HOW DO SMALL BUSINESSES OPERATE REASONS FOR SETTING UP A BUSINESS N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

LEARNING INTENTIONS AND SUCCESS CRITERIA I understand why people start a business and where they get their ideas from Success Criteria: I can explain how business ideas are identified I can explain how businesses create wealth I can describe the benefits of starting a business N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

Where do the Ideas come from? If you were thinking about starting up a new business, where would your ideas come from? CHALLENGE! In small groups, imagine that you have the knowledge, skills and Capital necessary to start up a new business. Exchange ideas about new business ideas that you think people would want and make a list of these. Discuss each idea carefully prior to selecting the 3 that you think are the best. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

Did your ideas come from … A completely new idea for a good or service The belief that your idea for a good or service can improve existing goods and services Developing a hobby that you enjoy Combining 2 existing ideas Solving a problem that you have identified Spotting a gap in the market These are the main ways that business ideas are identified. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

Spotting a Gap in the Market The gap in the market might be providing a product or service in a completely different way. LoveFilm rents DVDs, but they captured the market by sending them through the post rather than following the video shop model, adding convenience and a huge list to choose from. Moonpig did exactly the same with greeting cards. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

TASK Now do Worksheet 3 in your jotters. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS CREATING WEALTH Another reason for starting a business is to create wealth: for the business and its owner(s) for the staff employed in the business for other businesses used as suppliers We can show this on a diagram N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS Creating Wealth Businesses produce goods and services to meet customers’ wants. (1) Customers have money to spend from their wages and want other goods and services. (4) Customers buy goods and services to satisfy their wants. (2) Wealth is created for businesses and for their employees and owners. (3) N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS TASK Using the internet, research the following local business: www.hydrasun.com Write a report or prepare a powerpoint about how this business creates wealth for the business, its owner(s) and its staff. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

The Benefits of Business What do businesses and their owners get out of starting a business? CHALLENGE! Discuss in pairs what you would hope to get from owning and running your own business. N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS

DID YOU HAVE ANY OF THESE … Making more money than if you were just employed in a business Being your own boss and the boss of others Being enterprising and innovative Helping the local community (creating wealth) Being charitable (giving something back) N4 BUSINESS IN ACTION N5 UNDERSTANDING BUSINESS