Entrepreneurship Unit 3, Chapter 3 Page 101 Entrepreneurs Creative, self motivated, innovative, passionate and risk takers They have more than the average ability to build and grow a business and are passionate leaders who look to improve and expand their business goals and vision into many different environments Entrepreneurs are usually driven business people or workaholics General business knowledge and ability and management skills are vital to your success Skills, Traits and knowledge A range of skills are necessary for success in business and these skills are divided into 2 main categories Occupation Specific Skills Skills that are particularly handy in a specific organisation Eg. Small surfboard making business needs to be skilled in design, shaping and effective use of tools and equipment Generic Management Skills Skills that apply to most entrepreneurs regardless of the nature of the business Eg. Can make decisions, problem solve, communicate effectively, establish business goals Successful business operators make informed decisions based on knowledge developed from education, training and experience Informed Decision a decision which all information affecting the outcome of the decision is known Sir Richard Branson CZKroJCkH0CZKroJCkH0 Qualities of an Entrepreneur After viewing the YouTube clips contribute in a class discussion what were the traits, skills and tips Richard Branson had about being an entrepreneur?? THINK PAIR SHARE 5 minutes to list everything you can remember 5 minutes sharing your responses with a peer 2 minutes presentation with your partner on the points you had written down Class activity Think of an Entrepreneur Conduct research on the person Research must be based around how they became an entrepreneur, why they are successful what makes them successful, what companies they own Create a power point presentation to share with the class must go for at least 2 minutes. Include pictures, YouTube clips etc Upload power point to grade 11 BOM Moodle site Business Entrepreneurship Page 108 To gain a greater understanding of entrepreneurship, you need to investigate what motivates a person to go into business and how success or failure of a business can be determined. Business people have different reasons for going into a business. These could be: Personal I want to be my own boss Financial Im looking for financial security Social I want to provide a community service Entrepreneurs have more than just reasons or motives they also have vision, self motivation and self confidence to take risks and be innovative in their ideas Many cases the business idea concept is motivated by an innovative response to a challenge Sustaining innovations where existing products, services and processes are improved Disruptive innovation where radically different products, services, processes and technologies are created Example: Sustaining innovations: Improvement of the iPhone from the iPhone 2G to the iPhone 5s Example: Disruptive innovations: When Apple introduced the iPad was the first of the tablet generation that began the latest technologic craze Activities Complete activities 1,2,3, 5 of page 109 Determining success or failure of a business Not all business concepts will be successful. An early decision should be made on whether the business concept should be pursued. The first step is to undertake some market research prior to launching into business. Fail to plan and plan to fail Market Research Methods Market research provides valuable information about the potential of business ideas Research results can indicate that there is a market for the goods or services the business wishes to sell by providing information about: Who the customers are What needs and wants they have that you can satisfy Under what conditions they will buy The size of the market Results then guide the business towards future planning and operations Research methods include surveys, collecting general information about the market, buying research from specialist marketing firms Market Research of year 11 BOM Complete the handout provided (Kellogg's cereal) to see what cereal products would be best suited to the students at AIS These are the sorts of questions entrepreneurs would research to see what people want and how they can fullfill their wants. Measuring Performance Measuring performance (success or failure) is about making judgments on how well the business is going Accurate and worthwhile performance measurement involves the following basic steps: Get a picture of where the business is at present Collect information on sales turnover, customer satisfaction, levels of expenses, profit levels Set the goals of the business Establishing what the business is to achieve over a period of time in selected performance areas Put in place systems and processes that will give the business opportunities to reach the set goals Eg you might commit to a new advertising strategy to increase public awareness and profit of your product Make a judgment about whether or not set goals have been met Judgment is made on where the business is now compared to where it was before Activity Create a poster illustrating the steps in measuring performance p111 Include diagrams, colours, informative text Intrapreneurship and the entrepreneurial organisation Intrapreneurship businesses looking for innovation in the development of new goods, services and procedures within the organisation Work within the existing business structures to transform ideas into profitable ventures Activities Activity page 113 Stop and Think Complete in pairs Create a power point to present your findings to class Upload power point to 11 BOM Moodle site Activity page 114 Question 1 Case Study accumulative task Business Entry You can enter business in a number of ways Buying or investing in an existing business Starting a new business Inheriting a business Entering into a franchise agreement The Business Cycle The business cycle describes the process that turns an idea into a business. Copy diagram of the 5 step business cycle on page 116 Work with your peer to produce a poster on 1 of the five steps (teacher to instruct to ensure all 5 steps are covered). Present the poster to the class. Test your understanding Read Case study on page 117 Answer question 2 a and b and question 3 that relates to the case study Do the paper quiz uploaded to Moodle (Term 2 Week 1) Valuing a Business (means assessing what its worth to buy, and also the business potential as a business) When establishing the value of an existing business or a potential business idea must consult with experienced business brokers and accountants to gain the true value of the business Business owner is likely to overvalue the business to gain a higher price if selling Values of all physical assets (stock, equipment etc.) are easily estimated at a realistic and fair market price However, goodwill is more difficult to estimate Goodwill- the value assigned to the sellers business idea and customer base which has been built up over a period of time Activity evaluating a business Find a business for sale that would be of interest to you using the Internet and prepare a set of questions you would need to ask the current owner regarding the value and potential of the business.the Internet Sources of Advice Group Discussion: Where do you go for good advice? How satisfied are you with the types of advice you typically seek and use? If you were a business owner, what sources of advice would you use? Different Sources of Advice Main sources of advice to be covered: Networks Industry associations Government departments and agencies Professionals Accountants Solicitors Networks- connect people Idea of a network is to connect people Zonta is one example of a global network members include business executives and professionals who work together with the goal of improving the legal, political, economic, educational, health and professional status of women Industry associations Industry association is a formal network established specifically for the mutual benefit of members of a particular profession Examples in Australia include: Queensland medical association Institute of Chartered Accountants Government Departments and agencies Government bodies provide support and advice including phone advice, referral, the production of regular pamphlets and maintenance of websites for information Governments also establish authorities to give direct advice and support to businesses Khalifa Fund provides training for entrepreneurs Khalifa Fund Al Tomooh provides funding for entrepreneurs Al Tomooh Professionals No one has knowledge to operate a business independently and will at some time need assistance of specialized professional knowledge Accountants and Solicitors are most used professionals in the business world Accountants: person whose job is to keep or inspect financial accounts Prospective business owner should consult an accountant before going into business and then often throughout the life of the business Copy in your books figure 3.10 this demonstrates the advice and support provided to a business by an accountant Solicitors: a member of the legal profession qualified to deal with conveyancing, the drawing up of wills, and other legal matters. Solicitor should be consulted regularly, starting before the business is established or purchased Copy figure 3.11 into your workbooks This figure demonstrates the areas of advice and support provided by solicitors Activities Page 124, questions 1,2,3 Complete individually and then share responses with the class Pathways to Business Entry Many ways of entering the business world Buying in an existing business Investing in an existing business Starting a new business Inheriting a business Franchising Buying an existing business Buying an established business, you must consider the following: Negotiation of a fair price with the seller Quality of the business Legal and procedural aspects of the takeover process Page 126 activity 1 a-c. Using the following website for-sale-in-Dubaifor-sale-in-Dubai Copy figure 3.1 page 125 into your workbooks Table listing the advantages and disadvantages of buying into an existing business Investing in an existing business Prospective buyers will often look at investment opportunities to enter the market and consider investing money in an existing business You can be an investor that plays an active role in the business or silent role in the business If you are a silent partner you have no say in the day to day running of the business but is still entitled to receive a share of the profit Activities Page 126 activity 1 and 2 Understanding investment options Starting a new business Major considerations if starting a new business: Operators capacity to develop all aspects of the business The timeframe involved to get the business operational Finding a suitable location Undertaking market research Uncertainty as to the cost of establishing and running the business Establishing the customer base Entrepreneurs thrive on the challenge of establishing a new business as they can implement their own personal style and gain great personal satisfaction as the business grows Inheriting a business Many businesses are family businesses and have been passed down from one generation to another Often children/relatives will have had some involvement in the business People who inherit a business often expand and diversify its operations Research a famous business person who has inherited a family business Activity Research this person and highlight any changes/process that has been made to the business since the inheritance Report your findings to the class Franchising Franchising is a growing form of business operation around the world franchise opportunities In a franchise agreement, one party of the franchisor who owns the trademark and the business concept The other is the franchisee, the person or business provided with the licence to operate a business with the trademark and business concept Copy figure 3.2 and figure 3.3 into your workbooks p Contains important information about the advantages and disadvantages of being a franchisor and franchisee Activity Page 132 Question 1 a and b Question 3 Activity In groups of 3 brainstorm which pathway you would consider to be the most preferred option You must make mention of the advantages and disadvantages of your business pathway and why you chose it Report your findings to the class