Introductions

Please arrange yourselves in

alphabetical order
Please arrange yourselves
from youngest to oldest
Groups
Expectations
• 1 note book per student that will be used for note taking
• Track learning progress with learning outcomes document
• Bring both to school everyday
• Arrive to class on time
• Good attitude, ready to work, use your time in class constructively
Project: Investment Challenge - $10,000 on the NYSE
Objective: Pick a company on the NYSE to invest $10,000 in. Analyze
financials, market size, growth potential.
• Steps:
• Research: Choose a company, analyze financials, evaluate market,
assess growth.
• Create a Sales Pitch: Introduce company, outline investment
reasons, provide evidence, assess risks, conclude.
• Present: 5-7 minute pitch (PowerPoint can include video, everyone
in the group must present).
• Evaluate: Peer review and teacher assessment.
Unit 1 Business and its environment
Chapter 1 – Enterprise
Learning Objectives
Aim (s)
• To develop an understanding of business activity and enterprise.

Objectives
• Assess the purpose of business activity and the concepts of opportunity
cost and added value.
• Analyse the key characteristics of a successful entrepreneur, major
challenges faced by entrepreneurs and why do new businesses often fail.
• Assess the importance of enterprise, entrepreneurs and social
enterprises to a country’s economy.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Warm-up Exercise!
AO1 – Knowledge and Understanding

Define what is business activity? (2Marks)

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Define what is business activity? (2Marks)

It is the process of producing

goods and services to satisfy
consumer demand.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

What is Business Activity?

Purpose of Business Activity:
• Aim: Make things people need (like food or clothes).
• Adding Value: Turn raw materials (like wheat) into finished goods (like
bread).
• Impact: Helps us live better lives, not just make things ourselves.

What Do Businesses Do?

• Find what customers want.
• Buy resources to make products.
• Make products to meet needs, often to earn money.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Customers and Business Activity

Customers Buy:
• Consumer Goods: Physical things like a toy or a car.
• Consumer Services: Non-physical things like a haircut or a movie
ticket.

• Role of Business Activity:

• Uses limited resources (like oil) to make life better.
• Makes things for us, so we don't have to do it all ourselves.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Factors of production
Businesses Need These to Work:

• Land: Natural resources (like trees for paper).

• Labour: Workers (like factory workers or managers).
• Capital: Money and things to help work (like computers or machines).
• Enterprise: Risk-taking leaders (like entrepreneurs who start new
companies).
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Mind Map – Resources that a business needs

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

1.Pair Up: Find a partner.

2.Pick a Business: Think of a shop or service you know.
3.In Your Notebooks, Answer:
• Purpose: What does it do? How does it add value?
(e.g., Bakery = make bread)
• Customers: What does it sell? Goods or services?
(e.g., Salon = haircuts)
• Factors of Production: What does it need? Think:
natural things (land), workers (labour),
money/machines (capital), leaders (enterprise).
4.Share if Time Allows: Discuss with the class.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Understanding Adding Value

• All businesses should ‘add value’ to a product in order to
charge a higher price than they paid for it!

• Definition: Added value is the difference between the cost of

purchasing materials and the price the finished goods are
sold for.

• Added value is not the same as profit as businesses must pay

costs such as rent and labour.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Discussion: How’s value added to the following 2 businesses

A jewelry store LINDT CHOCOLATE

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

1. Jewellery Shop:
 Attractive displays, fittings, and packaging.
 Knowledgeable assistants.
 May allow for higher prices, adding value.

2. Sweet Manufacturer:
 Advertising for brand recognition.
 Attractive packaging.
 Selling through established shops, not vending
machines.
 Higher prices through branding add value.
Business Activity: Added Value (a how to guide)

1. Convenience & speed: In today’s world, customer expect stores to

be near and want fast service. People will pay extra to save time.
Delivery is now very popular for takeaways.
2. Good design: Customers are often happy to pay more for unusual or
unique designs, which let them feel they have a special product.
3. Packaging: Can make products stand out and add value.
4. Quality: as incomes rise, customers increasingly want high quality
goods that will last.
5. Brand name: These seem important to people to give them status.
6. Unique selling point (USP): that certain je ne sais quoi that makes
the product stand out from the other competitors!
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

GROUP ACTIVITY:

Activity 1.1 - Page 6

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Activity 1.1 - Page 6

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Economic Activity, Scarcity, and Choices

• Economic Problem: Insufficient goods to satisfy all needs
and wants, leading to choices.
• Scarcity: Affects both rich and poor; forces choices for
greatest benefit.
• Decision-Makers: Governments, businesses, workers,
charities, etc., all must make choices.
• Examples: Choosing between buying a car or a vacation; a
government deciding between funding education or
healthcare.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Opportunity Cost
The principle arising from the need to choose.
Definition: Value of the next most desired
product given up when making a choice.
Application: Applies to all economic decision-
makers.

Scarce = in short supply

LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Opportunity Cost Decision-Making Activity

Objective: Understand and apply opportunity cost in business scenario.

Create a business scenario where you can apply the

concept of opportunity cost.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

The Dynamic Business Environment

Dynamic Business Environment: Changes that affect business stability.

• New Competitors: More businesses offering similar products. Example:

A new gym opening nearby.
• Legal Changes: New laws or regulations. Example: New health and
safety standards.
• Economic Changes: Changes in consumer spending. Example:
Recession leading to less luxury spending.
• Technological Changes: New technology affecting products or
processes. Example: Digital downloads affecting CD sales.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Types of Businesses - Understanding the Differences

• Local Businesses: Operate in specific local areas, no plans to expand
beyond. Example: Neighborhood bakery.
• National Businesses: Across the entire country, not internationally.
Example: Country-wide retail chain.
• International Businesses: Sell in more than one country, may not
have physical operations there. Example: Online store shipping
globally.
• Multinational Businesses: Physical operations in multiple countries.
Example: Global tech company with offices worldwide.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Why Some Businesses Succeed

Success Factors:
• Understanding Customer Needs: Knowing what customers want.
Example: A pet store offering organic pet food.
• Efficient Management: Controlling costs effectively. Example: A
factory using energy-efficient machinery.
• Flexible Decision-Making: Adapting to changes. Example: A
bookstore expanding into e-books.
• Sufficient Financing: Having enough money for operations and
growth. Example: A startup securing venture capital.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Why do new businesses often fail?

Failure Factors:
• Poor Record-Keeping: Not tracking important information.
Example: A florist forgetting delivery schedules.
• Lack of Cash: Not having enough money for daily
operations. Example: A café unable to pay rent.
• Poor Management Skills: Lack of leadership or planning.
Example: A talented chef failing as a restaurant owner.
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.

Why do new businesses often fail?

Minimizing Risks:
• Gain Experience or Training: Learning necessary skills. Example:
Taking a marketing course before opening a shop.
• Employ Experienced Managers: Hiring skilled leaders. Example:
Bringing in a seasoned manager for a tech startup.
• Maintain Good Bank Relations: Ensuring financial support.
Example: Negotiating a line of credit with a bank.
• Keep Accurate Records: Tracking all transactions. Example: Using
accounting software and keeping physical receipts.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

The role of an entrepreneur

Roles:
• Idea Generation: Creating or adapting ideas. Example: A new app for pet care
services.
• Business Planning: Crafting plans. Example: A detailed plan for a sustainable
clothing brand.
• Investment: Using personal funds. Example: Investing in a local organic farm.
• Management & Risk Acceptance: Running the business and embracing failure.
Example: Managing a tech start-up, knowing the market risks.

Intrapreneurs: Employees innovating within a company. Example: Developing a

new product line in a cosmetics company.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Characteristics of an entrepreneur
Draw the outline of a body in your
notebook.

• Write the characteristics of a successful

entrepreneur around the body!
• Describe them and give examples
• Compare your ideas
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Successful entrepreneurs and intrapreneurs possess:

• Innovation: Finding unique opportunities. Example: A subscription service
for rare books.
• Commitment & Self-Motivation: Hard work and ambition. Example:
Building a fitness coaching business from scratch.
• Multi-Skilled: Handling various tasks. Example: A restaurant owner
managing marketing, cooking, and finances.
• Leadership Skills: Inspiring others. Example: Leading a software
development team.
• Self-Confidence & Resilience: Overcoming setbacks. Example: Re-
launching a failed product with improvements.
• Risk-Taking: Willingness to invest personally. Example: Funding a new
line of eco-friendly cleaning products.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Barriers to Entrepreneurship -
Identifying Opportunities and Financing
Barriers to Entrepreneurship: Challenges that must be overcome to turn business
ideas into reality.
Lack of a Business Opportunity:
• Sources of Ideas: Skills, hobbies, previous employment, franchising, market
research.
• Common Industries: Fishing, crafts, building trades, hairdressing, computer
repairs, cafés, childminding.
• Example: A hobbyist in jewelry making turning passion into a business.
Obtaining Sufficient Capital (Finance):
• Challenges: Insufficient savings, lack of knowledge about support, no trading
record, poor business plan.
• Example: Struggling to secure a loan due to lack of previous business success.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Barriers to Entrepreneurship - Location,

Competition, and Customer Base
Cost of Good Locations:
• Challenges: High costs, distance from market potential, lack of status, family tensions, work-life
balance.
• Example: A home-based website designer vs. a hairdresser needing a prime location.
Competition:
• Challenges: Established businesses with greater resources and market knowledge.
• Strategies: Offering unique products or better customer service.
• Example: A new café offering specialty items to compete with established chains.
Lack of a Customer Base:
• Challenges: Building customer numbers quickly, encouraging repeat business.
• Strategies: Personal customer service, knowledgeable pre- and after-sales service, unique
requests.
• Example: A new computer repair shop providing personalized, on-call support.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Activity 1.3
1. Farah's Business Challenges:
Finance: Has savings and a willing investor (mother), but
needs a bank loan for the remaining of the $15,000
estimate.
Premises: City-centre too costly; considering less ideal
out-of-town locations.
Skills: Lacks financial skills; options are hiring an
accountant or time-consuming evening college courses.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Activity 1.3
2.Opportunity: Differentiates by offering dressmaking lessons and selling
dresses.
Skills: Strong in dressmaking; needs to enhance business and accounting
skills.
Leadership: Unclear, but past disagreements hint at passion or
interpersonal challenges.
Determination: Remains committed despite startup challenges.
Evaluation:
Success depends on market demand, external factors, and securing
finance.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.

Understanding Business Risk and Uncertainty

Business Risk:
• What Is It? A measurable chance something might go wrong.
• Can It Be Reduced? Yes, through careful planning and learning from others'
mistakes.
• Example: If 3 out of 10 clothing stores fail, the risk is 30%. Learn why they failed
to reduce your risk.

Business Uncertainty:
• What Is It? Unpredictable events that can't be planned for.
• Can It Be Reduced? No, it's impossible to foresee.
• Example: COVID-19 caused unexpected problems for many businesses.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Impact of enterprise on a country’s economy

LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Impact of enterprise on a country’s economy

• Employment Creation - new businesses often hire people – reducing the
unemployment rate.
• Economic Growth
• New businesses create wealth which is spent at other businesses creating a
cycle of economic growth.
• This increases living standards for people
• It also increases tax revenues for the government
• Firm’s survival and growth
• It is important that businesses survive to support their workers
• The bigger firms get, the more people they employ and the more the
economy can grow
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Impact of enterprise on a country’s economy

• Innovation and technological change – new ideas can help
develop an economy and further inspire other businesses to
innovate
• Exports - increase the international competitiveness
• Personal development - starting and manage a business develops
skills which others can learn from and go on to create further
businesses
• Increased social cohesion - increased job opportunities reduces
social problems and increases cohesion amongst groups.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.
Entrepreneurs vs. Intrapreneurs - Venn Diagram Activity
Objective: Understand the similarities and differences between entrepreneurs and intrapreneurs.
Task:
• Draw Two Overlapping Circles: Label one as "Entrepreneurs" and the other as "Intrapreneurs."
• Differences: Write unique characteristics in non-overlapping parts (e.g., Entrepreneurs: "Starts
new businesses"; Intrapreneurs: "Innovates within existing business").
• Similarities: Write shared characteristics in the overlapping area (e.g., "Takes risks," "Drives
innovation").
• Summary: Write a brief summary of findings.
Materials Needed: Paper, pencil, colored pencils or markers (optional).
Example:
• Entrepreneurs: Starts new businesses, personal risk, personal rewards.
• Intrapreneurs: Innovates within existing business, risk taken by the business, rewards to the
business.
• Both: Takes initiative, drives innovation, shows creativity.
Note: Complete the Venn diagram in your notebooks and be ready to share with the class.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Intrapreneurship - Being Entrepreneurial Inside a Company

What Is an Intrapreneur? An employee who acts like an entrepreneur inside a company.
How Is It Different from an Entrepreneur?
• Activity: Entrepreneurs start new businesses; intrapreneurs innovate inside existing
ones.
• Risk: Entrepreneurs take personal risks; intrapreneurs' risks are taken by the company.
• Rewards: Entrepreneurs benefit personally; intrapreneurs benefit the company.
Why Is Intrapreneurship Good?
• Brings Fresh Ideas: New products or ways to sell.
• Solves Problems Creatively: Finds new solutions to old problems.
• Encourages Innovation: Makes change exciting.
• Stays Competitive: Keeps ahead of rivals.
• Keeps Talented People: Lets employees be creative without leaving the company.
LO2: The role of the intrapreneur.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Activity – Impact of enterprise on a country’s

economy
• Then research a Businesses in Vietnam and provide a description of
their work and how they impact the economy.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Social Enterprise
• Social enterprise: a business with mainly social objectives that
reinvests most of its profits into benefiting society rather than
maximising returns to its owners.

• What social objectives may a business have?

• Do you know of any social enterprises?

LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Social Enterprise - Features

Social enterprises:
• Directly produce goods or provide services
• They have social aims and use ethical ways of achieving them
• They need to make a surplus or profit to survive – they do not rely on
donations as charities do

Social
Charity
Enterprise
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Objectives of a social enterprise

• Economic: Make a profit (surplus) to reinvest back into the business
and provide some return to the owners
• Social: provide jobs or support for local, often disadvantaged
communities
• Environmental: to protect the environment and to manage the
business in an environmentally stable way

• These three objectives are referred to as the triple bottom line.

LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Introduction to Business Plans - Create Your

Mini Business Plan
Task:
• Choose a Business Idea: Think of a small business idea you'd like to explore. It could be a café,
a pet-sitting service, a tech gadget, etc.
• Write a Mission Statement: What is the purpose of your business? What are its values? Write a
brief mission statement.
• Identify Target Customers: Who will buy your product or service? Describe your target
audience.
• Outline Products/Services: What are you selling? Describe the products or services.
• Determine Start-up Costs: Estimate the initial costs to start the business (e.g., equipment, rent,
marketing).
• Create a Simple Marketing Strategy: How will you attract customers? Outline a basic marketing
approach.
• Identify Potential Challenges: What obstacles might you face? How could you overcome them?
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Introduction to Business Plans - Create Your

Mini Business Plan
Example for Guidance:
• Business Idea: Eco-friendly café.
• Mission Statement: "Serving fresh, sustainable food in a community-focused
environment."
• Target Customers: Health-conscious individuals, eco-friendly community members.
• Products/Services: Organic meals, reusable coffee cups.
• Start-up Costs: $10,000 for kitchen equipment, rent, initial marketing.
• Marketing Strategy: Social media promotion, local partnerships.
• Challenges: Competition with other cafés, sourcing organic ingredients.
Note: Please complete the mini business plan in your notebooks. You'll refer back to this as
we delve deeper into business planning.
Discussion: Be prepared to share your business idea and key components of your plan with
the class.
LO3: The role, benefits and limitations of a business plan.

The Business plan.

A plan for the business that shows all the elements of the business such
as description, management, marketing strategy, finance, operations
etc.

It is unlikely the business will receive investment or a bank loan without

it.
LO3: The role, benefits and limitations of a business plan.

The Business plan.

Benefits:
Needed to obtain Finance
Helps the owner think carefully about SWOT and potentially reduce risk
Gives the business clear direction

Limitations:
Can be overly time consuming
Can give a false sense of security
Can make the business inflexible
LO1: Assess the purpose of business activity and the concepts of opportunity cost and added value.
LO2: Analyse the key characteristics of a successful entrepreneur, major challenges faced by entrepreneurs and why do
new businesses often fail.
LO3: Assess the importance of enterprise, entrepreneurs and social enterprises to a country’s economy.

Exam Question Past Paper

• Paper 1 – Analyse two qualities of a successful entrepreneur. [8]

• Which assessment objective is this question assessing you on?

• This will assess you on A01 A02 A03