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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
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