Profitability and liquidity

SELF-EVALUATION CHECKLIST

After studying this chapter, complete this table.

I know and understand: Needs more work Almost there Ready to move on

the nature of business (AO1) I am able to apply and analyse: primary, secondary, tertiary and quaternary sectors (AO2) entrepreneurship – opportunities for starting a business (AO2) entrepreneurship – challenges of starting a business (AO2) I am able to select and apply the business management tool: business plans (AO4) REFLECTION 1 Assume you plan to start a new business enterprise. How would you decide which products or services to sell? 2 If you were planning to set up the business with another person, why would collaboration be important? 3 Entrepreneurs need to balance the risk involved with a new business against the potential profit. After reading this chapter, how would you attempt to do this for your new business enterprise? PROJECT Split into groups of four students. 1 Each group will form the management team of a start-up business. Each group member must take one of the following roles: HR director, marketing director, operations director and finance director. Each team will need to vote (or randomly select) one of its members to be the managing director. 2 Each team should decide on the type of business activity to set up and will need to prepare a brief business plan, similar to

Table 1.2. In the finance section, you need to include a breakdown of your capital investment and justify why you need a loan for $50000 from the bank.

3 Each team will prepare a class presentation on their business idea and key elements of their business plan. 4 Your teacher will act as the bank manager responsible for assessing your request for a loan to help you with your start-up plans. They will try to challenge your idea, and they can only give a loan of $50 000 to one of the teams! Prepare to receive questions on the problems you are expecting to face as a start-up business. Also, be prepared to answer any questions from the managers of the other businesses competing for the loan. SAMPLE 17