LESSON 2

LESSON TWO: OUTCOME  USE AND UNDERSTAND INTRODUTORY BUSINESS TERMS TO ASSIST YOU IN BUSINESS DISCUSSIONS.  IDENTIFY AND EXPLAIN THE BASIC RESOURCES AVAILABLE THAT SUPPORT ENTREPRENEURS.

Outline: Business Theory & Resources  1. Classifying Businesses  2. Internal Factors that Influence Entrepreneurship  3. External Factors that Influence Entrepreneurship (1 – 8)  4. Resources Available to Entrepreneurs

SCHEDULE DAY ONE 1, 2, 3 (1-2) DAY TWO 3 (3-5) DAY THREE 3 (6-8), 4 DAY FOUR4 DAY FIVEPREPARE REPORT, INTERVIEW ASSIGNMENT#2

 Service, Retail, Manufacturing/Processing or Resource A. By Type i.e. lawn service, electrical service i.e. Cab Clothing i.e. Harvest Meats, Ram Industries i.e. Mosaic

B. By Franchise or Non- Franchise

C. By ownership

Success Finance Management Self Resources 2. FACTORS THAT INFLUENCE ENTREPRENEURSHIP –INTERNAL (within business) marketing taxation

Factors 1. The Economy 2. Markets 3. Demographics 4. Technology 5. Government Initiatives 6. Environmental Concerns 7. Availability of Financing 8. Trends and Fads ECONOMICS study of resources and how they are managed 3. External Factors (outside business)

1. The economy  Economy –a system that exists to manage production, distribution and consumption of goods by consumers.  Consumers have needs and wants and businesses supply the products/services to satisfy the needs and wants  A prosperous economy allows for consumers to increase/change/improve needs and wants…..so what are the stages of the economy

Stages of the Economy Prosperity RecessionRecovery DepressionInflation

Cycle Inflation/*** Recession Depression Recovery Economic Prosperity

Prosperity times are good lots of jobs strong salaries affordable homes standard of lifestyle is good low unemployment rate inflation rate is average (i.e. 2% per year) defined…

Inflation A general increase in prices and fall in purchasing value of money (i.e. my 250 a week grocery money does not purchase as much as a month ago..prices have gone up.) Could lead to recession If my salary increase is 2% and cost of living increase is 4%, my purchasing power has decreased.

Recession Recession – extended decline in business activity – consumers are not purchasing..why? ….prices are too high, salaries too low, interest rates to borrow too high, Two negative consecutive quarters of falling real gross national product Quarter – three months GDP – record definition….represents economy slowing down… Interest rates will fall to help stimulate economy…example Canada US Gross Domestic Product – defined -- the total value of goods produced and services sold in a period of time.

Interest Rates… Salary -- $25/hour – 40 hours 1000 a week 4000 a month Deductions Income Tax – 1300 CPP EI Net Pay Mortgage Groceries a month Entertainment – 200 Utilities P & E 175 Phone 75 Cable/Int 75 Spending 600 Student Loan Payment 200 Car Payment 250

Interest Rates When you borrow 25 year mortgage 450,000, 3.0%; 11% Example When you invest at 4% or 8%..100 month for 30 years.. 100x12 = 1200 x 30 = $_____ Spreadsheet

Example mortgage rates  %  %  %  2007 – 6%  1998 – 6.5%  1994 – 8%  1992 – 11%  1990 – 14-15%  1980 – 1981 – 18%

 --academic goal setting  --missing assignments   --notes for 20 minutes  --groups of 4  --a) list all business terms that we have covered so far in notes and discussions  --b) identify 5 questions using the terms  --c) how you would like to form your group -- group first than idea; ideas first then groups   1 person will post up the terms  1 person will share the questions  1 person will identify how the group is to be formed why or why not  1 person records the temrs

To stimulate the economy.. borrowing rates will be low (people borrow money and spend it) investment rates low…keeps money flowing – people will keep spending rather than investment To under stimulate…control…. borrowing rates will be high (people cannot borrow money therefore they cannot spend it – and investment rates high…takes money out of economy as people will not spend and wish to invest

Depression Period which employment rate is very very low (or unemployment rate was very very high) Years…. Came out of it because of….

Recovery …jobs increase --economy is stimulated --government initiatives take effect

 1929 – 1939 – Great Depression  1939 – 1945 – Recovery (military demand stimulated economy)  1945 – 1965 Prosperity (post-world war II) Baby Boomers born during this time. (largest group)  Since 1945 there have been several recessions in Canada,  but there has also been times of prosperity.  1981 – 1982 – recession  1983 – 1989 – SLOW recovery  1990/ consumer spending weakened - recession  1992 – 2005 – recovery to prosperity  2008 – 2009 global recession  2009 and on recovery… running close..recession  …and prosperity ??? Recession??

2. The Markets  Definition  A market exists when buyers and sellers come together – the buyers as the money and the seller has the good or service  Market – economy is based on supply and demand,supply

In economics, supply refers to the amount of a product that producers and firms are willing to sell at a given price all other factors being held constant Definition of 'Demand' An economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service

Demand and Supply  Demand – consumer demand for a product/service  Very little demand – product or service will not sell  High demand – product or service will sell and prices will increase  Supply – of product or service  For some products demand is high – and prices stay high (i.e. name brand clothing for teenagers); For some products if the prices decrease (i.e. ipods -- demand will increase)

Example

Standard of living   the degree of wealth and material comfort available to a person or community.  THE ECONOMY IMPACTS OUR STANDARD OF LIVING  VIDEO…CURRENT EVENTS VIDEO…CURRENT EVENTS

Video --

1) Market economy- An economic system in which individuals own and operate different factions of production. Examples: Free Enterprise & Capitalism 2) Command economy - An economic system in which government owns and operates all factions of production. Examples: Socialism & Communism 3) Traditional Economy - An economic system based on culture and tradition. Economy is based on agriculture and hunting. Examples: Non-Industrialized agrarian societies. 4) Mixed Economy - An economic system where both command and market systems are featured. Examples: United States is not a pure capitalist country for there are forms of socialism instilled in it to benefit individuals in need of services and has minimum wages, however, free enterprise reigns in the U.S. China also has both forms of economy, however, the Chinese government controls the prices and production.

 Once demand is established….there are two categories of markets: (within a typical market such as Canada or the U.S.)  1. Consumer market – consumer buys from business  2. Business to business – business buys from business (i.e. Dairy Queen buys product from Scott National – napkins, etc.)

3. Demographics  File (discuss all generations) File  statistical data relating to the population and particular groups within it:

4. Technology  Production  Communication  Diagnostic  Storage  Entertainment  Home/Car  Software and hardware  Programs and equipment e.g. Ipads Cell phones Netbooks Old technologies desktop com Work from home Fewer support -adv, acc

5. Government Initiatives  Energy Grants  Renovation Grants  Increase of taxation (pst and gst)

6. Environmental Concerns  Environmental restrictions/pollution

7. Availability of Financing  Interest rates, down payments, security

8. Trends & Fads

ADDITIONAL TERMS  REVENUE (MONEY COMING IN)  EXPENSES (MONEY GOING OUT – RENT, ADVERTISING …NOT ASSETS)  R –E = PROFIT OR LOSS  OR  R – E = SURPLUS OR DEFICIT

Updates  election-2015-key-moments-leaders-debate election-2015-key-moments-leaders-debate

FEDERAL ELECTION  OCTOBER 19, 2015   economy-recession economy-recession

YOU REALIZE YOU HAVE A GREAT IDEA FOR A BUSINESS…WHAT RESOURCES ARE AVAILABLE...YOU WANT TO OPEN A COFFEE SHOP…. 4. Business Theory……………..Resources Available

RESOURCES. Face to FaceWeb Sites TALK TO CONSUMERSSTATS CANADA VISIT EXISTING COFFEE SHOPS SASK BUSINESS NETWORK TALK TO EXISTING COFFEE SHOP OWNERS OR PAST OWNERS Square One CHAMBER OF COMMERCECanada Business Network INFORMATION SYSTEMS COROPORATION Aboriginal Business Network BUSINESS OFFICES THAT SUPPORT NEW BUSINESS Community Futures

Word File  CREATE FOLDERS  ENTREPRENEURSHIP 30  PORTFOLIO  BUSINESS  Open the file from the hand-in folder, RE- SAVE THE FILE AS businessresourcesvg and save it in the portfolio folder  You will have Monday to work on it and hand it in at the end of class.

ASSIGNMENT  A) CREATE A LIST OF QUESTIONS WHICH YOU WOULD LIKE TO ASK OF A LOCAL BUSINESS OWNER …use 10 terms in questions.  B) ARRANGE TO DO AN INTERVIEW OF A LOCAL BUSINESS OWNER..  C) SUMMARIZE YOUR FINDINGS IN A REPORT.  D) DUE FRIDAY SEPTEMBER 25 3:30 PM

REPORT STRUCTURE TITLE PAGE1 10 QUESTIONS (using 10 terms)10 10 RESPONSES10 SETUP5 GRAMMAR, PUNCTUATION5 IMAGE4 SUMMARY INTRO PARA OF BUSINESS 10 LETTER TO THANK THE INDIVIDUAL INTERVIEWED, 5 (will be completed as a class) – with a template TOTAL50 MARKS