Slide 1

Enterprise

Boardworks Ltd 2009# of 23Teachers notes included in the Notes PageFlash activityIcons key:For more detailed instructions, see the Getting Started presentationWeb addressesExtension activitiesSoundPrintable activitySpreadsheetVideo1Photo: nastazia, shutterstock.com

What is the meaning of the terms enterprise and entrepreneur?What are the main reasons for setting up a business? What are the key characteristics required to become a successful entrepreneur?Why do businesses fail?Why is enterprise important to the economy and what are the main sources of government support?Learning objectivesLearning objectives Boardworks Ltd 2009# of 232Business brains

An entrepreneur is an individual who sets up a new business and has the skills needed to make it a success. Their drive to work for themselves is known as entrepreneurial spirit.

Boardworks Ltd 2009# of 23Teachers note: These people are all entrepreneurs. They are Richard Reed of Innocent Drinks, Richard Branson of Virgin, Oprah Winfrey of Harpo Production and Jamie Oliver of Fifteen, Jme and Jamie at Home. Students should identify as many of the entrepreneurs as possible. They could then try to name the business or the sector in which each person is located.

Photos: Richard Reed innocent drinks; Richard Branson Richard Burdett. This image is reproduced under the terms of the Creative Commons License. A copy of the license can be read at this address: http://creativecommons.org/licenses/by/2.0/; Oprah Winfrey Alan Light. This image is reproduced under the terms of the Creative Commons License. A copy of the license can be read at this address: http://creativecommons.org/licenses/by/2.0/; Jamie Oliver reallyshort. This image is reproduced under the terms of the Creative Commons License. A copy of the license can be read at this address: http://creativecommons.org/licenses/by/2.0/3Entrepreneurs and enterprise

Entrepreneur is a term we hear often, but what do entrepreneurs do? What does entrepreneur and enterprise mean?Why do people set up their own businesses, rather than work for another firm?Some people set up a business on their own after being employed by another company, whereas others might start a new business as soon as they leave school or college.Entrepreneurial activity is called enterprise; being an entrepreneur is about having the desire and skills to set up a business.

Boardworks Ltd 2009# of 23Teachers note: Suggested answers include; to make more profit than could be earned in employment; as a result of being made redundant or being unable to find work elsewhere; to have greater independence.

Photo: Andresr, shutterstock.com4Non-financial start-up objectivesPeople may start up businesses for non-financial reasons.to pursue a hobby or personal interestto have contact with other peopleto do something challengingto achieve a social or environmental aim.These could include:

Boardworks Ltd 2009# of 23Teachers note: Social enterprises may aim to improve the quality of peoples lives, for instance, by paying farmers a fair price for their crops. Other goals might be to raise awareness of certain issues, raise money for charity and development, or improve or protect the environment. Examples of social enterprises include Traidcraft, Divine Chocolate and One Water.

Information about these organizations can be found at these addresses:www.traidcraft.co.ukwww.divinechocolate.comwww.onedifference.org

These weblinks were working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites.

Photo: 2009 Jupiterimages Corporation5Benefits of starting up a businessWhat other benefits are there of owning a business?

Boardworks Ltd 2009# of 23Teachers note: You may wish to create a worksheet from this interactive by cutting and pasting the following text:A successful business start-up can provide a number of benefits for its owners.These include:1. the opportunity to work and make decisions independently, rather than being told what to do2. the flexibility of working as and when you want to3. the chance to keep all of the profits made from your efforts, rather than a fixed wage or salary.These benefits can increase the motivation of the business owners, improving the chances of business success.

Possible suggestions for the questions on other benefits include: to use skills or experience that are not needed in current employment, to use an enjoyable hobby to make money, to provide an income if you cant get a job elsewhere, e.g. as a result of a recession.6Disadvantages of starting a businesshaving to acquire all of the skills necessary to run a business such as book-keeping, knowledge of consumers and employment lawhaving to take full responsibility for decision-makingStarting up and running a successful business is not easy, some of the most common problems encountered include:

having to work long hours, perhaps over the weekend, and taking few holidayshaving to accept a much lower income, or even none at all, until the business begins to make a profit. Boardworks Ltd 2009# of 23Photo: kristian sekulic, shutterstock.com7Make a table to display 3 advantages and 3 disadvantages of starting your own business. Boardworks Ltd 2009# of 23The dragons denWatch video then page 13. What skills does Levi have? then video 2. Boardworks Ltd 2009# of 23Entrepreneurial skills

Boardworks Ltd 2009# of 23Teachers note: As well as confirming and adding to students own ideas, this slide could be used as a basis for discussion as to what these skills mean and why they are important for creating a successful business.There are many skills and qualities that are useful when attempting to set up and run a successful business. Some of the most important include:- showing initiative- being able to plan ahead- enthusiasm and work ethic- persistence and determination when times are hard- ability to raise finance and manage cash flow- ability to take calculated risks.Taking calculated risksBusinesses face risks at all times, but the riskiest stage is usually at start-up. Around one third of all new businesses fail within the first three years.Why is it impossible to avoid taking risks when running your own business?Entrepreneurs have to take decisions that not only risk their own money and reputations but also those of others, such as other investors and lenders.Taking a calculated risk involves weighing up the potential negative consequences of a decision with the rewards that could occur if the decision is a good one.

Boardworks Ltd 2009# of 23Teachers note: It is important for students to understand that, because of the changing nature of the business environment, even doing nothing involves risk e.g. a previously successful product may lose sales because the business has failed to carry out market research into changing customer needs.

Photo: Christopher Hall, shutterstock.com11Business ideas Boardworks Ltd 2009# of 23The process of creative thinkingCreative thinking is a valuable skill for anyone setting up and running a new business. It involves looking at an existing situation and assessing its strengths and weaknesses in order to identify possible new approaches.

Think of a relatively new product, such as the iPhone. Why is it a good example of creative thinking?This may result in ideas for new products which satisfy customer needs more effectively.Entrepreneurs who can think creatively are likely to be more successful than those who rely on existing methods.

Boardworks Ltd 2009# of 23Teachers note: The iPhone is a combination of a mobile phone, a device for watching TV and film or listening to music and also offers 3G connection to the Internet this offers greater convenience to customers.13http://www.bbc.co.uk/news/technology-21796888 Boardworks Ltd 2009# of 23

Boardworks Ltd 2009# of 23Protecting new ideasNew product ideas need to be protected from competitors if a new business is to be successful.

Trademarks for business or product names, logos and symbols can also be registered at the Patent Office for exclusive use. A business that wants to protect its new product designs can apply for a patent. This can prevent other firms from copying it for up to twenty years.The main drawback for new businesses is that the fees charged by the Patent Office can be quite high, adding to costs.

Boardworks Ltd 2009# of 23Photo credit: skvoor, shutterstock.com16 Why is it important to be creative?

How can we protect our creativity? Boardworks Ltd 2009# of 23Why do new businesses fail?lack of market research

In 2009, around 36,000 companies in the UK were predicted to fail; many of these would not even survive their first year of trading.Some common reasons why new businesses fail include:

Can you identify two more possible reasons for business failure?worsening economic conditions.poor cash flow managementinadequate planninginsufficient financefailing to accurately estimate or control costs

Boardworks Ltd 2009# of 23Teachers note: Possible answers could include: over-estimating sales; not having the skills required to run a business; charging prices that are either too high or too low; and poor marketing.

Photo: Steve McWillian, shutterstock.com18Who wants to be an A* student?

Boardworks Ltd 2009# of 23Answers:VirginEntrepreneursLazinessSocial enterpriseCalculated riskPatent it36,000Business LinkIt creates unemploymentFraser Doherty19Glossary

Boardworks Ltd 2009# of 23Teachers note: To test students understanding of the topic, you may wish to ask them what each word in the glossary means before pressing to reveal the definition. Alternatively, you may wish to set students an extension or homework activity to research and define the terms. The definitions provided here can be used as an additional point of reference once they have completed the task.20