1. ASSESSING BUSINESS START UPS AS Business Studies

2. Aims and Objectives Aim:  To understand how to assess business start ups. Objectives:  Define SMART objectives  Describe different business start up objectives  Analyse the risks involved of starting up a business  Evaluate the reasons why businesses fail

3. Starter  In your teams, decide on two objectives, start-up businesses may set before beginning to trade.

4. Why Set Business Objectives?  Brainstorm in groups the reasons for setting business objectives. Why Set Objectives? ABCD

5. Start Up Objectives Profit Maximisation Earn as much profit as possible. May conflict with other objectives. If cut prices to increase sales. Profit Satisficing Earning just enough profit to pay costs and pay owners a salary.

6. Start Up Objectives Survival Primary objective in the first few years. Sales Growth Owners try to make as many sales as possible. Social Objectives Social entrepreneurs may want to correct one of societies many problems.

7. Start Up Objectives  In your teams, decide on two objectives you can set for your businesses.  Feedback  Are your objectives SMART?

8. Specific S Clearly related to the type of business. Measurable M Putting a value to an objective helps when assessing performance Achievable/Agreed A Are objectives agreed by all those involved. Are they achievable? Realistic R Objectives should be challenging but not impossible! Time Specific T Objectives should have a time limit, so performance can be assessed.

9. SMART Objectives SMARTSMART  Re-write your two objectives, making sure that they are SMART

10. How to assess success or failure..  Must refer to businesses’ original objectives.  If main aim is profit, profit can be measured against profit figures. Same applies to sales etc.  Firms with a survival objective will have been judged to have failed if they do not exist after 12 months!  Social enterprises can be measured against how many people they have helped etc

11. Assessing Business Start Ups  Watch the video on boo.com  Record anything you feel contributed to this start up businesses’ downfall.  http://www.youtube.com/watch?v=n9k gZqbCJiM http://www.youtube.com/watch?v=n9k gZqbCJiM

12. ASSESSING BUSINESS START UPS AS Business Studies

13. Aims and Objectives Aim:  To understand how to assess business start ups. Objectives:  Define SMART objectives  Describe different business start up objectives  Analyse the risks involved of starting up a business  Evaluate the reasons why businesses fail

14. Starter  Define SMART objectives.  How can objectives be used to measure business success?  Give two objectives a start up business may set.

15. Business Failure  In groups discuss reasons as to why businesses may fail.

16. Business Failure Reasons for Business Failure 1) Insufficient Capital 2) Poor Management Skills 3) Poor Location 4) Lack of Planning 5) Over-Expansion 6) External Factors

17. Insufficient Capital Reason 1  Underestimating the amount of money needed to set a business up and keep it running.  Entrepreneurs may assume a low break even point, over estimating income.  This can be fatal.

18. Poor Management Skills Reason 2  Not having relevant skills can be detrimental to the success of the business.  Over relying on one un-reliable supplier can be fatal.  Not focusing on selling the product for the first few months is an example of poor management.

19. Poor Location Reason 3  Need footfall for success if in retail.  Prime sites are expensive.  A good location can keep a struggling business alive.  A poor location can mean the end of a good business!

20. Lack of Planning Reason 4  Lack of constant planning on a day-to- day basis can contribute to failure.  Altering of business plan to suit situations can reduce chances of failure.

21. External Factors Reason 6  Changes in demand.  Increases in costs.  Supplier problems.  Interest rate increases.  Oil price increases.  Lack of finance in recession.

22. Over-Expansion Reason 5  Growing too big, too quick  Boo.com.  Difficult to manage due to speed of growth.

23. Business Risks  There is a link between risk and business start ups which fail.  Worksheet.

24. Risks of Business Start Ups Risk of Business Start-UpsHow to reduce risk Lack of business skillsTraining courses, and advice from experts/agencies. Lack of knowledge of Legal Requirements Training courses, legal advice, partner with knowledge. CompetitionMonitor decisions and actions of rivals. Increased Taxes or Interest RatesPlan ahead as much as possible. Changes in consumer tastesConstant market research and innovation. TechnologyTraining course, and maintain technology levels.

25. Spotting Business Failure  http://www.geoffburch.com/?page_id=51#busines s-motivation-speaker http://www.geoffburch.com/?page_id=51#busines s-motivation-speaker  Which factors from the case studies, may contribute to these start-up businesses’ potential failure?

26. Plenary  Describe 3 reasons for business failure.  Describe two methods of assessing the success of start up businesses.  What does SMART stand for?