Unit 1Topic 1.2

Showing Enterprise

What is enterprise?

Taking risks, showing initiative, and a willingness to

undertake new ventures

Examples of entrepreneurs:

Sir Richard Branson

Sir Alan Sugar

Laura Ashley

Jude Gomila (born June 23, 1984) is a British entrepreneur and one of the co-founders of the website Heyzap. Gomila grew up in Harrow, London and attended Nower Hill High School. He then graduated from the University of Cambridge with a Masters in Engineering and Management.

During his final year at University, Gomila started Sugar Global, an electronics brand specialising in the sale of digital photo frames to UK stores such as Harrods, Selfridges, Amazon & Firebox.com.

Examples of entrepreneurs:

He invented this:

and these:

and this:

James Dyson invented these products, he realised the potential to make money and took the risk of setting up his own business in order to sell them for a profit.

Goods and Services

Goods• Tangible (they can be touched)• Physical (you can see it)• Examples: a car, a pair of scissors, a

TVServices• Intangible (they cannot be touched)• Non-physical (you cannot “see” it)• Examples: a taxi journey, a hair cut, a

TV programme

Showing EnterpriseAn entrepreneur is someone who:• Is willing to take risks • Shows initiative • Is willing to undertake new venturesTo be an entrepreneur, you need the following skills:

EnterpriseSkills

Risk Taking

Showing Initiative

Willingness to undertake new ventures

On the worksheet …

REASONS• Tick FIVE

reasons why you think a person might want to start up their own business

• Rank them in order of priority

QUALITIES• Tick FIVE qualities

that you think an entrepreneur needs to successfully start up their own business

• Rank them in order of priority

www.businesslink.gov.uk/

Reasons QualitiesWant:• To be their own boss• Make the major decisions• Keep all the money that

they make• Use their skills (eg car

mechanic)• Freedom to work when

they want to• Develop an idea they

have• Has some money to

invest• May have been made

redundant• May not enjoy paid job

• Organised• Willing to take a risk• Initiative• Perseverance• Determination• Creative and

innovative• Commitment• Stamina• Good judgement• Leadership skills

Read Page 36 about Dean Fellows

1. In each of the enterprises, was Dean producing a good or a service?

Window cleaning; cleaning houses; property development; fish and chip shop; manufacturing chip fryers

2. Which of Dean’s enterprises has been the most successful? Why?

3. Which of Dean’s enterprises was the most risky? Why?

Are you the right type of person to run your own

business?

Complete the Enterprise Quiz

Case Study: Charlotte Yelland, Page 39

Read the case study, then answer the following questions in your exercise book:

1. Two examples of services in the case study are ……

2. Two examples of goods in the case study are ……

3. Charlotte is showing enterprise. She is showing that she is willing to take a risk because … She is also showing initiative because ……… She is also showing a willingness to undertake new ventures because ……

Test your knowledge …

Which THREE of the following are enterprise skills?

A A willingness to take a riskBA willingness to spend moneyCShowing initiativeDA willingness to finish new venturesE Showing you can follow instructionsF A willingness to undertake new

venturesANSWERS: A, C, F

Controlled Assignment

Answer a question where you have to make a judgement.

Requires you to undertake research.Requires you to write up what you find

out and make a decision.Eg In your opinion, is Tesco a

successful company?Homework: for Thurs, 14 October

2010

Thinking Creatively:

Look at what you know and think

about how you can change it

How the BBC thought creatively

• They took a game show they knew was successful• They wrote down the features of the game• They changed the features• They created a new game

show

Features of “Who Wants

To Be A Millionaire”1) Contestant and host sit 2) One contestant plays at a time 3) There is not always a winner4) Prize fund is always the same 5) Contestant can take their time 6) Host is friendly to the contestant

1) Contestant and host stand 2) Nine contestants play at the same time 3) There is always one winner 4) Prize fund varies from program to program 5) Contestant is pushed for time 6) Host is not friendly to the contestants

The Weakest Link

Deliberate Creativity

Blue Skies ThinkingStart with an idea or object and then write down anything that comes to mind. Having exhausted the ideas, assess which would best solve the problem.

Lateral ThinkingTrying to come up with new, innovative ideas

by “thinking outside the box”.

Six Thinking HatsA technique which explores one idea and looks at it from different viewpoints. At the end of the activity a decision is made.

Blue Skies Thinking

• Take an idea, an object or a question• Write down anything that comes to your

mind as you look at the idea, object or question

• Do not analyse your ideas, just write them down

• When ideas have been exhausted, assess:- which ideas are important- which ideas best solve the problem- which ideas could provide the answer to the problem

Example of Blue Skies Thinking

Megan and Tyler wanted to start up their own business. They were looking around for a business idea. They put a plastic bag on the kitchen table and started blue skies thinking …

Plastic Black Dustbin CheapRefuse Tip Lorry On a rollTipped Strong Dirty SupermarketRun out Cupboard Thin Xmas presents

From this list, they decided to produce a range of bin liners for all the different types of dustbins and recycling bins that households now have.

In pairs, complete the Blue Skies

Thinking Activity

Choose an object and be creative

Objects to choose from

• Push chair• Pen• Book• Can of drink• Waste paper

basket

• Saucepan• Calculator• Greetings card• An earring• Mouse mat

Blue Skies Thinking

Object: …………………………….

Words that came to mind:

Circle the words that you think are important

Lateral Thinking …

A man lives on the twelfth floor of an apartment building. Every morning he takes the elevator down to the lobby and leaves the building. In the evening, he gets into the elevator, and, if there is someone else in the elevator -- or if it was raining that day -- he goes back to his floor directly. Otherwise, he goes to the tenth floor and walks up two flights of stairs to his apartment. WHY?

The man is a dwarf. He can't reach the upper elevator buttons, but he can ask people to push them for him. He can also push them with his umbrella.

Lateral Thinking ...

A man and his wife raced through the streets. They stopped, and the husband got out of the car. When he came back, his wife was dead, and there was a stranger in the car. WHY?

The wife was about to have a baby. They drove to the hospital. The husband left to get a wheelchair, but the baby was born in the meantime, and the wife didn't survive the birth.

Lateral Thinking

• Look at the words you have written down• Try to come up with a new and

innovative idea• Try to think of something that is not

available at the moment – this will give your business a competitive advantage

• Think about who will buy your idea

Examples of Products with USPs (Unique Selling Points)

Innocent Smoothies for kids:100% pure fruit, no added sugar.Preservatives or sweetners

Mars was the first company tobring out a chocolate bar as anice cream

Lateral Thinking

Our idea:

Image: a drawing of your design idea with labels where appropriate

Details/Specification: a description of your idea and the main unique features (the USP – the Unique

Selling Point)

Case Study: Lily Ashbourne, Page 43

Read the case study, then answer the following questions in your exercise book:

1. Two examples of blue skies thinking are when Lily thought ……

2. One example of lateral thinking is when Lily ……

3. Lily could sell cards herself or sell them through shops. Which do you think would be the best for Lily? Justify your answer.

4. Complete the puzzle.

Test your knowledge …Jacob attends a course on setting up a

business. On the course, he participates in a blue skies thinking session. Which ONE of the following is most likely to be correct?

Blue skies thinking:A will put him at a competitive

disadvantage when he starts his own business

B is an example of creative thinkingC is the opposite of lateral thinkingD discourages people from thinking of new

ideas

ANSWER: B

Test your knowledge …

Alison Tarrach is setting up a sandwich making business. Which ONE of the following is most likely to give her business a competitive advantage?

A High quality locally sourced ingredientsB High borrowing costsC Shorter opening hours than competitorsD Expensive rent on her premises

ANSWER: A

Test your knowledge …Courtney Farnham is investigating setting up a business

as a dance teacher and is thinking particularly of how she could attract pupils to take up her dance classes. Which ONE of the following is most likely for her to be an example of lateral thinking about attracting customers?

A She will have to give up her present job with a salary of £20,000 per year

B It would be a good idea for her to take out insurance in case of accidents to her pupils

C She should get advice from experts on how to set up a business

D She could give singing lessons for pupils that wanted to perform musicals

ANSWER: D

Test your knowledge …Which TWO of the following are the best

examples of deliberate creativity?

A Day dreamingB Lateral thinkingC Red skies thinkingD Imagining yourself as an

entrepreneurE Blue Skies thinking

ANSWER: B, E

Six Thinking Hats

• The technique helps organise your business ideas

• You put on one hat at a time to think about the problem

• There are six coloured hats

• The technique is designed to help you solve a problem

The Six Thinking Hats:

Edward de Bono

Take your business idea and complete the De Bono Six Thinking Hats exercise.

Six Thinking Hats

1

2

3

5

4

6

Case Study: Megan & Tyler

Page 40

• Megan and Tyler wanted to start up their own business. They were looking around for a business idea.

• They decided to produce a range of bin liners for all the different types of dustbins and recycling bins that households now have.

White Hat

Think about the facts – how many people might use your idea? What information do we have? What information do we need? How can we get the information?

Megan and Tyler thought:• 25 million households in the UK• On average, two bins are collected at least

once every two weeks• If every household used bin liners, there

would be a minimum of 1.25 billion bin liners used every year

Red Hat

Thinking about emotions and gut feelings. Does your intuition say it will work?

Megan and Tyler thought:• Tyler was excited and thought the

idea was a good one• Megan was worried about the money

they would need to get started

Black Hat

Think about the problems and difficulties of the idea – it is about being pessimistic. It prevents mistakes. Consider what can’t be done. Look at the disadvantages.

Megan and Tyler thought:• Megan and Tyler thought they could use

thousands of pounds if their idea failed• Megan thought supermarkets might not

buy from a small business

Yellow Hat

Thinking about the positive aspects of the idea.

What can go right and what are the potential benefits?

Megan and Tyler thought:• Megan thought it would be good to be

able to work independently• Tyler looked forward to the profit they

would make

Green Hat

Thinking creatively – assessing what might go wrong and how the problem can be overcome. Consider the problem and put forward a new idea to solve the problem.

Megan and Tyler thought:• Megan and Tyler considered the problem

about supermarkets not buying their product. If they didn’t buy the bin liners, then Megan and Tyler could sell to small local shops or over the internet.

• To persuade customers to buy, they could stress the problems of hygiene and germs.

Blue Hat

This is thinking about all the aspects you have thought about and then making your decision. Consider the problem and offer a conclusion.

Megan and Tyler thought:• Megan and Tyler looked at the ideas they had

come up with• They were worried about supermarkets not

buying and that customers may not like their idea

• Overall they thought the idea was too risky and rejected the business idea

Overall, we think ……………

Consider your business idea and make a judgement about whether or not it is going to be feasible. Justify your answer.

Questions Entrepreneurs Ask

Why? What? How? Where? When? Why not?

What if …?

Questions Entrepreneurs Ask

Use a whole page to write down questions that you would ask yourself before you set up a new business.

Why? What? How? Where? When? Why not?

Questions Entrepreneurs Ask

What questions would you ask about the premises you intend to buy?

What questions would you ask yourself about the products you are selling?

Wenlock andMandeville

What questions would you ask about your customers?

Some questions we need to answer before starting a

business• Why do I want to set up a business?• Why do I NOT want to set up a business?• What will I sell?• What price shall I charge?• What resources do I need?• Where will I sell it?• Where do I get the money from?• Where will I buy my supplies and raw materials?• When will I start?• How do I provide my product/service?• How much should I produce?• How do I know people will buy it?• How do I stop others copying my idea?

…………………

What if? Questions Entrepreneurs Ask

Use a whole page to write down “what if?” questions that you would ask yourself before you set up a new business.

What if …?

What if? Questions Entrepreneurs Ask

Customers

Money and profit

Legal problems

Me?

What if …? Questions• What if my customers do not like my

idea?• What if I don’t make a profit?• What if I don’t make enough money to

pay myself wages?• What if I run into legal problems?• What if I fall ill?• What if the economy slows down?• What if my prices are too high?• What if I produce too little or too much? …

Case study: Rachel OwenRachel Owen has worked as a sales manager for

the past 10 years for a car hire company. Her salary is reasonable, but Rachel finds the work boring. For the past 12 months, she has been thinking of quitting her job to set up her own business making and selling traditional sweets, biscuits and cakes.

1. Write down at least 5 questions she should ask herself as she explores and researches this change in her working life.

2. Explain three reasons why her idea is risky.3. Explain another way she could approach the

idea.

How risky is Rachel’s idea?

• Does she know definitely that she will get customers?

• Has she worked in this type of work before – does she know the industry?

• Has she had any experience of running her own business before?

• Does she know how much competition there is?

• Does she know about the legal constraints (Food hygiene, etc)?

Case Study: Rachel Owen

Rachel decided that her new business venture was high risk. She decided to stay in her current job but start her business in her spare time.

In the evenings and at weekends she would make her sweets and cakes, and then sell them at local fairs and street markets. This way, she could minimise the risk of failure and build up her expertise. After 12 months, she would be in a better position to know whether or not she could do this full time and make a successful business venture.

Test Your Knowledge …Callum Fisher has decided to set up a shop selling

teenage fashion clothes. He is worried about whether the business will be financially successful. Which ONE of the following questions is the most important to ask himself if he wants to research this more fully?

A What if I spend my money on going on holiday to Turkey rather than to Spain?

B What if the bank charges a very high rate of interest on the money I will borrow?

C What if I have to get up ½ an hour earlier to get to work on time?

D What if I get 10 applications for the job of sales assistant in the shop?

ANSWER: B

Test Your Knowledge …Charlotte Reely is thinking of setting up a

restaurant. She wants her restaurant to offer customers something different from other restaurants in her local area. Which ONE of the following questions is she likely to ask herself when researching this difference?

A Why not get a bank loan?B Why not do the laundry on the premises rather

than sending it to a professional cleaner?C Why not buy an estate car rather than a van

for the business?D Why not offer 100% organic food on the menu?

ANSWER: D

Test Your Knowledge …Ethan Blake is developing a new product for the

market. It is a software program that will allow a user to instantly compare different results from different search engines on the internet. Which ONE of the following questions should he ask himself if he wants to find out whether there will be customers for his product?

A How many programs will I sell if I charge £20 per copy?

B What will be the costs of production?C How much should I spend on advertising?D Where might customers want their orders delivered?

ANSWER: A

Invention and Innovation

How new business ideas come about;

Steps entrepreneurs can take to protect their

ideas.

A USPUnique Selling

PointCadbury’s

Spots versus Stripes

Cadbury’s marketing campaign

for the run-up to the

2012 Olympics

A Famous Inventor – who is he?

He invented this:

and these:

and this:

James Dyson: Dyson’s Cleaners

• Engineering background – always keen on new inventions and he had an idea he believed would make him money – a “bagless” vacuum cleaner

• Didn’t want his new invention copied by others so he patented all the different components of his new vacuum cleaner. He also had over 5,000 prototypes.

• Battled for 5 years to find a UK company that would produce his cleaner. Finally, he decided to do it on his own in Japan and within 22 months, it was the UK’s best-selling cleaner

• Has continued to invent new products that solve problems

• Now has a personal fortune of over £700 million

1. Produce a word processed document that explains how James Dyson overcame the problems of setting up a new business.

2. Having completed your research, explain the characteristics James Dyson has shown as an entrepreneur.

Invention or Innovation?Invention: The discovery of

potential new products and new ways of making products.

Innovation: The process of transforming an invention into a product that customers will buy.

Sort the pictures into two columns:1) Pictures that are inventions2) Pictures that are innovations

InventionThe discovery of potential new

products and new ways of making products. New ideas come about by:

• People who use products (eg James Dyson)

• Employees in research departments (eg Wii invented by specialists at Nintendo)

Dyson’s Research Laboratory in Wiltshire

Engineers andscientists arepaid to createand designnew products

Inventions

InnovationThe process of transforming an invention into a

product that customers will buy. It is the commercial exploitation of an invention.

• An idea could be sold to a manufacturer (eg James Dyson tried to sell his idea to cleaner manufacturers)

• An entrepreneur could set up their own business and sell their idea (eg Dyson)

Which is the easier option? Which is the most profitable?

Innovations

Protecting IdeasPatents

The right of ownership of an invention or process when it is registered with the government. Anyone copying a patented idea can be taken to court and sued for damages. In the UK, patents last for 20 years.

The “Butter Stick” was not patented when it was first

invented:

Protecting Ideas

CopyrightThe legal ownership of material such as

books, music and films which prevents these being copied by others. If others copy the materials they can be taken to court and sued. Authors are protected for their lifetime and 50 years or more after they are dead. Authors can also claim royalties when their material is used/sold.

Robbie Williams gave permission for 30 seconds of his “Millennium” music to be played in a James Bond film, “You Only Live Twice”.

The royalties he received allowed him to buy an island.

Protecting IdeasTrademarksThe symbol, sign or other features of a

product or business that is protected by law. For example, Coca-Cola is registered as a trademark – anyone who tries to sell any product under the Coca-Cola name can be sued.

A business selling drinks set themselves up as:

Coke Cola Ltd

Coca Cola successfully won a court case which forced the company to change its name as it was taking advantage of the goodwill in the brand owner's brand or trademark.

Flyte Ltd:Page 51

Read the case study and answer all the questions.

Test Your Knowledge

Jeff Briggs, an entrepreneur, spends £10,000 designing a cake recipe and selling it to customers through a manufacturer. This is an example of:

a) Innovationb) A patentc) Inventiond) Branding

Answer: A

Test Your Knowledge

A small business has developed a new type of product. It can legally protects its discovery by:

a) More new inventionsb) Innovationc) Developing a brandd) Taking out a patent

Answer: D

Three musicians have got together to form a group. They compose some original songs. Their songs can be legally protected through:

a) Patentsb) Copyrightc) Innovationd) Invention

Answer: B

Test Your Knowledge

Test Your Knowledge …Callum Fisher has decided to set up a shop selling

teenage fashion clothes. He is worried about whether the business will be financially successful. Which ONE of the following questions is the most important to ask himself if he wants to research this more fully?

A What if I spend my money on going on holiday to Turkey rather than to Spain?

B What if the bank charges a very high rate of interest on the money I will borrow?

C What if I have to get up ½ an hour earlier to get to work on time?

D What if I get 10 applications for the job of sales assistant in the shop?

ANSWER: B

Test Your Knowledge …Charlotte Reely is thinking of setting up a

restaurant. She wants her restaurant to offer customers something different from other restaurants in her local area. Which ONE of the following questions is she likely to ask herself when researching this difference?

A Why not get a bank loan?B Why not do the laundry on the premises rather

than sending it to a professional cleaner?C Why not buy an estate car rather than a van

for the business?D Why not offer 100% organic food on the menu?

ANSWER: D

Test Your Knowledge …Ethan Blake is developing a new product for the

market. It is a software program that will allow a user to instantly compare different results from different search engines on the internet. Which ONE of the following questions should he ask himself if he wants to find out whether there will be customers for his product?

A How many programs will I sell if I charge £20 per copy?

B What will be the costs of production?C How much should I spend on advertising?D Where might customers want their orders delivered?

ANSWER: A

Test your knowledge …Jacob attends a course on setting up a

business. On the course, he participates in a blue skies thinking session. Which ONE of the following is most likely to be correct?

Blue skies thinking:A will put him at a competitive

disadvantage when he starts his own business

B is an example of creative thinkingC is the opposite of lateral thinkingD discourages people from thinking of new

ideas

ANSWER: B

Test your knowledge …

Alison Tarrach is setting up a sandwich making business. Which ONE of the following is most likely to give her business a competitive advantage?

A High quality locally sourced ingredientsB High borrowing costsC Shorter opening hours than competitorsD Expensive rent on her premises

ANSWER: A

Test your knowledge …Courtney Farnham is investigating setting up a business

as a dance teacher and is thinking particularly of how she could attract pupils to take up her dance classes. Which ONE of the following is most likely for her to be an example of lateral thinking about attracting customers?

A She will have to give up her present job with a salary of £20,000 per year

B It would be a good idea for her to take out insurance in case of accidents to her pupils

C She should get advice from experts on how to set up a business

D She could give singing lessons for pupils that wanted to perform musicals

ANSWER: D

Test your knowledge …Which TWO of the following are the best

examples of deliberate creativity?

A Day dreamingB Lateral thinkingC Red skies thinkingD Imagining yourself as an

entrepreneurE Blue Skies thinking

ANSWER: B, E

Test your knowledge …

Businesses can protect their business name and/or logo by law. The business would register their:

A Company nameB TrademarkC PatentD Trade name

Answer: B

Test your knowledge …

The business term that best describes a situation where an entrepreneur designs a product and successfully sells it, is called:

A InventionB Product developmentC InnovationD Integrity

Answer: C

Examination Question:Example

A manufacturer of sports equipment has invented a machine that can help people exercise whilst sitting at their desks at work.

1. Using the example above, explain the difference between invention and innovation.

3 Marks

Examination QuestionResponse 1Invention is discovering a new idea for a product

whereas innovation is organising the selling of the product to a customer.

Response 2Invention is coming up with a new idea for a

product.Response 3The sports manufacturer discovered a new product

idea for an exercise machine - this is invention. If they successfully produce and sell the exercise machine to customers, this is innovation.

2 Marks

1 Mark

3 Marks

Exam Question

Claire has invented a device that monitors how many calories you eat in one day. She is wanting to organise the production of the device so that she can make money from her idea.

• Using the example above, explain the difference between invention and innovation.

3 Marks

Today

•To understand the term “calculated risk”

•To understand the risks and rewards of setting up a business

Calculated RiskCalculated risk is about putting a value

or probability on a risk.

For example, what is the risk of getting injured when sky diving?

Is this a high, medium or low risk activity?Is there a 50:50 chance of being injured or is

it 70:30?Entrepreneurs assess the risk of their idea

and then make a decision, or decide how they might reduce the risk.

Complete the “Calculated Risk” activity, assessing the risk of each activity.

Upsides and DownsidesWhen assessing how risky a venture is,

entrepreneurs must consider:• The RISKS or DOWNSIDES (the

disadvantages or what might go wrong)• The REWARDS or UPSIDES (the

advantages or what could go right)eg: What are the risks and rewards of

going to Huddersfield this Saturday evening?

Read the “Risks and Rewards” statements and put them in the correct column

Setting up my own business

Having assessed the upsides and downsides (the risks and rewards), would you like to set up your own business?

Give your decision and explain the reasons for and against the idea.

Nicky Mullinder

Page 55

Read the case study and answer the questions.

Nicky Mullinder Page 55• Making profit• Can buy a car and a house• No market research• No funds to start up the business• Huge risk – no guarantee she would make money• Business may make a loss• The new can opener may never become popularAction:• Market research to establish whether there is a demand

for the can opener• Work out how much start-up capital she needs• Research into sources of finance• Find premises• Find some possible suppliers of the raw materials• Decide how many staff she will need• Decide how to advertise and promote her new idea

Measuring Success

Firms can measure how successful they are by using the following information:

• Profit figures• Sales figures• Number of customers• Number of employees• Number of stores• Share price• Market share

Enterprise SkillsRead the statements provided and decide

which skills are most important. Place them in a shape of a “Diamond 9”. Copy the statements and the shape into your books.

Key Enterprise Skills• Being able to see opportunities• Good planning• Drive and determination• Being able to think ahead

have got what it takes to run a business?www.business.link.gov.uk

Have I got what it takes to run my own business?

While completing the quiz, on lined paper, write down the skills they ask about in the questions.

On a Word document:

1.Skills required to run my own business:2.Quiz Result:Copy & paste/screenshot the result into your document and print.

Mind MapsA mind map is a diagram that records words

and ideas. Entrepreneurs use them to help assess the strengths and weaknesses of an idea.

My Strengths and Weaknesses as an Entrepreneur

Using the starter activity and your notes on lined paper, produce a mind map that shows your strengths and weaknesses as an entrepreneur.

Homework

• Read “Exam Zone Topic 1.2” worksheet – page 60 and 61 in the text book.

• Learn all the work completed so far for Mrs Wright

TEST NEXT WEEK