SACE Year 11 Business Innovation practice exams with worked answers

A business brings people and resources together to deliver value to customers. A start-up is exploring a new model under uncertainty: its owners do not yet know whether enough customers want the proposed offer or whether delivery can be sustained. It may sell a product, such as a reusable lunch container; a service, such as cleaning that container; or a process improvement, such as a faster collection system.

Revenue is money earned from sales, while profit depends on revenue exceeding expenses. A socially useful idea still needs a workable way to fund its activities.

Ownership affects control, risk and accountability. A sole trader operates a business as an individual and normally bears personal responsibility for its debts. A partnership involves people running a business together, so roles, contributions and arrangements for disagreement should be documented. A company is a separate legal entity, with more formal administration; limited liability does not remove directors' duties or guarantee protection in every circumstance.

Choose a form by applying the founders' needs, rather than assuming a company automatically makes an idea successful.

Organisational structure allocates authority and work. In a small team one person may hold several roles, but responsibilities should still be clear. Operations organises production and delivery; marketing investigates customers and communicates the offer; finance monitors money; human resources organises people and safe work. These functions depend on each other. A promotion promising immediate delivery fails if operations cannot fulfil it. Customer feedback collected by marketing must therefore reach the person who changes the service.

Legal responsibilities shape the design from the start. Businesses need truthful claims, safe practices and products, and compliance with applicable consumer guarantees. They must check relevant registration, tax, employment and licensing obligations before trading. Responsible handling of customer information means collecting only necessary details, obtaining appropriate consent and checking applicable privacy requirements. Requirements depend on the activity and structure; classroom planning should identify what must be checked rather than invent legal exemptions.