ENTREPRENEURSHIP

3209

A business is the production and/or sale of goods and/or

services to satisfy the needs, wants, and demands of

consumers with a purpose of making a profit or meeting a

specific goal.

Businesses come in all shapes and sizes!

Local (You tell me!)

Regional (Purity)

National (Tim Horton’s)

Global (McDonald’s)

1.1 WHAT IS A BUSINESS?

Profit is the income that is left after all costs and expenses are paid.

Expenses are those expenditures that are involved with running business, such as wages, as well as those assets that get used up in the process, such as paper and toner.

Costs are the amount of money required for each stage of production, such as the cost of raw materials.

Revenue is the total amount of money a business takes in.

Solvency is the abil ity to pay you debts and meet financial obligations.

BUSINESS BASICS

To be successful, a business must earn a profit, while keeping

both expenses and costs down!

Revenue – Expenses = Profit (Or Loss)

How can you increase profit?

Cutting costs

Increasing Revenue

What problems might you encounter with each?

BUSINESS BASICS

Goods – Items that can be seen or touched and, if attractive

enough, bought!

Services – Assistance provided, usually in return for a

payment, that satisfies needs and wants

Channels of distribution:

Brick and mortar stores – Wal-Mart

Telephone

Catalogues

Internet

BUSINESS BASICS

Unit 1

Topic 1.1

CONSUMER NEEDS AND

WANTS

How many times have you asked your parents for

something and they have said “no, you don’t need it” or

have you ever asked yourself when you are considering

buying something “Do I really need this”?

What is the difference between needs and wants – and

would everyone answer the same?

Need – An item necessary for survival

Examples include: Food, clothing or shelter

CONSUMER NEEDS AND WANTS

In this context, we’re

referring to

physiological needs

CONSUMER NEEDS AND WANTS CON’T

Want – An item not necessary for survival but that adds

pleasure and comfort to life

Examples include: …

How would you describe what a business is?

CONSUMER NEEDS AND WANTS CON’T

Cultura l d i f ferences – eg . a car. Some cul tures might cons ider a car a “want” or a luxur y i tem, whi le other cu l tures would consider t ranspor tat ion a necess i ty to get to work . In our cu l ture , most people would v iew e lectr ic i ty, running water, fue l to be necess i t ies o f l i fe or needs. Wi th chang ing technology and our heavy re l iance on the internet for (communicat ion, information, banking , etc ) i t could be argued that access to the internet i s a need .

Va lue d i f ferences – how people pr ior i t ize and judge thei r needs vs . wants can depend on thei r va lues . Back to school suppl ies o f internet access could be considered a “need” by some or judged to be a “want” by others . How a person would pr ior i t ize the impor tance of these i tems would be based on thei r own va lue system. Sometimes i t i s hard to dec ide i f something is a “want” or a “need” - that i s when we have to look at how we would pr ior i t ize the impor tance of each i tem to our sur v iva l and abi l i ty to car r y out ever yday l i fe .

Some i tems can be cons idered both a need and a want . For instance, food could be a need or a want , depending on the type of food.

You need to eat protein, vitamins, and minerals ( meat, nuts, or soy products to get protein, fruits, vegetables, yogurt , cheese, even breads to get vitamins and minerals. These basic kinds of foods are needs.

Ice cream is a want. You don't really need to eat ice cream to survive. You can eat it to get some vitamins and minerals, but other foods like cheese and yogurt give you more of those same vitamins and minerals without giving you the fat that ice cream does. Still, ice cream tastes good to many people. They like to eat it. They want it, but they don't need it. They like it, but they don't have to have it to survive.

NEEDS VS WANTS

Individual activity:

How would your family determine their needs vs. their wants

at the grocery store? Make a list of 15 items that would be

considered “needs” and another list of 15 items that would be

considered “wants”.

INDIVIDUAL QUESTION

A family in your neighbourhood lost their home during the

night to a fire and lost all of their possessions. Luckily,

everyone in the family got out safely although they were quite

shaken by the whole ordeal. The family did not have

insurance. There was a mom, a teenage boy (age 16) and a 6

month old baby girl. A local community group has donated

money to help get the family back on their feet – you and your

team have been asked to prepare a list of 14 items for each

family member as well as a (40 item) list for the household

starting with the most important needs. At the end you may

suggest some “wants” (no more than 5 per person and 10 for

the household), that the community may consider giving

additional funding for after the family’s needs have been met

initially.

GROUP ACTIVITY

Do you think having limited money to spend impacts the

decision on whether someone spends their money on “wants”

or “needs”. How would you describe your spending – does it

tend to be more “wants” or “needs”, do you think this will

change when you get older?

JOURNAL ENTRY

Producers are the businesses that make goods or provide

services.

Consumers are the people who buy computers, along with

those who have their computers serviced at computer-repair

shops.

Producers and consumers operate together to create a market

place! A marketplace is any location where producers and

consumers come together to engage in buying or selling

goods and services.

Ex. Mall, farmers market, restaurant etc.

THE ROLE OF THE CONSUMER

The consuming habits of Canadians tell businesses what

goods and services people want and how much they are

willing to pay for them!

Transition from business control of the market to consumer

control of the market.

Ex. “People can have the Model T in any colour –so long as it’s

black.”

Why the change?

Consumer demands and increased competition!

Why is competition good for both consumers and businesses?

CONSUMING HABITS

Today’s consumer wants access to a wide variety of cheap, reliable, goods and services.

Due to competition, if a consumer doesn’t l ike the price of a good or service at one business, they will simply go to another!

This is called Consumer purchasing power!

Thus businesses try to offer the best price they can. Price is partially determined by what the consumer is will ing to pay.

Ex. New cars starting at around $14 000

Consumers also influence the level of service!

CONSUMER INFLUENCE ON PRICE

1.) The customer is always right!

2.) If the customer is ever wrong, reread Rule 1!

THE TWO RULES OF DEALING WITH

CONSUMERS

Do you agree? Why or

why not?

Over time goods can become obsolete, meaning that people

no longer want them or that new or improved goods replace

them.

Can you give some examples of obsolete goods?

Services can also become obsolete when they are no longer

needed or wanted!

Question: has Netflix and online streaming made cable television

obsolete?

WHEN PRODUCTS BECOME OBSOLETE