ENTERPRISE AS Business Studies

Business Activity... What is Business Activity? Meeting the “needs” of customers What is the “purpose” of business activity? Making “desirable” products though the stages of production What is “scarcity”? What might happen if all natural resources depleted?

Adding Value... What is “Added Value”? The Cost of Purchasing materials less the Selling price of the product made... How could you add value to these...

How can adding value affect your profits? Adding Value... Why are these so well known?

Goods and Services Key Definitions: “Tangible” “Consumer Goods”:- Durable and non durable “Intangible” “Consumer Services” “Capital ‘Goods” “Fixed Assets” to aid production

“Factors” of Production What does a company need in order to start producing a good or a service? Land – for? Labour – what types? Capital (finance) – for what? Capital Goods – egs? Customers Suppliers Government – what for? Enterprise !!! Risk taking process/management and decision making skills

What is an Entrepreneur? What would your definition of an Entrepreneur be? “Someone who takes financial risks and starts up and manages a new venture” Give me some egs of entrepreneurs... What do they do? Why do they do it? What skills/attributes do they possess?

What is an Entrepreneur? Generally, and entrepreneur should have: An IDEA for something new MONEY – some of their own savings or capital RESPONSIBILITY – for managing the business ACCEPTANCE – of what? The risk of failure  (how many businesses fail each year?) 30% (ish)

Characteristics of an Entrepreneur... You have decided to run an under 16’s rugby team... List what attributes you might need in this role Tell me why do you think these skills/qualities are necessary in the role? What challenges do you think you might be faced with when starting up the new team?

Business Entrepreneur Characteristics... Innovation Commitment/Self Motivation Multi-Skilled Leadership Skills Self Confidence Risk Taking Consider the importance of each of these on your worksheet...

Challenges for Entrepreneurs... Come prepared next week to discuss the challenges that can be faced by entrepreneurs... You should be able to consider and be able to explain any problems or obstacles that a new business venture could come up against

Challenges for Entrepreneurs... SEEKING OUT OPPORTUNITIES That have a DEMAND! So, where do the ideas come from to start up a new business ??? o Hobbies o Previous experience o Franchising o “gap” research

Challenges for Entrepreneurs... SOURCING CAPITAL The most common challenge for small businesses But why is raising money a CHALLENGE for an entrepreneur? Where do the problems come from? Lack of own money  Unaware of what is available to them No historical data to present to lenders Inadequate business plan

Challenges for Entrepreneurs... LOCATION Where shall we locate? What needs to be taken into consideration? Vicinity of customers? Status of position Infringement on private life Why is the importance greater depending on the type of business you run?

Challenges for Entrepreneurs... COMPETITION How can you aim to beat you competitors? BUILDING A CUSTOMER BASE How will you do this?

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So, what are the reasons for failure? LACK OF WORKING CAPITAL No money for day to day running of the business Need to offer credit (to debtors) Need to be able to buy stocks Need to be able to pay creditors How can you ensure you have enough working capital in the business?

So, what are the reasons for failure? POOR MANAGEMENT SKILLS Have they worked in industry before? Do they know how to manage/plan/communicate/promote/lead etc... A business can’t run on enthusiasm and commitment alone!

So, what are the reasons for failure? Changes to the environment Competitors Laws Economic changes (VAT/Interest Rates) Technological changes (obsolescence/upgrades) Activity 1.3 (pg 9) FARAH APPLY the answer to the scenario

Sectors... Refer to A2 work...