1. Business Finance

2. Goals of Business To respond to consumer needs and wants with goods and services that people are willing to buy.  Goods  Articles of merchandise that are brought or produced by a business and sold to customers for profit.  Services  Helpful acts such as pedicures, home cleaning, nursing  Producer  The people and businesses that make goods and provide services.  Consumer  The people or businesses who purchase the goods and services.

3. Needs or Wants Needs  Essential services that are required to live  Food, clothing, and shelter Wants  Things that people enjoy having, and possibly make you life easier, but are NOT necessary for survival  Computer, phone, cars

4. Needs or Wants Some reasons these may change throughout life are:  Increased Income  Major life events  Changes in technology  Increased family responsibilities  Changes in priorities

5. Needs or Wants Consider the changing stages of life:  University student  Young professional  Parent of young children  Parent of grown children  Retired individual How do your needs and wants change through these phases of life? Try to come up with 2 needs and 2 wants specific to each phase of life.

6. Is being an entrepreneur the right for you? A score of 41 to 65  Indicates that you will almost certainly fit well into the role of business owner. You have what it takes to fight for success and stick with it when the going gets tough. You have a better than average chance of surviving in what is a tough and challenging environment. A score of 66-89  Shows that you have a good chance of being successful as an entrepreneur, however there are some skills and attitudes that you might want to develop to improve your chances.

7. Is being an entrepreneur the right for you? A score of 90-122  Means that you should consider taking some courses on starting a business. Also talk to several entrepreneurs and ask them what they feel are the key characteristics and personality traits you will need to be successful, and ask yourself honestly if you possess them. Talk to them about what life is like as an entrepreneur and consider carefully whether this is really the life you want for yourself. A score of 123  Is unlikely, but if that’s what it adds up to, think long and hard as to whether this is the life for you. No one should enter into self- employment lightly, it’s a very tough life. Be honest with yourself, wouldn’t you better off and happier working for someone else?

8. Math Skills: Fractions, decimals and percents Decimals  Place value Fractions  Place value tells you the bottom number of the fraction Percent  Literally means per 100  As a fraction, 100 ths, how much out of 100  As a decimal, how many 100 ths,

9. Math Skills: Compound Interest Compound Interest  Interest is paid on original amount of deposit, plus any interest earned.  Where  A = Amount  P = Principal  r = rate  t = time in years  n = # of compounding periods per year Semi-annually - twice a year Quarterly – four times a year Monthly – twelve times a year Daily – 365 times a year

10. Example You take out a loan $3500 for 3 years that charges 6.5% per annum, compounded monthly. How much will you owe at the end of 3 years?

11. Goals of Business What makes a business successful?  Understanding the needs and wants of consumers  Producing a quality product or service  Marketing and distributing the product or service effectively  Offering the product or service at a competitive price.  The entrepreneur!

12. Feasibility of a Small Business Factors to consider  Are there enough potential customers to support your business?  Are there competitors?  What are the costs involved?  Start-up costs Purchases you need to make before you start the business Furniture, equipment, tools, etc  Operating expenses Ongoing costs of your business Location, utility bills, consumable supplies  How will you finance this?

13. Examples: Rayyan Moose Jaw  population of 33 274  approximately 6% ≤ 5 years old  30 licensed daycares operating in the city. Regina  population of 193 100  approximately 6% ≤ 5 years old  142 licensed daycares operating in the city.  Approximately how many children aged 5 and under are there in Moose Jaw and in Regina?  How many children aged 5 and under are there in each city for each daycare?  In which location would you recommend Rayyan open her daycare?

14. Examples: Hazel What are her total start-up costs? If Hazel has $5000.00 saved, how much more does she need to cover her expenses? Hazel does not want to take out a loan. Suggest two ways she could adjust her start-up costs.

15. Homework NEW TEXT  P. 282 # 1 - 8

16. Financial Terminology Revenue  amount earned through the sale of goods or services Fixed expenses  Expenses that occur on a regular basis and do not change in value Variable expenses  Expenses that change in value or frequency Profit  amount by which revenue exceeds expenses for a given period Loss  the amount by which expenses exceed sales for a given period Break even  the point at which business expenses equal sales revenue

17. Statement of Revenue and Expense Just Desserts Catering Company Statement of Revenue and Expense For the month ending July 31, 2012 Totals REVENUE Payment from Mr. Dorn403.43 Payment from Mrs. Towers483.72 Tip from Mrs. Towers20 Cheque from Mr. Rogers309.91 Payment from Mr. Oswich421.39 Payment from Mrs.Zedrickowsky376.76 Payment from Mr. Ozaki395.62 Payment from Ms. Li508.26 TOTAL REVENUE2919.09 EXPENSES Gas for car296.74 Food containers72.84 Groceries141.51 Car Insurance106.53 Refund to Mr. Zibit25.34 Employee salary1254.25 Monthly fee paid for Advertisement100.00 Telephone bill (flat rate plan)80.00 TOTAL EXPENSES2077.21 PROFIT841.88

18. Question to expect… Determine from a spreadsheet if an entry is a revenue or an expense Classify expenses as fixed or variable. Determine the profitability of a company over a short period  Determine expenses and revenue… find the difference! See the examples on pages 288 and 290 if you get stuck!

19. Homework Page 293 # 1 - 8