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A particular trader sells bananas on the pavement. He calculates his expenses carefully and ensures that the following costs are covered:
All these costs are added together to calculate the price of a banana accordingly. Then he adds a reasonable profit for himself and sells his bananas.
When you hope to run a profitable business over a period of time, it is very important to take care of particular aspects.
1. Competition
All sellers try to make money to take care of themselves and their families.
It therefore becomes important for any seller to compete with other sellers to persuade the consumer to buy from him/her rather than from the competitor. The seller has to search for new and better methods of producing the product offered to be able to sell it at a lower price / at a better profit. Any seller is sure to make many mistakes, and many businesses do fail.
2. The consumer
The businessman continually has to ask himself:
“Who will buy my products?”
This refers to his MARKET. He has to make a decision about the market he is going to aim at in advance.
Remember:
| Babies | Boys2 – 6 | Girls2 – 6 | Boys7 – 12 | Girls7 – 12 | Teenage boys | Teenage girls | Men | Women | |
| Soft toys | |||||||||
| Dolls | |||||||||
| Puzzles | |||||||||
| Remote-controlled toys | |||||||||
| Model cars&aeroplanes | |||||||||
| Balls | |||||||||
| Computer games | |||||||||
| Bicycles | |||||||||
| Tricycles | |||||||||
If you now determine who the particular clients from your surroundings are that would buy from you, you will have an idea of what kind of stock to offer.
3. Entrepreneurship
The word is derived from the French word “entreprendre”. “Entre” means “to enter in(to)”, while “prendre” means “to take”. From this we can deduce that an entrepreneur is someone who undertakes a particular task.
An entrepreneur is someone who has the ability to see a business opportunity, has
the courage to make use of it and the skill to manage it in a profitable manner.
Can you add to this list?
Discuss this question in your groups and jot down some possible reasons:
Complete the following form as honestly as possible:
| Characteristics | YES | NO |
| I have ideas for making money. | ||
| I have already made money with my ideas. | ||
| I should like to have my own business. | ||
| I often make plans of my own. | ||
| I am courageous. |
If you have mainly said YES, you could definitely consider becoming an entrepreneur.
REMEMBER THIS!
“A business is an opportunity to serve the consumer by satisfying some of his needs.”
“A successful business is an opportunity to serve the needs of the consumer and make money at the same time.”
* * * * * * * *
SHELDON’S LAW
When you start a business, things take three times as long as you expect.
| LO 3 |
| MANAGERIAL, CONSUMER AND FINANCIAL KNOWLEDGE AND SKILLSThe learner will be able to demonstrate knowledge and the ability to apply responsibly a range of managerial, consumer and financial skills. |
| We know this when the learner: |
| 3.1 explains the role of planning, organising, leading and controlling (e.g. financial and procedural controls) in a business. |
| LO 4 |
| ENTREPRENEURIAL KNOWLEDGE AND SKILLSThe learner will be able to demonstrate entrepreneurial knowledge, skills and attitudes. |
| We know this when the learner: |
| 4.1 compares essential characteristics and skills needed to be entrepreneurial from two different simple case studies of practising entrepreneurs in own community; |
| 4.2 uses idea generation techniques to make recommendations on using community resources to generate income in a responsible way. |
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