Business Studies – Foundation Level 2 is divided into six (6) compulsory units of study:
Unit 1: An Introduction to the Business Environment (25 hours)
Unit 2: Business in the Economy (25 hours)
Unit 3: Establishing a Small Business (20 hours)
Unit 4: Operating a Small Business – Marketing (30 hours)
Unit 5: Operating a Small Business – Accounting and Finance (30 hours)
Unit 6: Business Inquiry – Preparing a Business Plan (20 hours).
UNIT 1: AN INTRODUCTION TO THE BUSINESS ENVIRONMENT (25 HOURS)
The focus of this unit is to introduce learners to the business environment in Australia. It examines the organisational structures businesses may take.
Business Knowledge |
Business reasoning |
Business decision-making |
Business and enterprise |
- Definition of ‘business’ and the importance of ‘being enterprising’
- The size of the business sector at a Tasmanian and national level
- The range of businesses operating in the local area
- Classifying businesses by size – micro, small, medium and large
- Objectives of business, e.g. maximising profit, increasing market share, meeting owner expectations
- Risks faced by a business in trying to achieve its objectives, such as changes in the level of economic activity (spending, interest rates, inflation).
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- Classification of businesses according to size based on a set of criteria.
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Business Knowledge |
Business reasoning |
Economic decision-making |
Small business ownership |
- Forms – sole trader, partnership and small proprietary company
- Characteristics.
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- Advantages and disadvantages of each form.
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- Most appropriate ownership structure depends on a particular context.
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Business environments |
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- Main types – the internal environment and the external environment.
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- Implications for owner/managers.
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The business life-cycle |
- Stages – establishment, growth, maturity and decline.
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- Annotated drawing of the business life-cycle
- Identification of which stage a business is in.
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- Implications for owner/managers.
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Laws and regulations |
- Introduction to the types and range of laws and regulations that impact on business, e.g. business registration, business taxation, employees, work, health and safety, consumer law and intellectual property.
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- Implications for owner/managers.
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Social, environmental and ethical factors |
- Influence of the external environment and the media.
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- Implications for owner/managers.
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UNIT 2: BUSINESS IN THE ECONOMY (25 HOURS)
The focus of this unit is business economics and the role of businesses in the process of production and spending.
Business knowledge |
Business reasoning |
Business decision-making |
The Australian Economy |
- The importance and roles of small and medium size enterprises (SMEs) in Australia
- Key features of the Australian modified market economy
- How businesses collectively answer the four key economic questions (i.e. what to produce, how much to produce, how to produce and for whom to produce?)
- The concept of consumer sovereignty and its implications for business decision-making
- The concept of economic interdependence
- How a business produces goods and services using economic resources.
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- Impact of economic interdependence on business decision-making.
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Basic market theory |
- The concept of a market
- How markets operate – basic demand and supply theory.
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- Basic demand and supply theory:
- graphical demonstration and explanation of how changes in non-price factors lead to an increase or decrease in demand and supply
- graphical demonstration and explanation of how the price mechanism clears market surpluses and shortages
- graphical demonstration and explanation of how shifts in demand and supply curves cause changes in market equilibrium.
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- Impact of market forces on business decision-making, e.g. pricing.
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The business cycle |
- The notion of the business cycle
- Stages – upswing, boom, downswing, recession
- Characteristics of each stage, including marketing strategies.
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- Annotated drawing of the business cycle.
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- Impact of the business cycle and its stages on business performance and decision-making.
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UNIT 3: ESTABLISHING A SMALL BUSINESS (20 HOURS)
The focus of this unit is on establishing a small business in Australia. It is about the reasons for doing so, the importance of entrepreneurship and innovative thinking, and the factors that contribute to business success.
Business knowledge |
Business reasoning |
Business decision-making |
Reasons for starting a business |
- Wealth creation
- Developing an innovative idea
- Financial security
- ‘Independence’
- Personal choices.
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Entrepreneurship |
- The notion of entrepreneurship and examples
- The notion of innovation and examples
- Identifying opportunities.
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- The use of a Y-chart as a decision-making tool to decide on a suitable product or service.
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Legal requirements for establishing small to medium enterprises (SMEs) |
- ABN
- Business name
- Registration for tax file number
- Licences
- Consumer protection
- Intellectual property
- Torts and contract law (brief treatment only)
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- Implications of legal requirements for owner/managers.
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Critical success and failure factors |
- Appropriate market research/lack of market research
- Positive cash flow/lack of cash flow
- Planning experience/lack of planning experience.
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- Factors impacting on business success and failure in particular business scenarios.
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- Implications of success/failure factors for owner/managers.
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Key business functions |
- Operations
- Human resources
- Marketing
- Finance
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The business plan |
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- Importance of a business plan to entrepreneurs, owners and managers.
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Social, environmental and ethical factors |
- Impact of business on the environment
- Intellectual property
- Significance of digital identity.
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- Implications for owner/managers.
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UNIT 4: OPERATING A SMALL BUSINESS – MARKETING (30 HOURS)
The focus of this unit is the features of successful marketing and how marketing contributes to the overall business plan.
Business knowledge |
Business reasoning |
Business decision-making |
Concept of marketing |
- Definition of ‘marketing’ and its critical importance to business success.
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SWOT analysis (strengths, weaknesses, opportunities and threats) |
- The notion of a SWOT analysis.
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- Completion of a SWOT analysis.
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- Implications of the SWOT analysis for business planning.
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Market research |
- Importance of market research in identifying potential customers (the target market) and competitors (competitor analysis)
- Types – surveys, internet, local newspapers.
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- Implications of aspects of marketing to business decision-making.
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Market segmentation |
- The notion and purpose
- Types – demographic, geographic, lifestyle and behavioural.
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- Implications of market segmentation to business decision-making.
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Influences on consumer behaviour |
- Factors that influence consumer behaviour (peer groups, psychological factors and economic factors).
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- Implications of these influences to business decision-making.
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The marketing mix |
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- Definition
- Elements or the 4P’s of marketing (product, place, promotion and price).
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- Implications of these elements to business decision-making.
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Marketing and promotional activities |
- Features
- Types – exhibitions, displays, catalogues, advertising materials, visual merchandising, radio, television.
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- Implications of these types to business decision-making.
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Impact of technology |
- On-line marketing through the internet and social media.
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- Implications for owner/managers.
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Social, environmental and ethical factors |
- Awareness of different customs when dealing with customers and in promotional activities
- Product labelling
- Advertising practices, especially to children.
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- Implications for owner/managers.
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UNIT 5: OPERATING A SMALL BUSINESS – ACCOUNTING AND FINANCE (30 HOURS)
The focus of this unit is on the importance of effectively managing the finances of a business. Learners are introduced to the financial institutions that exist in the business environment and the recording and using of financial information for business decision-making.
Business knowledge |
Business reasoning |
Business decision-making |
The purposes of financial management |
- Viability
- Control
- Decision-making.
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Sources of finance |
- Equity as an important source of finance
- Distinction between equity and debt
- Main sources of finance available to SMEs – bank overdrafts, term loans, mortgages
- Advantages and disadvantages of these sources of finance
- Factors financial institutions consider when approving finance – risk and return.
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- Implications for owner/managers of different sources of finance.
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Cash recording |
- The accounting process – documents/records/ reports/decision-making.
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- Preparation of multi-column Cash Receipts Books and multicolumn Cash Payments Books for routine cash transactions (Refer Appendix 2 for recording templates)
- Preparation of simple Statement of Receipts and Payments (Refer Appendix 3 for reporting templates).
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Income Statements and Balance Sheets |
- Key elements of financial statements – assets, liabilities, owner’s equity, revenue and expenses
- The accounting equation.
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- Classification of items into their key elements
- Completion of accounting equation problems
- Preparation of a classified Income Statement and Balance Sheet from a list of familiar items and their balances (for a sole trader operating under the perpetual inventory system with net sales and cost of goods sold provided) (Refer to Appendix 3 for reporting templates).
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- Interpretation of information in financial statements to assess profitability (net profit ratio, rate of return on owner’s equity) and liquidity (working capital ratio) to plan and control future decision-making (Refer to Appendix 5 for formulae)
- Recommendations as to a future course of action.
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Business knowledge |
Business reasoning |
Business decision-making |
Cash budgets |
- Importance of cash to business viability
- Purpose of a cash budget.
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- Preparation of Cash Budgets (schedules for accounts receivable are not required) (Refer to Appendix 4 for template).
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- Interpretation of Cash Budgets for future decision-making.
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Break-even (cost-volume-profit – CVP) analysis |
- Purpose of break-even analysis.
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- Calculation of the break-even point in terms of units and sales volume
- Calculation of the number of units when there is a desired profit
(Refer to Appendix 5 for formulae).
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- Interpretation CVP calculations to plan and control for future decision-making
- The impact on the business from a change in any of the following variables – selling price, variable costs, fixed costs and desired profit.
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Social, environmental and ethical factors |
- Taxation responsibilities, non-disclosure of information, cash handling and security.
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- Implications for owner/managers.
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UNIT 6: BUSINESS INQUIRY: PREPARING A BUSINESS PLAN (20 HOURS)
This unit focuses on learners combining their knowledge and skills to develop a business plan for a business idea of their own. The idea may take the form of a product or service. Learners may complete this inquiry on their own or in groups of up to three (3). They will apply the inquiry approach to the preparation of their business plan. The inquiry approach can be represented by the following diagram:

Business inquiry skills |
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Steps |
Questions to be considered |
1. Planning and organising |
- What time frame am I working to?
- What time, resources and equipment do I need?
- What steps do I need to undertake?
- What do I need to negotiate with my teacher?
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2. Defining and questioning |
- What is my idea?
- What does the focus and key components tell me?
- What do I need or want to know about it?
- What do I already know about it?
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3. Researching |
- What primary and/or secondary resources can I use?
- How do I know the information is valid and reliable?
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4. Analysing and evaluating |
- How is the information relevant to the question?
- What other information do I need?
- What parts support/do not support my task?
- What conclusions can I draw about the current situation?
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5. Reflecting |
- What have I found out about the viability of my idea?
- What else is important?
- What recommendation would I make?
- What have I learnt that can inform future learning?
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6. Communicating |
- What is my main point?
- What is my audience and what format is expected?
- What is my decision/conclusion?
- What business terms, concepts and ideas do I need to use?
- Have I used these appropriately?
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THE BUSINESS PLAN
Focus |
A business plan is central to the strategic development of a start-up business for an innovative and enterprising opportunity. |
Task |
Learners are to prepare a written business plan for their idea. They are to use the key components and guidelines below to assist in their research and report preparation. |
Key Components |
The idea – the product or service, its potential and the prime function of the business
Business location
Mission statement
Ownership structure
Staffing requirements – the number of people required, and the essential skills and training
Market analysis – the competition, the marketing strategies to be employed, and the pricing details
Financial plan – establishment costs and how this will be financed and the cash flow projections (budget) for the first 12 months
Future prospects. |