Enterprise and entrepreneurship
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Para educadores: diapositivas de la lección, apuntes de repaso listos para usar sobre Enterprise and entrepreneurship (Business Studies, Business in the Real World) — úsalos en tu lección, o presenta el tema como una actividad interactiva de clase que tus aprendices juegan como un juego en vivo.
Apuntes de la lección
Why businesses exist
- Businesses produce or provide goods and services to meet needs and wants. A tangible good is physical; a service is an activity or benefit, and many offers combine both. The basic needs/wants distinction is contextual rather than a judgement about every individual purchase.
- Scarcity means resources are limited relative to possible wants and uses, creating choices. Opportunity cost is the benefit of the next best alternative forgone. In the fictional Saturday example, choosing a product trial instead of the best alternative of £100 paid work gives a £100 forgone benefit, assuming no other preferred alternative.
A next-best alternative is forgone
Entrepreneurs
- An entrepreneur identifies an opportunity, organises resources and makes decisions while accepting uncertainty in starting or developing a venture. Enterprise can also occur within existing organisations. A venture need not depend on a completely original invention.
- Useful skills include creativity, communication, organisation, leadership and learning from evidence. Calculated risk means assessing possible outcomes and exposure, not taking the largest gamble. Caution or anxiety is not proof that someone lacks entrepreneurial ability; teams can combine complementary skills.
Enterprise skills guide action
Risk and reward
- Potential rewards include profit, independence, satisfaction and social outcomes. They are not guaranteed, and independence or flexible hours remain constrained by customers, finance and operating demands. Starting a business may involve substantial time and stress.
- Cash shortfalls, insufficient viable demand, weak management or competitive pressure can contribute to failure without making it inevitable. Research, trials, contingency plans and forecasts support decisions but cannot remove every uncertainty. Compare the risk and opportunity cost with the benefits; stopping or adapting may be sensible.
Risk and reward are uncertain
Spotting opportunities
- A market gap is an inadequately served customer requirement. Test whether enough customers are willing and able to pay a viable price; a lack of competition can also reflect weak demand. Opportunities can arise from changed preferences, technology or an improved way of meeting an existing need.
- Invention develops a new idea, product or technology; innovation puts a new or significantly improved idea into practical use. Under the simplified materials-based measure here, added value = selling price − bought-in materials and components cost. Design, quality or service may support a higher price, but can add costs.
- Fictional product: price £12 minus bought-in materials £4 gives £8 added value. If other allocated business costs are £6, profit is £2. This shows why added value is not all profit; use the definition and cost categories stated in the task.
Added value is not all profit
Why start a business
- Motives can include independence, income, personal interest, challenge, social benefit or dissatisfaction with employment. Redundancy may lead someone to consider self-employment, but available funds, skills and suitability differ; it is not a requirement or guaranteed good choice.
- A prospective owner can test the customer problem, price, competitors, costs and resource needs. A promising idea still requires a feasible delivery and funding plan. Paid work, training or another venture may be the next best alternative when assessing opportunity cost.
Test an opportunity before committing
Stages of start-up
- Start-up planning commonly involves shaping an offer, researching and testing demand, assessing costs, planning operations and cash, arranging feasible finance and preparing a launch. These steps can overlap and repeat rather than forming a universal one-way checklist.
- The factors of production are land (natural resources), labour (human effort and skills), capital (produced equipment used in production) and enterprise (organising, deciding and taking risk). Money can fund capital equipment but is not itself the oven or machine in this production-factor example.
Start-up work may repeat
Diapositivas
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Preguntas de práctica
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1.What is a need?
Easy- Asomething essential for survival
- Bsomething nice to have
- Ca luxury
- Da hobby
2.What is a want?
Easy- Asomething essential
- Ba law
- Ca tax
- Dsomething desired but not essential
3.What is enterprise?
Easy- Aa shop
- Ba bank
- Cthe skill of spotting and acting on business opportunities
- Da type of tax
4.What is a good?
Easy- Aa tax
- Ba physical product
- Ca service
- Da law
5.What is a service?
Easy- Aan activity or benefit that can satisfy a need or want
- Ba physical product
- Ca tax
- Da bank note
6.What does scarcity mean?
Easy- Aresources are unlimited
- Bresources are free
- Cresources are useless
- Dresources are limited relative to wants and possible uses
7.Which are possible rewards of entrepreneurship rather than guarantees?
Easy- Ano risk
- Bpaid holiday only
- Cprofit, independence or personal satisfaction
- Dguaranteed wages
8.What is risk in business?
Easy- Aa wage rise
- Bthe chance of losing money or failing
- Ca guaranteed profit
- Da tax rebate
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