BUSINESS AND MANAGEMENT MODULE 1 BUSINESS ORGANIZATIONS & ENVIRONMENT

Starting a Business  Entrepreneur –The person who takes the risk to manage, plan and organize the factors of production  There are several factors to consider when starting a business –Idea –Finance –Workers –Capital equipment –Suppliers –Customers –Marketing –Legal  Canadian Business Pod Cast Canadian Business Pod Cast Canadian Business Pod Cast

Reasons for Setting up a Business  Growth –Capital growth, in areas such as real estate, can greatly increase your net worth –Donald Trump Donald  Earnings –“You can never get rich, while you work for someone else.” –Businesses returns can far outweigh salary  Challenge –Success boosts self-esteem and achievement –Why Warren Buffett continues to work at age 86 Warren BuffettWarren Buffett

Continued….  Autonomy –Independence, freedom and choice are the characteristics of a business owner  Security –Employees can be fired or made redundant; entrepreneurs can’t fire themselves  Hobbies –Successful entrepreneurs have a passion for what they do –J.K. Rowling or Jamie Oliver J.K. Rowling J.K. Rowling

Identifying Market Opportunities  Finding new or unsatisfied consumer needs by: –Identifying a gap in the market  Niche markets –Innovative ideas  Have good market and product knowledge  Apple’s Mac Book Air Apple’s Mac Book Air Apple’s Mac Book Air –Further develop personal skills  Russian billionaire Roman Abramovich’s love for soccer led him to by EPL’s Chelsea FC Roman Abramovich’s Roman Abramovich’s

Possible Problems  Statistically 40% of new businesses fail in their first year  Mainly due to: –Lack of financial capital –Cash flow problems –Marketing issues –Unestablished consumer base –People management issues –Legalities –Production problems –High cost of production –Poor location –External influences

Formative Case Study - Reload Reload Juice and Salad Bar is a small New Zealand fast-food chain founded in It aimed to provide healthier options than the standard fast food fare. In 2007, it announced plans for expansion to Europe, starting with a store in Glasgow, Scotland. Required: Identify some reasons why a financial institution may not be willing to fund this type of expansion. What problems might Reload encounter in trying to build a customer base in Scotland?