Task On Entry 10 minutes

Find 2 examples of how multi billion dollar Lots of successful

companies that you admire were founded
and post your examples in the week 4 businesses these
channel
days start out as very
small and basic and
grow into huge multi-
billion dollar
companies.
 Lesson 4: STARTING YOUR OWN BUSINESS
Lots of successful businesses these days
start out as very small and basic and grow
What could be your
into huge multi-billion dollar companies. business idea?
We are going to use what we have learned Perhaps you have a
and will learn in the coming weeks in our
Business Studies lessons to help create a new invention or
business plan for a new business idea
perhaps your passion
The first step is to come up with a new
idea. Remember that as you begin to plan is cooking and you
more parts of your company, some parts
may change. would like to open a
TAKE 15 MINS TO DISCUSS YOUR IDEA WITH
restaurant
YOUR GROUP FROM LAST WEEK
 Collaboration
Work with you groups in the relevant channel in General. Discuss your ideas
for a business and give constructive, positive feedback. Everyone in the group
to contribute. I will be checking in on the group channels to see how you are
getting on:

• Group 1: Amna, Haya, Omar, Ahmed, Samy, Syed

• Group 2: Lina, Sanah, Muhamad, Hasan, Xiaolu
• Group 3: Kenzy, Saleh, Usman, Krishna, Eisa
• Group 4: Kasra, Aseel, Imad, Syed R, Zayan
• Group 5: Alexandra, Pierre, Yahya, Saanvi, Zi Hao
 Learning Objectives of Lessons 4-7
All to be able to explain their business idea.
Most to be able to list steps of starting up a
business and the know the elements of a
business plan
Some may even be able to start a business
Do share your success with me and your peers
periodically throughout the year.
SO YOU HAVE AN IDEA – WHAT ARE THE NEXT STEPS?
 Task On Entry: 10 minutes
What do you think is going to be the most important
factor in the success of your business?
 THE BUSINESS IDEA

HOW WILL YOUR BUSINESS ADD VALUE?

WHAT PROBLEM OR WANT DOES YOUR IDEA

SOLVE?

WHAT IS YOUR USP?

TAKE 15 MINS TO THINK FURTHER ON YOUR BUSINESS IDEA

– YOU CAN EITHER DISCUSS WITH YOUR GROUP OR WITH
ME IF YOU ARE WORKING ON YOUR OWN
 MARKET RESEARCH
This is the management
WHAT ARE THE BENEFITS OF process of collecting and
MARKET RESEARCH? analysing data and
information about the
WHAT RESEARCH CAN YOU DO? changing needs of
customers. It consists of
collecting primary and/or
WHAT WILL YOU DO WITH THE
RESULTS? secondary data, in order to
predict the future level of
demand for a particular
product.
 TYPES OF ORGANISATION

SOLE TRADER OR PARTNERSHIP? The business also needs to decide

on the legal structure (
types of organizations ), e.g.
PRIVATE LTD, PUBLIC PLC?
whether the business will be
formed as a sole trader,
WHAT ARE THE ADVANTAGES?
partnership, charity, cooperative,
non-government organization or
WHAT ARE THE DRAWBACKS?
limited liability company. The
owner(s) also need to decide on a
WHY IS THIS SUITABLE?
legal, registered name for the
business.
 LEGAL REQUIREMENTS

Before a business can formally trade, it must be legally

registered with the authorities. Once it has been granted
formal certification, permits and licenses to trade, the business
can then start to sell its goods and services.
 FINANCE

The business plan and big

HOW MUCH MONEY DO YOU NEED TO START
UP? idea(s) cannot materialise
unless there is sufficient
WHAT FINANCE OPTIONS DO YOU HAVE? finance. This may come
from internal and / or
WHICH OPTION WILL YOU external sources of finance
PICK? , such as personal savings,
WHY? bank loans and
government subsidies.
 LOCATION OF BUSINESS

WILL THE COMPANY NEED TO RENT A The owner(s) also need to

SPACE? determine the geographical
location for the business.
WHY?
The location decision is
WHERE WILL THE BUSINESS BE dependent on both
LOCATED? quantitative and qualitative
factors, such as the cost of
WHY? land and access to suppliers.
 BUSINESS PLAN
– This refers to a written document with information about how a firm intends to achieve:

• Organizations goals.
• Mission and/or vision,
• Market size – competitive analysis, SWOT
• Marketing strategy
• Sales strategy
• Operations management,
• Financial analyses,
• Human Resources - Staffing (personnel) needs of the organization

The business plan is important for businesses trying to get approval for external sources of
finance (from commercial banks and investors).

WE WILL LOOK AT THE BUSINESS PLAN IN MORE DETAIL IN LESSON 5

 Let’s look at steps to starting a business – 3 min video

• Review the slides to ensure you know the different elements

of setting up a business
• Do these steps apply to the business that you want to set up?
• List the steps that you will need to consider for your business
– you may not need them all
15 minutes
Additional reading and watching if you would like

https://www.businessnewsdaily.com/4686-how-to-start-a-business.html

https://www.youtube.com/watch?v=2oYPk_0iEvU
 Understanding reasons for failure is key to business success

Make a leaflet or poster that highlights the

following points:
• List as many reasons as you can think of or
research why businesses fail.
• Explain them
• Give examples of businesses that have failed.
• Why do you think they failed?

30 minutes
 Does your list match mine? Whole Class Q/A
• Lack of finance – Many new businesses lack the necessary finance to have sufficient liquidity
to run the business on a daily basis (such as paying wages and utility bills). Financial
problems are a major problem for many start-up businesses. In some cases, the lack of
sufficient working capital can lead to bankruptcies.
• Lack of market research – The key to a successful business is having a commercially viable
idea. However, what entrepreneurs think may be a good idea may not materialise due to the
lack of effective market research. For example, new businesses often overestimate the size
of their potential market.
• Poor marketing strategy – Another related problem is that new businesses have limited
marketing budgets available for promoting and advertising their products. No matter how
good an idea might be or how competitively priced it is, customers will not buy it if they are
not informed that it exists. For many products, the problem is a lack of differentiation or not
having a unique selling point, so they fail to gain any recognition in the market.
 Does your list match mine? Whole Class Q/A

Limited human resources – Newly established businesses often find it difficult to attract suitable
skilled and experienced staff. Without a well-established business model or corporate image, new
firms can struggle to recruit the necessary human resources for its operations.
Long hours – Similarly, a common problem for many new businesses is that the owner(s) often
think they can do everything themselves, partly to help keep costs low. However, this if not likely
to lead to long-term success for the business. For example, the entrepreneur may spend many
hours after the close of business to work on the firm’s financial accounts. It is common for self-
employed people to work significantly longer hours than if they were employed by someone else.
Lack of knowledge, skills and experience – Too often, new entrepreneurs do not have sufficient
knowledge, skills or experience in the industry they are entering. For example, they may lack
knowledge of their target market, competitors and market trends. They may also lack knowledge
of the best suppliers, which can cause higher costs and distribution problems. Finally,
inexperienced entrepreneurs may lack the experience to make effective strategic decisions.
Ultimately, all of this results in the business making huge losses.