Unit 1.

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What is a
business?
IB Guide Connections

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 2
Minutes Activity
1. In pairs, think of as many synonyms for the word
BUSINESS as possible.

2. Each pair says one of their words until a team does

not have another synonym

3. The team that has the most words wins

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Discussion
 What resources does someone need to start a business?
 What are some things that a business produces? Can you think of
general categories that these things can be placed into?
 Can you think of consumer ´wants´ and consumer ´needs´?
 What businesses are meeting these wants and needs?

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The nature of
business
Meeting the wants and needs of
consumers
 The Role of a Business
Tangible product that
Business can be seen or taken
home – iPhone,
vegetables

Good

Service Wants Needs

• Creates a product Intangible product that

the consumer does not The role of a business is to meet the
• Provides a service
physically take home– needs and wants of individuals or
• Extracts raw materials from the
organisations
earth yoga class, medical
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 Resources needed in production
These are inputs: These are outputs:
Human
Transformation Goods
Physical process

Production
Financial
Businesses must add value to
Enterprise the products and services they Services
produce. What does this mean?

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Resources needed in depth:

Human Financial
All businesses, even highly automated All businesses need finance/capital to
ones needed human input. Some might make a product or service. Whether it is
only need 1, others require many a loan, savings, overdraft, all businesses
individuals with different skill sets need finance to function
Eg – car manufacturing/Restaurant

Physical Enterprise
The right quantity and quality of This is the business idea and the will to
physical materials, machinery and space see all the other areas become a
is required to make a product or service. functioning an thriving business.
Even an online business needs a Enterprise exists in all businesses
computer (machinery)
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Business Sectors
Primary, Secondary, Tertiary, Quaternary
sectors
 Secondary Tertiary

Primary Quaternary

4 Sectors of Business
Activity
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 Involves acquiring raw materials. For

Primary example, metals and coal have to be mined,

oil drilled from the ground, fruits farmed and
animals raised.
Goods This sector manufactures and assembles
products. They transform raw materials into
Secondary finished goods. For example, cookies, cars,
cell phones, etc

This sector provides services to customers,

Tertiary which sometimes includes tangible goods.

Examples include banks, education,
transportation, insurance, etc
Services This sector provides services that are
focused on knowledge. This includes IT,
Quaternary research and development, consultancy, the
media, etc
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 Real-life
Business Baidu is a Chinese based company which started out as a search
engine platform that was created in 2000. Within a few years, it

Spotlight
was an early adopter of artificial intelligence to help search
engines work easier. They operate in the quaternary sector. This
business is located in the Haidian district of Beijing, which is
known as the Silicon Valley of China.

Their portfolio of products and services is accessed by over

one billion devices monthly. Their flagship product, Baidu
App, which is the No. 1 search-plus-feed app in China,
reached 544 million MAUs in December 2020.

In recent years, Baidu has diversified and now offers

products such as online encyclopedias, maps, cloud
storage services, driverless car technology and more.

Taken from https://ir.baidu.com/company-overview

 4
Minutes Activity McDonalds
Car Manufacturer
Which sector is it? Dress Maker
Builder
Starbucks
FedEx

Taxi Company
Primary Secondary Tertiary Quaternary Oil Drilling
Baker
Hunting
Medical Scientist
Magazine Company
Coal Mining
Fishing
Apple Store
Crop Picking 13
Answers

Could some
business
operate in
more than
one sector?
Can you give
some
examples?
Metal/Glass/Plastic
Moving through
Company makes an
(Raw Materials)
the sectors informative car
magazine
Car is then sold in
and makes profit
a car dealership

Made into a product

(car)

Primary Secondary Tertiary Quaternary

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Work at home
Using the information on the previous slide, use ONE the of the
objects below and follow it through the four business sectors.

 Apple
 Leather jacket
 Tablet
 School book

Present your object like was shown on the previous slide.

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 Secondary Tertiary

Primary Quaternary

4 Sectors of Business
Activity
One partner talks about the primary and secondary sector for 1 minute.
Then you will change and the other partner will talk for 1 minute
about the remaining sectors. 17
Entrepreneurship
Characteristics and qualities of an
entrepreneur
Discussion
 What is an entrepreneur?
 Name three criteria that makes someone an entrepreneur.
 Name two criteria that disqualifies someone as an entrepreneur

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Would you consider these
people entrepreneurs?

Kim Kardashian PewDiePie Ana Botin 20

Key
Word An Entrepreneur is …
An individual who develops and runs a business, assuming
all the risks and rewards of that given business.

• Able to see opportunities where others are not.

• Someone who has the skills and initiative necessary to
take good new ideas to market
• Can make the right decisions that lead to profitability.

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 5
Minutes Activity
You each have a handout titled “Characteristics
of an Entrepreneur”.

I want you to come up with as many

characteristics that you feel an entrepreneur
should have

Try and fill as much of the body as you can.

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 Characteristics of an
Entrepreneur:
How many of the characteristics that you
have written down are from the learner
profile? Are there any that are in the
learner profile but aren’t good for
entrepreneurs?

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 5 Would you make a good
Minutes entrepreneur?
• Thinking about the qualities we just discussed, could
you be an entrepreneur? Why or why not?
• Do you want to be an entrepreneur in the future?
What makes you have these desires?
• Take the quiz below and tell me if you agree with the
results

Entrepreneur Quiz

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 Entrepreneur Hall Of Fame
• You are going to create a list of FOUR entrepreneurs that you
think should be included in a Entrepreneur Hall of Fame.
• You will create a presentation on each person with their photo and
information about what they have done AND why YOU think they
should be included in the hall of fame.
• You must talk about 2 minutes for each person.
• Remember to cite your work properly.
• You must include the follow:
 One woman
 One business leader from a non-Western company

**This work will be done at home and presentations will be done in class. 25
Instructions for the Entrepreneur Hall of fame
presentation

These presentations will be

done in a “speed dating” style.
There will be two groups.
Group 1 will sit in a desk and
will not move throughout the
activity. Group 2 will move
each time the bell rings after
they have given their
presentation and heard one
from their partner. Each
person will present ONE
person from their list each
time.
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Starting a Business
Challenges and opportunities of starting
a business
Discussion
 Why do people start businesses?
 Can this purpose change over time?
 Do you know why the people below started their businesses?

Travis Kalanick Oprah Winfrey Steve Jobs

Getting to keep all the profit.
Also the possibility of risk Necessity Sharing an
however idea

The need for a salary may If you really believe in

Rewards lead to some starting a new something you may want to
business share it with others

Not wanting to be confined by Opportunities to start

bosses, rules and regulations Finding a
a business
Gap

Some people stumble upon a

Independence business idea by chance

Some people have a passion

Challenge for something that they want Interest
Some people just want to see if to make their work
they can “make it” themselves 29
Creativity:
The process of
Key Concepts
creating new ideas and
considering existing
ideas from a new
perspective.
Entrepreneurs need to be creative not only to
create their product or service, but also when
they encounter problems when running their
business.

Can you think on TWO examples of

businesses that have used creative thinking to
create their product or service or when there
was an issue?
 Challenges of starting a
business

2 What are some challenges that new businesses face? List at

least 5 in the time given.
Minutes

• Lack of experience
• Difficulty raising finance
• Inability to raise brand awareness
• Poor location chosen
• Lack of customer interest
• Difficulty in registering the
business/following the law
• Difficulty finding suppliers
• And many others…
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oolkit

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Business Plans
Decide whether these statements about business
plans are TRUE or FALSE.

Business plans help businesses Entrepreneurs were 3 times more

70% of high growth businesses
grow up to 20% more than ones likely to persist with starting a
have a business plan
that do not have one. business if they had a plan

Over 65% of venture capitalists

Businesses that have business
won’t invest in a start-up without
plans are less likely to fail.
a business plan
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Business Plans
Decide whether these statements about business
plans are TRUE or FALSE.

FALSE: They are actually SIX

FALSE: they actually help
TRUE times more likely to persist with
businesses grow 30% faster
their business

TRUE TRUE

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** References at the end of presentation.
Purpose of a business plan
After looking at the previous facts and using your own ideas, what are the purposes of a
business plan? How can it be helpful to a business? What are the limitations of making one?

It takes a long time to make

Helps focus the and is rarely updated or
entrepreneur used after creation
It is only as good as
Coordinates activities the research and
within the business forecasts that went into
making it
Raising finance via Many external factors
banks, angel investors, can affect the accuracy
and venture capital of the plan
Sets goals for the
business that are easier
to achieve when written
down 35
Elements of a business plan

 Information on the owner(s) and their background and experience

 Overview of the business, its products, and ideas
 Market analysis (competition, position in the market, etc)
 Goals for the short, medium and long term
 Financial information (access to capital, cash-flow forecast,
forecasted profit)
 Human resource needs: employees, skills, etc

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Case study
practice

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Bite Me Bagel Shop
In 2018, Emily lost her job as a teacher at an international school in Spain due to low enrollment at
her school. She looked for a job over the summer, but in the end could not find anything. Emma
needed to bring in income, so she took her passion for baking and started selling bagels to the expat
community in Madrid. She started out small by selling via Instagram only and only had a few
flavors. People who had tried bagels in the past loved her product, but most locals did not know
what a bagel was. In addition, it was hard to grow out of her small apartment into a more visible
shop. With lots of persistence and hard work, Emily was able to rent a shop and start doing
deliveries around Madrid. Now she is one of the top-rated breakfast places in all of the city.

a. Define the term entrepreneur. 2 marks

b. Comment on the opportunity Jane saw to open her business.
2 marks
c. Explain two problems Emily might have encountered when starting up her business.
4 marks
d. Describe the sector of activity Emily is working in. 2 marks 38
 Markscheme
a. a person who sets up a business or businesses, taking on financial risks in the hope of profit. Award 1 mark for the
understanding that an entrepreneur sets up a business and another mark for the idea of seeking some sort of reward
i.e. profit, fame, etc.

b. One opportunity that she saw was a large expat community who knew and loved bagels. Another opportunity was a
market that wasn’t saturated because bagels were new to the local population. Award 1 mark for identification of the
opportunity and another mark for a short explanation of how it was an opportunity for Emily.

c. Emily could have had problems with financing. A teacher’s salary is probably not that high and getting enough
money to invest could have been difficult. Also, it says that it was difficult to find a new location. Another problem
could be getting the local population to try the bagels to sustain the business. Finally she might have had problems
setting up/following the law. Since this is a foreign country, Emily might not be aware of the laws and how to set up a
business. Accept any other relevant answers. Mark as 2+2. Award one mark for identification of a problem and 1
mark for explaining it in context.

d. Emily is working in the tertiary sector. She provides a service of making and serving bagels to the local
community. Students might argue that she was working in the secondary sector when she just produced and delivered
bagels. This is also acceptable. Award 1 mark for identification and 1 for explanation.
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IB Guide Connections

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References:
Business Plan citations:

Jetley, I. (n.d). Business Plan Facts and Statistics to

Drive Your 2020 Business Strategy. Go Business
Plans.
https://www.gobusinessplans.com/business-plan-fac
ts-and-statistics-to-drive-your-2020-business-strate
gy/

Parsons, N. (n.d). Do You Need a Business Plan?

Scientific Research Says Yes. B Plans.
https://articles.bplans.com/do-you-need-a-business-
plan-scientific-research-says-yes/

Textbooks references:
Surridge, M., & Gillespie, A. (2022). Business Management
Lomine, L., Muchena, M., & Pierce, R. A. (2022). for the IB Diploma. Hodder Education.
Oxford IB Diploma Programme: Business
Management Course Book (1st ed.). Oxford 41