Simplified & Detailed Notes on Entire Syllabus

Resource Description

9.1 Preliminary Topic – Nature of Business:
Role of Business:
The Nature of Business:
Producing goods and services:
What is a business?​ the organised efforts of individuals to produce and sell (for a profit),
products that satisfy an individual’s needs or wants
Products can be broken up into two categories:
→ Tangible: A product of physical nature e.g. goods (phones, food etc.)
→ Intangible: A product of non-physical nature e.g. services (healthcare, education etc.)
Importance of the business to the economy:
→ provides good and services as well as diversity and convenience
→ injections of money into the business cycle (leakages through household sector paying for
products → stability as there is a balance.)
reduces unemployment → less reliance on tax money and a higher standard of living
Profit:
→ return or reward that businesses and owners receive for producing products for
consumers sales revenue​ – operating expenses = profit
Employment:
→ the numbers of employees hired by a business will depend on the nature of the products
and the number of consumers that wish to purchase the products e.g. the more that is sold,
the more employees are needed → larger business need more employees and vice versa
Incomes:
→ income is the amount of money a person receives for their labour (wage/salary)
→ the remainder of money after deductions is the ‘business profit’​ and becomes ‘business
owner profit’ ​and consequently ‘owner income’
→ ​the part of a business’s profits that are shared among shareholders is called a ‘dividend’
Choice:
→ the act of selecting amongst other alternatives → ‘freedom of choice’
→ businesses compete with each other to provide the most product selection available
Innovation:
→ improvements on an established product: aim to satisfy cont. society
→ new technological developments lead to: new products, new markets and new business
opportunities
Entrepreneurship and risk:
→ individuals who transforms their ideas into a business that develops, produces and
provides a certain product in an untapped markets → risky through no previous history of
customer demand or guaranteed returns

Wealth Creation:
→ the more that is produced, the more wealth is generated into the economy → profit
created due to business activity → which is distributed to society through taxes etc.
Quality of Life:
→ ‘the overall well being of an individual, that is a combination of material and nonmaterial
benefits’
Types of Businesses:
Classification of business:
Legal Structure:​ ​e.g sole trader, partnership, private company, public company,
government enterprise
Location:​ Local: businesses in immediate environment → usually SME’s e.g cafe etc.
National: operate through Australia e.g Coles and Woolies etc.
Global: operate worldwide → not limited to national borders
TNC’S: businesses that have production facilities in various countries
Size:​ Small: fewer than 20 employees for non-manufacturing, independently owned, owners
contribute most of funds
Large: more than 20 employees for non-manufacturing, owned by many people, shared
control etc.
Industry:​ ​Primary: provide raw materials needed in other industries e.g iron ore, timber
Secondary: use raw materials to produce goods e.g manufacturing steel
Tertiary: provide services
→ Quaternary: provide service in the fields of IT and telecommunication/media
→ Quinary: provide domestic services e.g child care, tutor etc.
Legal Ownership:
Incorporated:​ legal business/separate entity from owners e.g companies