Course Title – Business Management
Session Title – Risks and Revenues
Performance Objective:

Upon completion of this lesson, the student will understand the risks involved with a virtual business as well as the potential rewards of such a business.
Approximate Time:
When taught as written, this lesson should take four to five days to complete.
Specific Objectives:

Students will understand the external and internal risks to virtual businesses.

Students will identify the many revenue streams for virtual businesses.
Preparation
TEKS Correlations:
This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result in the elimination of any or all of the TEKS listed.
The student analyzes an overview of starting and growing a virtual business office. The student is expected to :

130.120(b)(1)(B) list benefits afforded to virtual assistants and their clients
The student demonstrates online and off-line marketing, including establishing a web presence. The student is expected to:

130.120(b)(2)(A) create and design a website for a virtual business office

130.120(b)(2)(B) describe details of setting up a virtual business office

130.120(b)(2)(C) determine appropriate marketing and advertising of a virtual business office

130.120(b)(2)(D) describe steps to successfully market a virtual business office
Interdisciplinary Correlations:
English:
110.33(b)(1)(A) – Reading/Vocabulary Development
…determine the meaning of grade-level technical academic English words in multiple content areas (e.g., science, mathematics, social studies, the arts) derived from Latin,
Greek or other linguistic roots and affixes.
110.33(b)(1)(C) – Reading/Vocabulary Development
…infer word meanings through the identification and analysis of analogies and other word relationships.
110.33(b)(12)(B) – Reading/Media Literacy
Copyright © Texas Education Agency, 2012. All rights reserved.
1

…evaluate the interactions of different techniques (e.g., layout, pictures, typeface in print media, images, text, sound in electronic journalism) used in multi-layered media.
110.33(b)(12)(C) – Reading/Media Literacy
…evaluate the objectivity of coverage of the same event in various types of media.
110.33(b)(12)(D) – Reading/Media Literacy
…evaluate changes in formality and tone across various media for different audiences and purposes.
Occupational Correlation (O*Net – http://www.onetonline.org/ )
13-2099.02 - Risk Management Specialists
Similar Job Titles: Global Risk Management Director, Chief Risk Officer, Risk Manager
Tasks:

Document, and ensure communication of, key risks

Recommend ways to control or reduce risk

Gather risk-related data from internal or external resources
Soft Skills:
Problem sensitivity, deductive reasoning, oral comprehension
Accommodations for Learning Differences:
It is important that lessons accommodate the needs of every learner. These lessons may be modified to accommodate your students with learning differences by referring to the files found on the Special Populations page of this website.
Teacher Preparation:
References:
1. Business Principles and Management, Everard Burrow, South-Western Thompson
Learning
2. Learning E-Commerce: Business Analysis and Design, Nancy Stevenson, DDC
Publishing
3. Start Your Own E-Business, Entrepreneur Magazine, Entrepreneur Press
4. Effective Small Business Management, Scarborough, Prentice Hall
5. http://www.ou.edu/oupd/vhoac.htm
Instructional Aids:
1. “Risks and Revenues” Presentation
2. “Risk/Reward Diagram” Assignment #1
3. “Risk/Reward Diagram” Assignment #1 Rubric
4. “Gift Shop Web Site Proposal” Assignment #2
5. “Gift Shop Web Site Proposal” Assignment #2 Rubric
Copyright © Texas Education Agency, 2012. All rights reserved.
2

6. “Web Site Cost Research Document” Assignment #3
7. “Web Site Cost Research Document” Assignment #3 Rubric
Materials Needed:
1. Poster board or flipchart paper
2. Markers
Equipment Needed:
1. Computers for students to complete projects
2. Projector for presentation
Learner Preparation:
1. Ask students if they have ever done anything that involves risk. Did they think consciously about the risk or the rewards associated with that decision?
Occasionally when it is an emotional decision like wanting to try out for a sports team or a school play they may not think about risks and rewards. Discuss what they would be for decisions such as the sports team or school play.
Lesson Plan
Introduction (LSI Quadrant I)
1. Discuss with students the risks of conducting business online. Ask them if they know what “hackers” are and what a malicious hacker can do. Ask students about what the rewards are for having your own business. Write responses on the board or document camera.
Important Terms for this Lesson:

Risk – The potential for a loss.

Banner Ads – An advertisement on the Internet that, when they are clicked, will take you to the company’s or advertiser’s web site.

Relicensing Fees – A company generates information and that information is licensed to appear on a partner’s site and receives fees for that service.

Affiliate Program – A way for one company to generate sales for another company; an advertisement is placed on the sponsor site and when an order is placed it results in a payment to the affiliate.

Virus – Computer programs that are designed to make copies of themselves over and over.

Denial of Service Attack – A computer attack that can shut companies’ web sites down for hours or longer.

Electronic Forensics – Describes the tracking of electronic “footprints” left online by computer criminals.

SSL – Secured sockets layer, a computer software program that is used when your computer tells you that you are entering a secure area.

Firewall – Software that operates between the Internet and a company’s computer network that allows authorized data from the Internet to enter a company’s network and the programs and data it contains but keeps unauthorized data, such as viruses, spyware, and other malware out.

Malware – Short for malicious software, programs designed to harm a computer or network

Click-To-Pay – Online payment system used by many online merchants
Outline
Copyright © Texas Education Agency, 2012. All rights reserved.
3

Outline (LSI Quadrant II)
Instructors can use the presentation program/software, slides, handouts, and the Internet in conjunction with the following outline.
MI Outline Notes to Instructor
I. Risk Analysis – External Threats
A. Viruses and malware
1. worms – replicate themselves and
Use presentation as an aid. spreads to other computers on a network
Risks and rewards go hand in hand.
2. trojans – perform unwanted activities on your computer but does not
Ask students about anything they have replicate itself
3. adware – unwanted ads
4. spyware – tracks your personal done that has been risky, whether it was trying out for a team information and sends to the originator of the program
B. Denial of service attack or applying to a college. The risk is that maybe it won’t
D. Online fraud (credit card)
1. emails recommending that you update information for certain accounts
2. personal information is captured
1. when an email directs you to a link which is actually bogus
2. links to a site that looks just like a legitimate site work out, but what are the rewards?
Rewards can include making a team and using your abilities or getting accepted to a college you wanted and feeling that your future is just beginning.
The same is true for starting a business,
II. Risk Analysis – Internal Threats or more common today, a virtual business. There are external threats that you cannot predict.
Ask students what types of external risks they see possible with an online business.
Write them on the board.
As if external threats
Copyright © Texas Education Agency, 2012. All rights reserved.
4

A. Malicious Intent – dishonest employees
C. Human error – accidentally deleting
information
III. Safeguards
A. Change passwords regularly
B. Back up information often and regularly
C. Perform system maintenance
D. Conduct software updates – automatic update feature
E. Block traffic from suspicious IP addresses
A. Electronic forensics – tracks computer
Criminals
B. Secured Sockets Layer (SSL) – signals you are entering a secure area of a site
C. Require a card code (on the back of a card)
D. Computer security software were not risk enough, there are also internal threats that can be detrimental to a business. There can be system failures or dishonest or incompetent employees. Ask students how they think these threats can be handled.
Discuss the risks of online business. Ask students who monitors computer crimes. Have them conduct research to see if they can locate which federal agencies are involved in investigating these crimes. They may be surprised to know that the FBI investigates within the U.S. while the
CIA protects U.S. interests worldwide.
Safeguards exist to help prevent threats from negatively impacting business.
Occasionally businesses have to combat crime once it has occurred. That is when the field of electronic, or digital, forensics can be most beneficial.
Copyright © Texas Education Agency, 2012. All rights reserved.
5

E. Limiting use of a site’s documents
F. Firewall – protects your network
1. brings buyers and sellers together
2. airline and travel sites
2. portals, such as search engines
1. e-tailers strictly selling on Internet
2. mail order with catalogs, online and in print
1. direct selling from the product manufacturer
2. certain computer brands
1. they don’t sell directly but their information is included on other sites
3. “hits” to the site
4. results
5. click to pay
F. Community – social networking sites
1. Internet service providers (ISPs)
2. free content in addition to subscription content such as video rentals or family and friends search tool
Features such as security software and a firewall can help to prevent computer crimes.
Secured Sockets
Layer, displaying the padlock on your site, and requiring a card code when customers make a purchase, do a lot in protecting the customer.
Selling products and services directly from your web site is only one way to generate revenue for your business.
Many revenue models exist to help your business make money.
You can have a broker service whereby you bring together buyers and sellers in a portal, similar to the travel web sites. Your business can use classified ads as well. The merchant model is probably the most familiar as this is the model for direct selling, usually online only.
Affiliate programs are popular today, as a business can have ads on other
Copyright © Texas Education Agency, 2012. All rights reserved.
6

complementary products and services
I. Trade and industry organizations – links from organization’s site to which you belong directing visitors to your site sites, banner, and click-to-pay options, all of which generate revenue.
Ads and links to your web site are also being placed on social networking sites, trade organization sites, and sites that sell products or services that are complementary to your business.
Go to the Internet and locate a variety of web sites with different types of ads and discuss with students the different ways these ads can create revenue.
Copy and Paste Multiple Intelligences Graphic in appropriate place in left column.
Application
Guided Practice (LSI Quadrant III):

Discuss the lottery with students and the concept of measuring risks and rewards.
How is this accomplished when talking about winning the lottery? What are the risks and what are the rewards? Sometimes people do not think of risks when it comes to winning a lottery.

Ask students what they think the risks are when they are online. Write down their responses. Ask them if they would be comfortable providing personal information online, such as when they register for a social networking site.
Independent Practice (LSI Quadrant III):

Risk/Reward Diagram Assignment #1 – Create a diagram analyzing the risks and rewards for a number of different situations. For example, the risks/rewards for taking a certain job, getting accepted to a certain college, or lowering the price you
Copyright © Texas Education Agency, 2012. All rights reserved.
7

charge for a product. Students should show five situations and list a risk and reward for each. They will put them in order from least risky to most risky. The risks and rewards should not be duplicated for any of the situations.

Gift Shop Web Site Proposal Assignment #2 – Students have been approached to create a web site for a local gift shop that also sells gift baskets for special occasions. They would like to increase revenues for their gift baskets. You are not the only one who has been approached so you must write a proposal that explains the type of revenue model you would use for the site. You must also include recommendations for security measures that should be included on the site.

Web Site Cost Research Document Assignment #3 – Because rewards are usually associated with some type of cost, it is important to understand that businesses pay a cost for advertising which generates revenue for the business.
Students will prepare a document of their choosing that details at least five different costs associated with having a business web site. These can include prices for different types and sizes of ads, hosting fees for your web site, registering your domain name, intangible costs of creating your site, or any other costs that students can think of.
Summary
Review (LSI Quadrants I and IV):
Q: What are the risks involved with a virtual business?
A: Risks are: loss of money, being in debt, having to start over, and damage to the business’s reputation.
Q: What is a denial of service attack?
A: This is when a server is intentionally overloaded causing web sites and/or computer networks to shut down temporarily.
Q: What are two email scams that are designed to gain access to personal information?
A: Phishing and pharming are e-mails that either ask you to update your personal information or ask you to click on a link that looks like a legitimate site and then you volunteer information.
Q: What are the main rewards of having a virtual business?
A: Several risks are revenue for your business, self-satisfaction, customer satisfaction, and a favorable reputation for your business.
Q: Why are business models important?
A: The type of business model your virtual business operates under determines the main revenue stream for your business.
Evaluation
Informal Assessment (LSI Quadrant III):
1. Instructor will observe students during Independent Practice.
2. Instructor will assist students as needed.
Formal Assessment (LSI Quadrants III and IV):
Use the assigned rubrics to evaluate the two Independent Practice Assignments (LSI
Quadrant III).
Extension
Extension/Enrichment (LSI Quadrant IV):
1. Interview a business owner, who also has a web site, and ask them two main questions: 1) what do they consider to be the biggest risk(s) in doing business online
Copyright © Texas Education Agency, 2012. All rights reserved.
8

and 2) what type of business (revenue) model does their business utilize? Write a one-page report summarizing the answers to these questions.
2. Using four of the business models in the presentation, identify two web sites that use the models you have selected. Display your findings in a document of your choice.
Copyright © Texas Education Agency, 2012. All rights reserved.
9

Risks and Revenues
Independent Practice Assignments

Risk/Reward Diagram Assignment #1 – Create a diagram analyzing the risks and rewards for a number of different situations. For example, the risks/rewards for taking a certain job, or getting accepted to a certain college, or lowering the price you charge for a product. Students should show five situations and list a risk and reward for each. They will put them in order from least risky to most risky. The risks and rewards should not be duplicated for any of the situations.

Gift Shop Web Site Proposal Assignment #2 – Students have been approached to create a web site for a local gift shop that also sells gift baskets for special occasions. They would like to increase revenues for their gift baskets.

You are not the only one who has been approached so you must write a proposal that explains the type of revenue model you would use for the site. You must also include recommendations for security measures that should be included on the site.
Web Site Cost Research Document Assignment #3 – Because rewards are usually associated with some type of cost, it is important to understand that businesses pay a cost for advertising which generates revenue for the business.
Students will prepare a document of their choosing that details at least five different costs associated with having a business web site. These can include prices for different types and sizes of ads, hosting fees for your web site, registering your domain name, intangible costs of creating your site, or any other costs that students can think of.
Copyright © Texas Education Agency, 2012. All rights reserved.
10

Student Name: ________________________________________
CATEGORY 20 15 8 1
Required
Elements
The diagram includes all required elements as well as additional information.
All required elements are included on the diagram.
All but one of the required elements is included on the diagram.
Several required elements were missing.
Labels All items of importance on the diagram are clearly labeled.
Almost all items of importance on the diagram are clearly labeled.
Several items of importance on the diagram are clearly labeled.
Labels are too small to view OR no important items were labeled.
Mechanics Capitalization and punctuation are correct throughout the diagram.
There is one error in capitalization or punctuation.
There are two errors in capitalization or punctuation.
There are more than two errors in capitalization or punctuation.
Content Student clearly understands the concepts of risk and reward.
Student adequately understands risk and reward.
Student shows less than adequate understanding of risk and reward.
Student demonstrates little, if any, understanding of risk and reward.
Organization The diagram is extremely well- organized and easy to read.
The diagram is organized and easy to read.
The diagram is slightly unorganized but easy to read.
The diagram is unorganized and difficult to read.
Total Score _____________
Maximum 100 Points
Copyright © Texas Education Agency, 2012. All rights reserved.
11

Student Name: ________________________________________
CATEGORY 20 15 8 1
Organization Information is very organized with wellconstructed paragraphs and subheadings.
Information is organized with wellconstructed paragraphs.
Information is organized, but paragraphs are not well-constructed.
The information appears to be disorganized.
Quality of
Information
Information clearly relates to the main topic.
Information clearly relates to the main topic.
Information clearly relates to the main topic.
Information has little or nothing to do with the main topic.
Paragraph
Construction
All paragraphs include introductory sentence, explanations or
Most paragraphs include introductory sentence, explanations or details, and concluding sentence. details, and concluding sentence.
Paragraphs included related information but were typically not constructed well.
Paragraphing structure was not clear and sentences were not typically related within the paragraphs.
Mechanics No grammatical, spelling, or punctuation errors.
Almost no grammatical, spelling
A few grammatical, spelling, or or punctuation errors punctuation errors.
Many grammatical, spelling, or punctuation errors.
Content Proposal demonstrates exceptional understanding of business models and security issues.
Proposal demonstrates adequate
Proposal demonstrates less than adequate
Proposal demonstrates little understanding of understanding of business models and understanding of business models and business models and security issues. security issues. security issues.
Total Score _____________
Maximum 100 Points
Copyright © Texas Education Agency, 2012. All rights reserved.
12

Student Name: ________________________________________
CATEGORY 20 15 8 1
Required
Elements
The document includes all required elements as well as additional information.
All required elements All but one of the are included on the document. required elements is included on the document.
Several required elements were missing.
Content -
Accuracy
At least five accurate costs are displayed on the document.
Four accurate costs are displayed on the document.
Two to three accurate costs are displayed on the document.
Less than two accurate costs are displayed on the document.
Mechanics Capitalization and punctuation are correct throughout the document.
There is one error in capitalization or punctuation.
There are two errors in capitalization or punctuation.
There are more than two errors in capitalization or punctuation.
Attractiveness The document is exceptionally attractive in terms of design, layout, and neatness.
The document is attractive in terms of design, layout, and neatness.
The document is acceptably attractive though it may be a bit messy.
The document is distractingly messy or very poorly designed. It is not attractive.
Content Student demonstrates exceptional understanding of the costs of a web site.
Student demonstrates adequate understanding of the costs of a web site.
Student demonstrates less than adequate understanding of the costs of a web site.
Student demonstrates little understanding of the costs of a web site.
Total Score _____________
Maximum 100 Points
Copyright © Texas Education Agency, 2012. All rights reserved.
13