1. Chapter 2 – Small Business In Australia What is a Small Business? A business is define as a Small Business if: -It is independently owned and operated -It is closely controlled by owners, who contribute majority of capital -The owners are the main or principle decision makers -Up to 20 Employees in a non manufacturing business -Up to 100 Employees in a manufacturing business VCE Business Management Year 11

2. Chapter 2 – Small Business In Australia What is a Micro business? A business is define as a Micro Business if: -It employees fewer than 5 employees This category accounts for 80% of all businesses registered in Australia Australian Bureau of Statistics say: -More than 67% of small business are home-based business -That is around 856,000 business in Australia VCE Business Management Year 11

3. Chapter 2 – Small Business In Australia How do Small Businesses Help our Economy? Small Businesses make up 95% of all Australian Businesses, they contribute to our economy in many ways including: -Generating Jobs for many people -They Generate Taxation – From Profits, From Employees wages *This Taxation allows the government to provide goods and Services for the community including: Health and education services, Roads and public transport systems -Small Businesses also provide support for Large Organisations that use outsourcing to produce some of their products eg. Car parts -Provide services to individuals who outsource domestic chores, eg cleaning -Provides/Develops Entrepreneurs who may develop small businesses in larger business or franchise their business to help it’s growth VCE Business Management Year 11

4. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: -Size based on employee numbers -Legal Structure -Business Activity -Public or Private Sector VCE Business Management Year 11

5. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: -Size based on employee numbers -Micro Business – Fewer than 5 Employees -Small Business – Fewer than 20 Employees – Non Manufacturing Bus. - - Fewer than 100 Employees – Manufacturing Bus. -Medium Business – Between 20 – 199 Employees -Large Business – More than 200 Employees VCE Business Management Year 11

6. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: -Legal Structure There are 2 main types of legal structures in the private sector: -Incorporated – these businesses are officially registered as a company and are a separate legal entity, they are subject to the requirements of the Corporations Act 2001 -This form of structure has a limited liability -Unincorporated – this structure includes Sole Traders, Partnerships and Trusts. This means there is no difference or separation between the business and the owner/s, which sees the owner/s liable for the debt of the business. -This form of structure has an unlimited liability VCE Business Management Year 11

7. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: Business Activity It is possible to classify businesses into 3 main business activities 1. Primary Sector – include industries that involve agriculture, fishing and extraction of raw materials 2. Secondary Sector – Industries that involve manufacturing and construction of goods 3. Tertiary Sector – Industries that involve providing services for consumers and other businesses a. Quaternary – Industries representing, communication, finance, insurance, property, business and services and education b. Quinary – Industries representing, accommodation, restaurants, cafes, health, cultural and recreational services and personal/household services. VCE Business Management Year 11

8. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: Public or Private Sector -Australian business are divided into 2 main areas: -Public sector – includes departments and agencies of all 3 levels of government. These business can generally cover, health, education, defence and law enforcement. Governments do / have also owned and controlled telecommunications, utilities, and public transport -Private Sector – comprises of businesses owned and controlled by individuals or groups. The majority of businesses fall within this sector. VCE Business Management Year 11

9. Chapter 2 – Small Business In Australia Key Features of Businesses To understand the difference between businesses there are a number of key features to look at, these include: Public or Private Sector -Australian business are divided into 2 main areas: -Public sector – includes departments and agencies of all 3 levels of government. These business can generally cover, health, education, defence and law enforcement. Governments do / have also owned and controlled telecommunications, utilities, and public transport -Private Sector – comprises of businesses owned and controlled by individuals or groups. The majority of businesses fall within this sector. VCE Business Management Year 11

10. Chapter 2 – Small Business In Australia Distinguish between Small Medium and Large Businesses Complete the table below VCE Business Management Year 11 CharacteristicsSmallMeduimLarge Size – Number of employees More than 200 Employees Common forms of Legal structure OwnershipPrivate and public (Partners/Sharehol ders) Business StructureSimple