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1.1Enterpriseandentrepreneurship

1.1.3Theroleofbusinessenterprise

Keyelementstothistopic

Reasonsforstartingabusiness

Businessenterpriseand

entrepreneurship

Purposeofbusiness

Businessexiststoproducegoods andservices onacommercialbasisto

customers

Whataregoodsandservices?

Goods

• Goodsareactualobjects.

• Theycanbetouched,feltandheld.

• Theyareproducedandconsumed.

Services

• Servicesareactivities.

• Theyareprovidedforyoubyotherpeopleorbusinesses.

Whatisabusiness?

Whichofthesearegoodsandwhichareservices?

Justaminute

Youhave60secondstowritedown2thingsyou

needand2thingsyouwant

Whatisthedifferencebetweenthetwolists?

Whatareneedsandwants?

Needs• Needsarethosegoodsandservicesthatwehavetoconsumeifwearetolive.

• Theseincludefood,shelterandwarmth.

Wants• Wantsaregoodsandservicesthatwewouldlike,butdonothavetoconsumeinordertosurvive.

• Theseincludeholidays,smartphones,entertainmentandotherluxuriesthatwemaylike,butdonotneed.

Inordertosatisfycustomersabusinessneedstoidentifyitscustomersneedsandwants.

Whatisenterprise?

Theterm“enterprise”hastwocommonmeanings.

Firstly,anenterpriseissimplyanothernameforabusiness.

Secondly,andperhapsmoreimportantly,enterprisedescribestheactionsofsomeonewhotakesariskbysettingup,investinginandrunning

abusiness.

Whatisanentrepreneur?

“someonewhotakesacalculatedriskthroughstartingabusiness.”

Whatisanentrepreneur?

•taketheinitiativeintryingtoexploitabusinessopportunity.

•taketimetounderstandandcalculatetherisksinvolved.

•makeaninvestment,oftenoftheirownmoney,tosetupthebusiness.

•goahead,despitetheriskthatthebusinessventuremightfail.

TheEntrepreneur(s):AlanandGaryKeery,CerealKillerCafé

World’s first international cereal café offering 120 different cereals.

They sell British, American and global cereals.

The idea came to them one morning when they had a craving for cereal.

Give3possiblereasonswhyAlanandGarydecidedtosetuptheirownbusiness

Reasonsforstartingabusiness

Makingaprofit

Investingmoney

Work-lifebalance

SkillsandInterest

Beingtheirownboss

Canyouthinkofanyotherreasons?

AddingValue

Inputs OutputsTransformationProcess

Addingvalueisthetransformationprocessdescribeswhathappensinsidethebusiness.Thisiswherevalueis

addedtoinputstocreateoutputs

Abusinessseekstoaddvaluetotheproducts/servicesitprovides

Whatismeantby“AddingValue”?

Addingvalue=thedifferencebetweentheprice ofthe

finishedproduct/serviceandthecost oftheinputsinvolvedinmakingit.

ExampleofValueAddedCalculation

Salesrevenue1,000unitssoldfor£20each

=£20,000revenueCosts

Tomake1,000units:Rawmaterials- £7,500

Labour- £5,000Otherproductioncosts- £2,500

Totalcosts=£15,000Addedvalue£20,000less£15,000

=£5,000

WaystoAddValue

• Buildabrand• Deliverexcellentcustomerservice• Addproductfeaturesandbenefitsthatcustomerswant

• Operateefficiently

www.cerealkillercafe.co.uk

CerealKillerCafe

Whatgoodsandservicesdoes theCerealKillerCaféprovide

What customerneedsisthebusinessmeeting?

Howhavetheyaddedvaluetotheirbusiness?

ReadthearticleontheCerealKillerCaféandvisittheirwebsite.Notedownthefollowing:

Caféofferingachoiceof120differentbreakfastcereals

ConvenientandquickalternativeforbreakfastWidechoiceofqualitycerealsQuirkyanddifferentsurroundingsGoodcustomerservice

Strong,funbrandwithpersonalityUSPcreated– cafésurroundingsandfoodofferedSourcingunusualcerealsnotwidelyavailable

Addingvaluetoabiscuit

Crumbsareanindependentbiscuitmanufacturerwhospecialiseinhandmadeshortbreadbiscuits.Facingincreasedcompetitionfrommajorbiscuitmanufacturerstheyneedtocomeupwithaplanofhowtheycanremaincompetitive.

Workinginpairs,youneedtoidentifythreepossibleways,Crumbscouldaddvaluetotheirshortbreadbiscuits.

BusinessBenefitsofAddingValue

• Chargeahigherprice• Createapointofdifferencewithcompetitors

• Protectionagainstcompetitorsofferinglowerprices

• Focusesbusinessonitstargetmarketsegment

Whatisenterprise?

Theterm“enterprise”hastwocommonmeanings.

Firstly,anenterpriseissimplyanothernameforabusiness.

Secondly,andperhapsmoreimportantly,enterprisedescribestheactionsofsomeonewhotakesariskbysettingup,investinginandrunning

abusiness.

Whatisanentrepreneur?

“someonewhotakesacalculatedriskthroughstartingabusiness.”

Whatisanentrepreneur?

•takestheinitiativeintryingtoexploitabusinessopportunity.

•takestimetounderstandandcalculatetherisksinvolved.

•makesaninvestment,oftenoftheirownmoney,tosetupthebusiness.

•goesahead,despitetheriskthatthebusinessventuremightfail.

Start-UpCaseStudy– LoveCocoa

Wheretheideacamefrom

“IwassearchingforanonlineservicethroughwhichIcouldpostachocolategiftdirectlytomyMumforherbirthday,butIcouldnotfindaservicewhichwasnextdayandthatfittedthroughtheletterbox.Mostretailersrequireitemstobesignedforandthatruinsthesurprise.”

ThenextslideshowsanumberofentrepreneurialskillsandcharacteristicspickthethreeyoubelievewillbethemostimportantforJamestoshowtomakethestartupofLoveCocoasuccessful

LoveCocoawaslaunchedinJune2016

Anonline,ethical,handmadechocolategiftcompany.Eachbardesignedtofitthroughtheletterboxalongsideacard,withfreenextdaydelivery.

LoveCocoa

MostimportantcharacteristicsforJamestoshow?

Canyouidentifyanyothers?

Howmanyentrepreneursonthenextslidecanyou

name?

Whathasmadethemsuccessful?Whatqualitiesdotheyhaveincommon?

RichardBransonVirgin

Startedmailorderrecordcompany

Startupcapital£300

JamesDysonInventorandfounder

DysonTechnologicalchangeandinnovationkeytosuccess

ofthebusiness

ElonMuskTech

entrepreneurTeslaMotors,Paypal andSpaceX

DeborahMeadonGrewherfamilyleisure

andholidayparkbusiness,Weststar

OprahWinfreyHarpoInc

TVpresenterandmulti- mediaentrepreneur

RichardReedCo-founderofInnocentdrinks

CharlesDunstoneCarphoneWarehouse

Stelioshaji-ioannouFounderofeasyJet

easyGroup nowcontainsmanydifferentbusinesses.Canyounameanyothers?

MarkZuckerbergFacebookCo-founder

DeniseCoatesFounderofonlinebetting

company,bet365

WatchthecliponRichardBranson,whatentrepreneurialskillsandcharacteristicsdoesheshow?

Ataleoftwoentrepreneurs

JamesandRichardareatdifferentstagesoftheirentrepreneurialjourney.Howdotheentrepreneurialskillscompare?Aretherecharacteristicswhicharelikelytobemoreimportantthanothersgiventhestageoftheirbusinessesandcareers?Justifyyourthoughts.

Summary– whatmakesagoodentrepreneur?

Innovative

Risk-takers

Hardworking

Organised

Persuasive

Leadershipskills

Lucky