in style amid consumer caution || 9 Jan 2012 ||
 * Customer Service || 22 Dec 2011 ||
 * The Business Cycle || 21 Dec 2011 ||
 * Business Failure || 5 April 2011 ||
 * Alternative business models || 4 April 2011 ||
 * Online business || 5 April 2011 ||
 * Currency and the Australian Dollar || 31 Mar 2011 ||
 * Employment || 31 Mar 2011 ||
 * Entrepreneurs || 30 Mar 2011 ||
 * Legal structures of business || 25 Mar 2011 ||
 * The Business Cycle || 25 Mar 2011 ||
 * Business scams || 23 Mar 2011 ||
 * Industry definitions || 23 Mar 2011 ||
 * Business Failure || 11 Mar 2011 ||
 * Business and Consumer Confidence || 11 Mar 2011 ||

=What's On This Week?=

[|A frenzy of consumerism]
//"...consumerism grants people a taste of the good life -- televisions, cars, electrical goods, houses, luxury items, holidays -- and they want more of it. But that stuff can only be financed by working more...at any price."//

[|Robots and Robber Barons]
Paul Krugman, winner of the Nobel Prize for Economics, notes that although US profits have surged, workers aren't sharing the benefits. // "Why is this happening? As best as I can tell, there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power. Think of these two stories as emphasizing robots on one side, robber barons on the other." NY Times 9-12-2012. //

Small Business: Dentail chain
"With an estimated $90-million fortune, one might expect Daryl Holmes would spend his morning chasing the next big deal, gracing the finance pages, or hobnobbing with business stars. Instead, the registered dentist spent a recent morning in surgery fixing a 93-year-old's teeth." See the [|article]in //SMH Small Business//

Business Failure
What happens to a business when it can no longer pay its debts? //More on the Business Failure page.// > Only hours beforehand Michael James, director of Air Australia, had emailed staff to say it was "[|business as usual]." //Use the above links to respond to these questions. Include examples and evidence to support your views.//
 * [|David Jones in trouble]//SMH 21-3-2012//
 * Air Australia collapsed, leaving staff and passengers stranded.
 * [|WOW Electrical is in liquidation]//CT 28-2-2012//
 * 1) For each of the businesses mentioned above, perform a SWOT analysis.
 * 2) What do you see as the key problems facing each business?
 * 3) Recommend a course of action that might help to turn the business around (assuming the business can be saved!).

Establishment options
[|What's wrong with retailing?]//SMH My Small Business 10-10--2011// [|Jewellery business offers a lot of charms]//CT 21-3-2012// //Rhonda Thatcher wanted to start her own business; she bought a run-down existing business, and 3 years later became franchisee for Pandora, a Danish jewellery manufacturer.// Answer the following questions, giving examples and reasons in your response:
 * New,** **Existing,** **Franchise**
 * 1) Perform a SWOT analysis for this business.
 * 2) According to Rhonda Thatcher, what were the main challenges in starting and expanding her business?
 * 3) Why did she choose to buy an existing business rather than start up from scratch?
 * 4) What were her reasons for choosing the Pandora line of products?
 * 5) What support does the franchisor (Pandora) provide to the business?
 * 6) What are Thatcher's plans for expansion?
 * 7) Is this business likely to succeed? Explain your answer, using specific examples.
 * 8) Make a recommendation for a future business opportunity that this business might find profitable. Give reasons for your response, supported by evidence.

Location factors
//Use these articles in answering the following questions. Remember to use examples and provide reasons in your response:// [|Choosing a location for your business]//Entrepreneur 20-4-2006// [|Small business: location, location, location] [|Your small business location: how to choose the best one] //Claude Whitacre// And finally...a piece of financial advice to those people "[|trapped in negative equity]" -- who have bought a house which is now worth less than they owe on it.
 * Visibility,** **Cost,** **Proximity to suppliers,** **Customers,** **Support Services**
 * 1) According to the above articles, list the factors that influence the decision on locating a small business.
 * 2) Perform a SWOT analysis for establishing a new toy & gift shop in the Tuggeranong Hyperdome.
 * 3) Using your SWOT analysis and the articles, decide on a location for the new business. What factors influenced your decision, and why?
 * 4) Suggest a way in which the new business can establish itself and eventually expand. Find a location for a new outlet for the business, and explain why you have chosen it.

Capital & Finance
//Financing and cash flow are major reasons for business failure, particularly in small businesses.// [|10 reasons to build business credit for your startup in 2012] [|Creative ways of raising money] [|Finance & Cash-flow] [|Debt recovery]
 * Source,** **Cost,** **Gearing**
 * 1) Explain 3 reasons why it is useful for a new business to establish lines of credit.
 * 2) Come up with 3 novel ways of raising money for a small business: 2 from the above links, and another that is your own idea or one that you have heard of elsewhere.
 * 3) Why is cash flow important to a business? How can a business fail even if it still has assets (value of things owned) greater than liabilities (value owed to someone else)?
 * 4) How can a business prevent itself from holding bad debts (money owed that is very difficult to collect)? Describe 3 ways in which bad debt can be avoided, or can be recovered. What are the advantages and disadvantages of each?

Legal Factors
The NSW government's [|Small Business Toolkit has a set of short videos]introducing: Business registration, licences and permits; Patents -- managing intellectual property (IP), protection and commercialisation of IP; debt recovery
 * Business registration,** **Zoning,** **Health Regulation,** **Competition & Trade Practices (Competition & Consumer Act 2010, formerly Trade Practices Act 1974),** **Patents**
 * 1) What is intellectual property (IP)? Why is it important to a small business, and why must it be protected?
 * 2) Identify and explain 3 problems in protecting IP in the modern world.
 * 3) What steps can a small business take to protect IP?
 * 4) Name ONE difficulty in commercialising a business idea or invention? How can this difficulty be overcome?

Establishing Supply & Distribution Networks
[|The $62 million man] [|Operations & Supply Chain] [|Inventory management]

Employment of Staff
[|HR & Employee management] [|Spot bad employees before they're hired]
 * 1) Describe six different types of employment.
 * 2) List the various costs involved in employing staff. Which of these is likely to make up the majority of staffing costs?
 * 3) Describe 3 ways in which the recruitment process can avoid hiring "bad" employees.
 * 4) Give an example of where a "bad" employee in one workplace might be "good" elsewhere.
 * 5) What is the responsibility of management to select and develop employees with the right skills for their workplace? Who pays the cost for employees who fail to fit into a workplace?

Outsourcing
[|Introduction to supply chain management] [|Supply chain partnerships] [|Supply chain management strategies -- outsourcing] [|Total quality management (TQM)]
 * 1) What is a supply chain? Why is it important to a business?
 * 2) What problems can arise in a supply chain?
 * 3) Describe ONE way in which a supply chain be made more efficient (work more smoothly and at lower cost) and effective (meet the needs of the business).
 * 4) What is outsourcing? In what circumstances is outsourcing effective? When is it less effective?
 * 5) In one paragraph (50 words), describe the concept of Total Quality Management (TQM).

Taxation and On-Costs
[|Taxation, superannuation & other worker entitlements, business taxes]
 * Federal, State, Territory taxes; S****uperannuation;** **Leave Loading**
 * 1) Find and list as many as you can of the following: Federal (Commonwealth), State/Territory and local **taxes, rates and charges**.
 * 2) Which ONE of these taxes, rates and charges make up the majority of costs to most small businesses?
 * 3) What is superannuation? Why does the employer pay a proportion of superannuation?
 * 4) List THREE other worker entitlements that may impose a cost on a small business.

=Term 1 Exam: Practice Questions=

=Current Work: What's on This Lesson?=

Pricing Strategies 15-3-2012
//How does a business decide what price to place on a good or service?// //A quick overview of only a few possible pricing models.//

Consider the pricing of 3 products, services or combinations. For each, answer the following. Give evidence and explanations for your reasoning:
 * Exercise**
 * 1) Explain what pricing strategy is being used, and describe a customer that this pricing strategy will attract.
 * 2) Under what circumstances is this pricing strategy effective / ineffective?
 * 3) Where or when will this strategy be less effective?
 * 4) What pricing is used by competitors in the same or similar market?

Interface Flor 13-2-2012
//An excellent exercise from the redoubtable Stephen Barnard on Interface Flor, an unorthodox carpet company:// Ray Anderson (founder & Chairman of Interface Flor) on [|the Business Case for Sustainability]

Business Networking
One of your most valuable resources as a business owner or manager is a network of contacts. Local business organisations can put you in touch with people who have done it before and are willing to help as mentors or partners. They also run training on worthwhile topics for small business: [|ACT Chamber of Commerce]

Business Profile 5-6 Mar 2012
BizEd has two examples of business profiles for [|Boots UK], a pharmacy and beauty retailer: [|Boots] and [|old Boots]. Use these profiles to get an idea of what your assignment business profile should look like.
 * 1) Note the various sections in each profile and the business language used. Adapt these for use in your own assignment.
 * 2) Consider the old Boots profile to be a first draft attempt at the final Boots profile. Note particularly the questions asked in the old Boots profile, and the amount of information given in the answer.
 * 3) Be aware that you are expected to provide justification (either referencing or logical argument) to support any statements you make in the assignment.
 * 4) **In academic writing, your opinion is judged by the weight of evidence you bring to its support.** A significant portion of the grade for this assignment will be assigned for good academic practice: clearly outlined and logical argument, strong evidence, clear referencing and critical use of reference sources.
 * 5) //Referencing is to follow Harvard style (Chicago or APA styles are acceptable alternatives).//

Marketing 5-6 Mar 2012
For the marketing section of your business analysis, use the [|7 Ps of Marketing] and [|Marketing Mix](follow the links for further details). Include the following sections: [|An example applied to RyanAir], the budget airline.
 * Price
 * Product
 * Promotion
 * Place
 * People
 * Physical environment
 * Process

Multitasking 1-2 March 2012
//Using the links below, answer the questions in 50 words each. Include 3 examples that support your answer.// **Question 1: Are human beings able to multitask efficiently (work effectively on more than one thing at the same time)? Why or why not?** __Evidence__:
 * Question 2: Are some people better at multitasking than others? What evidence is there for your answer?**
 * Question 3: Is multitasking more or less stressful than working on a single task at a time? Why / why not?**
 * Stanford University: [|study on multitasking]and [|new research]
 * [|Multitaskers bad at multitasking]
 * [|Multitasking brain divides and conquers, to a point]
 * [|Think you're multitasking? Think again.]
 * [|Multitasking: Switching Costs]
 * [|Multitasking is counterproductive]
 * (Your own evidence or links that you have discovered)

National Business Names Register
ASIC (Australian Securities and Investment Commission) maintains a [|national register of business names]. This also lists additional details such as ABN, former names, business address and so on.

SMART marketing goals 28-2-2012
[|SMART marketing objectives] SMART objectives are: Specific Measurable Achievable Realistic Timely

[|Limited Liability: The Dark Side]
What happens if a limited liability company does something bad, then ceases to exist? That's exactly the case with Eastern Star Gas, which devastated parts of the Pilliga in western NSW, then last November was gobbled up by Santos Mining. Who's responsible? "Not us!" says Santos. And since Eastern Star Gas doesn't exist anymore...once again, it might be //Taxman to the rescue!//

Using online resources such as the [|Australian Competition & Consumer Commission] and [|Liability and Online Shopping], Research and write down the **advantages and disadvantages of limited liability** for:
 * 1) The company itself?
 * 2) Company owners / shareholders?
 * 3) Managers within the company?
 * 4) A person interested in committing a criminal fraud (deception in order to steal valuables, usually money)?
 * 5) Employees of the company?
 * 6) Creditors (those who have loaned money to the company)?
 * 7) Debtors (those who owe money to the company)?
 * 8) Individual customers?
 * 9) The general public, particularly taxpayers?

Entrepreneurs 23-2-2012
[|Aussies' fix for 'stagnated' email]SMH 21-2-2012 An interesting article about three young Australians who quit Google to create their own email-management application. There are also some observations about the way in which Google is managed and the frustrations of working in the Sydney "satellite" office.
 * 1) Explain the reasons that the three workers quit Google.
 * 2) What advantages are there in starting a new business?
 * 3) What are some problems/disadvantages in starting a new business?
 * 4) Do the three workers have a range of skills and experience that would help them to succeed?
 * 5) What other skills will they need, and how will they access such skills?
 * 6) Evaluate the new business (Fluent) and give your opinion on whether or not it has a long-term future. Explain your reasons.

Joe Button
An [|interview with Melissa Lee], co-founder of online fashion retailer [|Joe Button].

[|A great idea is just a starting point]
Naomi Simson, founder of gift voucher website RedBalloon, says that passion is the key to a successful business startup.

Why I sold to Amazon
Three small start-up businesses tell [|why they sold to Amazon.com]. The three have very different experiences, and gave up differing degrees of control over their businesses.

[|Invest in your skill, don't sell it]
SMH 23-2-2012 //Phillip di Bella started his coffee business 10 years ago with $5000 of his own money, a borrowed roasting machine and a determination to use his brains, not his wallet, to get ahead. It forced me to be creative, he says. The formula worked. At 36, he is climbing up the ranks of BRW's Young Rich List with a personal fortune estimated at $70 million.//

Business Scams: The dark side of the entrepreneur
Visit this page to read about business ideas that are so good, they're criminal...

Legal Structure 21-2-2012
What legal arrangements are best for your business? What are the advantages and disadvantages of being a sole trader, partnership, proprietary limited or limited liability public company? Details at Legal Structures of Business page.

Stakeholder Analysis
See Exercises and notes on the Stakeholders page.

SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
YouTube has a short [|tutorial on SWOT analysis].

The Generations
[|Generation X and Y employees]

Public Databases
Follow the link to a list of public databases of business information. I will continue updating this over the year -- if you find something useful, we'll put it up.

Australian Bureau of Statistics
Using the ABS databases of statistics, find evidence to support the following business ideas:
 * 1) The best location in the ACT to start a toy store
 * 2) A home hairdressing service for the elderly
 * 3) A good place to buy a cafe business in southern Canberra
 * 4) An area in Canberra where you might start a new foreign-language radio station

An Industry under threat: Private Health Insurance
The private health insurance industry has been the beneficiary of a sizeable subsidy which has been independent of income. This subsidy is likely to be means-tested (varied based on an income assessment) as a result of new Commonwealth government legislation. The industry are far from happy about it. In Australia, if a subsidy is to be removed, expect the relevant industry to predict that the moon will crash to earth with enormous loss to life and property. See [|Confusion on how to judge health premiums]SMH 14-2-2012

Business Opportunities: MySpace
It appears that [|MySpace may be on the rise] again, with 40,000 new users a month, after Facebook drove it and other competitors into the dust. This is an interesting case study in business renewal: exploiting an opportunity with a new product or in a new market.

Lesson Plan Tues 14 Feb 2012 -- Environments of Business
Go to the page Environments of Business and complete the following exercise, using internet and other available resources:

Choose a real-world small business (<100 employees). For your chosen business:
 * 1) Complete a SWOT table (Strengths, Weaknesses, Opportunities, Threats) based upon what you know about the business and on the internal, external and macro environments
 * 2) Further describe how one Strength of the business leads to the ability to exploit an Opportunity. Give an example.
 * 3) Analyse one Weakness and how a Threat might arise to the business. Give an example.

Lay-bys back in style amid consumer caution
[|An old-fashioned means of purchasing, lay-bys], have come back into fashion with consumers wary of spending big on credit.

=2011 Material (unsorted, but potentially useful)=

What motivates workers?
The YouTube clip below is a wide-ranging discussion that begins with the question: what motivates workers?
 * Daniel Pink, a business theorist and motivational speaker, uses what we know about human motivation to make some suggestions for how work (and learning) can be made more natural and enjoyable.
 * He also discusses **entrepreneurs** and their motivations as part of this clip.

media type="youtube" key="feDJ3zL23qw" height="273" width="448"

Revision for upcoming examination: Friday 8 April 2011 Line 2
Go to the following pages and revise these topics: Entrepreneurs Legal structures of business The Business Cycle The Value Chain Industry definitions Business Failure

Cows make human milk
This is a strange one. Genetically engineered [|cows in China are giving human milk].

Legal structures of business
Make a table that includes sole trader, partnership, proprietary limited and limited (public company) structures. Using your skills at research (ie typing into Google):
 * What factors influence a business's decision to choose a particular legal structure?
 * what size do you think is suited to a sole trader? a partnership? a Pty Ltd? a Public company (Ltd)?
 * How does a company make the transition from sole --> partner --> Pty Ltd --> Ltd?
 * Do companies ever go the other way (ie down from Ltd --> Pty Ltd --> etc ?)

Classwork for 18 March 2010
While I'm strutting the catwalk in Milan in pursuing my second career as a supermodel, be sure that I'm thinking of you poor students trapped in drab Tuggeranong. Add some fabulosity to your dull lives by completing the following exercises: > > Consider both online (virtual) and physical (real-world) businesses. > >
 * Complete Japan: Earthquake and Tsunami (below)
 * Copy down the Role of Business diagram.
 * 1) Add 5 more roles that businesses may take in the Australian economy.
 * 2) Try to add 3 roles that businesses are expected to take in the international arena.
 * 3) Think of the current crisis in Japan, recent flooding in Queensland and the political unrest in the Middle East. Give 3 examples of what roles businesses are expected to perform in such extreme situations.
 * Businesses have a primary goal: making a profit. For nonprofit businesses, that profit happens to be zero -- that is, the "nonprofit" makes enough revenue to exactly cover its costs.
 * 1) What other goals / objectives do businesses have?
 * 2) What is the difference between a social role (above) and a business goal?
 * 3) Who sets these roles and goals?
 * 4) There may be conflict between social roles and goals (eg a tobacco company's drive for profit vs. its social responsibility to health of customers) Describe 3 different ways in which such conflicts may be negotiated or resolved.
 * Read [|Economy to Slow] and [|High house prices make economy vulnerable>]
 * 1) While reading the articles, consider your chosen (assignment) business.
 * 2) Draw up a SWOT analysis table and fill in Strengths, Weaknesses, Opportunities, Threats for your chosen business in these recent developments. Particularly consider: vulnerabilities in finance /credit, property ownership or rental, ability to attract /retain staff, prospects for expansion of the business.

Japan: Earthquake and Tsunami
Japan is Australia's second largest export market and the world's third largest economy. Read the articles to answer the following questions: [|Gentle steps needed to avoid further shocks] [|Uranium miners hit by nuclear crisis] [|In crisis, opportunity for Japan...] [|Stocks start lower as investors weigh up Japan] [|Nuclear plant owner's shares turn toxic]
 * 1) What economic problems did Japan face before the current disaster?
 * 2) What steps was Japan taking to address those problems?
 * 3) Are the steps outlined in 2. still appropriate now? What changes might need to be made?
 * 4) Using the 2-sector circular flow model (businesses and households) for the Japanese economy, use a diagram to explain the possible impact of the earthquake and tsunami event on Japan.
 * 5) What impacts can Australia expect from this impact on a major trading partner?
 * 6) What does the word "repatriation" mean? Why is the value of the Yen increasing (appreciating) instead of falling, as would normally happen after a disaster?
 * 7) What effects are likely to flow on to the rest of the world from this disaster?
 * 8) Are there any possible positive outcomes for Japan and the rest of the world?

Income and Wealth inequality
[|Regional disparities]in income and wealth

The Price of Oil
Unrest in [|North Africa and the Middle East] raises doubts about the supply of oil, used in making petrol, diesel, aviation fuel, plastics, fertilisers...if supply is uncertain, [|market prices will rise] for the remaining oil that can be supplied.

Crude (unrefined) oil commodity prices are slightly different depending on the quality. The two major classifications are West Texas Crude and Brent North Sea Crude, based on two high-grade supply sources in the USA and northern Europe respectively.

[|BRINT] Business Articles digest
BRINT is a useful collation site for business news stories, for those of us without the time to go looking all over the Web for it (ie all of us...).

Business Profiles
Several examples of [|business profiles], including Red Bull, MacDonalds and Domino's Pizza, based on questionnaires that business managers filled out. Examine these for ideas on drafting questions for your assignment.

How the rich became the uber rich
In developed economies the impact of job losses and economic recession is not spread evenly. [|The rich become richer]regardless of the conditions. There are implications for using a measure such as average income to estimate the wealth of a suburb, city or region: that if income is unevenly distributed, average measures may be misleading.

Assessment for this Unit
Follow the link to Assessment details for the Assignment and Term test. There you will also find links to a guide on referencing and an example of referencing an Internet article. http://www.accc.gov.au/content/search/click.cgi?rank=6&collection=allsites-meta&url=http%3A%2F%2Fwww.accc.gov.au%2Fcontent%2Fitem.phtml%3FitemId%3D541830%26nodeId%3De5a65280e173011ac382f2428d2bc7cd%26fn%3DShopping%2520online.pdf&index_url=http%3A%2F%2Fwww.accc.gov.au%2Fcontent%2Fitem.phtml%3FitemId%3D541830%26nodeId%3De5a65280e173011ac382f2428d2bc7cd%26fn%3DShopping%2520online.pdf&auth=XCyqZF4OQY0QkDtFJGMSFA&search_referer=&query=%22limited%20liability%22&identifier=1330291415.72363
 * **IMPORTANT: if you fail to complete one or both assessment items, you will Void (V grade) the subject.**