Unit 1
Topic 1.2

Examples of entrepreneurs:
Sir Richard Branson
Laura Ashley
Sir Alan Sugar

Jude Gomila (born June 23, 1984) is a British entrepreneur and one of the co-founders of the website Heyzap.
Gomila grew up in Harrow, London and attended Nower Hill High
School. He then graduated from the
University of Cambridge with a
Masters in Engineering and
Management.
During his final year at University,
Gomila started Sugar Global, an electronics brand specialising in the sale of digital photo frames to UK stores such as Harrods, Selfridges,
Amazon & Firebox.com.

He invented this: and this: and these:

James Dyson invented these products, he realised the potential to make money and took the risk of setting up his own business in order to sell them for a profit.

Goods
• Tangible (they can be touched)
• Physical (you can see it)
• Examples: a car, a pair of scissors, a TV
Services
• Intangible (they cannot be touched)
• Non-physical (you cannot “see” it)
• Examples: a taxi journey, a hair cut, a TV programme

An entrepreneur is someone who:
• Is willing to take risks
• Shows initiative
• Is willing to undertake new ventures
To be an entrepreneur, you need the following skills:
Risk
Taking
Enterprise
Skills
Showing
Initiative
Willingness to undertake new ventures

REASONS
• Tick FIVE reasons why you think a person might want to start up their own business
• Rank them in order of priority www.businesslink.gov.uk/
QUALITIES
• Tick FIVE qualities that you think an entrepreneur needs to successfully start up their own business
• Rank them in order of priority

Want:
• To be their own boss
• Make the major decisions
• Keep all the money that they make
• Use their skills (eg car mechanic)
• Freedom to work when they want to
• Develop an idea they have
• Has some money to invest
• May have been made redundant
• May not enjoy paid job
• Organised
• Willing to take a risk
• Initiative
• Perseverance
• Determination
• Creative and innovative
• Commitment
• Stamina
• Good judgement
• Leadership skills

Read Page 36 about Dean Fellows
1. In each of the enterprises, was Dean producing a good or a service?
Window cleaning; cleaning houses; property development; fish and chip shop; manufacturing chip fryers
2. Which of Dean’s enterprises has been the most successful? Why?
3. Which of Dean’s enterprises was the most risky?
Why?

Case Study: Charlotte Yelland,
Page 39
Read the case study, then answer the following questions in your exercise book:
1. Two examples of services in the case study are ……
2. Two examples of goods in the case study are ……
3. Charlotte is showing enterprise. She is showing that she is willing to take a risk because … She is also showing initiative because ……… She is also showing a willingness to undertake new ventures because ……

Which THREE of the following are enterprise skills?
A A willingness to take a risk
B A willingness to spend money
C Showing initiative
D A willingness to finish new ventures
E Showing you can follow instructions
F A willingness to undertake new ventures
ANSWERS: A, C, F

Answer a question where you have to make a judgement.
Requires you to undertake research.
Requires you to write up what you find out and make a decision.
Eg In your opinion, is Tesco a successful company?
Homework: for Thurs, 14 October 2010

• They took a game show they knew was successful
• They wrote down the features of the game
• They changed the features
• They created a new game show

Features of “Who Wants
To Be A Millionaire”
1) Contestant and host sit
2) One contestant plays at a time
3) There is not always a winner
4) Prize fund is always the same
5) Contestant can take their time
6) Host is friendly to the contestant
1) Contestant and host stand
2) Nine contestants play at the same time
3) There is always one winner
4) Prize fund varies from program to program
5) Contestant is pushed for time
6) Host is not friendly to the contestants
The Weakest Link

Blue Skies Thinking
Start with an idea or object and then write down anything that comes to mind. Having exhausted the ideas, assess which would best solve the problem.
Lateral Thinking
Trying to come up with new, innovative ideas by
“thinking outside the box”.
Six Thinking Hats
A technique which explores one idea and looks at it from different viewpoints.
At the end of the activity a decision is made.

• Take an idea, an object or a question
• Write down anything that comes to your mind as you look at the idea, object or question
• Do not analyse your ideas, just write them down
• When ideas have been exhausted, assess:
- which ideas are important
- which ideas best solve the problem
- which ideas could provide the answer to the problem

Example of Blue Skies Thinking
Megan and Tyler wanted to start up their own business. They were looking around for a business idea. They put a plastic bag on the kitchen table and started blue skies thinking …
Plastic
Refuse
Tipped
Run out
Black
Tip
Strong
Dustbin
Lorry
Dirty
Cupboard Thin
Cheap
On a roll
Supermarket
Xmas presents
From this list, they decided to produce a range of bin liners for all the different types of dustbins and recycling bins that households now have.

• Push chair
• Pen
• Book
• Can of drink
• Waste paper basket
• Saucepan
• Calculator
• Greetings card
• An earring
• Mouse mat

Object: …………………………….
Words that came to mind:
Circle the words that you think are important

A man lives on the twelfth floor of an apartment building. Every morning he takes the elevator down to the lobby and leaves the building. In the evening, he gets into the elevator, and, if there is someone else in the elevator -- or if it was raining that day -he goes back to his floor directly. Otherwise, he goes to the tenth floor and walks up two flights of stairs to his apartment.
WHY?
The man is a dwarf. He can't reach the upper elevator buttons, but he can ask people to push them for him. He can also push them with his umbrella.

A man and his wife raced through the streets.
They stopped, and the husband got out of the car. When he came back, his wife was dead, and there was a stranger in the car.
WHY?
The wife was about to have a baby. They drove to the hospital. The husband left to get a wheelchair, but the baby was born in the meantime, and the wife didn't survive the birth .

• Look at the words you have written down
• Try to come up with a new and innovative idea
• Try to think of something that is not available at the moment – this will give your business a competitive advantage
• Think about who will buy your idea

Examples of Products with USPs
(Unique Selling Points)
Innocent Smoothies for kids:
100% pure fruit, no added sugar.
Preservatives or sweetners
Mars was the first company to bring out a chocolate bar as an ice cream

Our idea:
Image : a drawing of your design idea with labels where appropriate
Details/Specification : a description of your idea and the main unique features (the
USP – the Unique Selling Point)

Case Study: Lily Ashbourne, Page
43
Read the case study, then answer the following questions in your exercise book:
1. Two examples of blue skies thinking are when Lily thought ……
2. One example of lateral thinking is when Lily ……
3. Lily could sell cards herself or sell them through shops. Which do you think would be the best for
Lily? Justify your answer.
4. Complete the puzzle.

Jacob attends a course on setting up a business. On the course, he participates in a blue skies thinking session. Which ONE of the following is most likely to be correct?
Blue skies thinking:
A will put him at a competitive disadvantage when he starts his own business
B is an example of creative thinking
C is the opposite of lateral thinking
D discourages people from thinking of new ideas
ANSWER: B

Alison Tarrach is setting up a sandwich making business.
Which ONE of the following is most likely to give her business a competitive advantage?
A High quality locally sourced ingredients
B High borrowing costs
C Shorter opening hours than competitors
D Expensive rent on her premises
ANSWER: A

Courtney Farnham is investigating setting up a business as a dance teacher and is thinking particularly of how she could attract pupils to take up her dance classes. Which ONE of the following is most likely for her to be an example of lateral thinking about attracting customers?
A She will have to give up her present job with a salary of £20,000 per year
B It would be a good idea for her to take out insurance in case of accidents to her pupils
C She should get advice from experts on how to set up a business
D She could give singing lessons for pupils that wanted to perform musicals
ANSWER: D

Which TWO of the following are the best examples of deliberate creativity?
A Day dreaming
B Lateral thinking
C Red skies thinking
D Imagining yourself as an entrepreneur
E Blue Skies thinking
ANSWER: B, E

• The technique helps organise your business ideas
• You put on one hat at a time to think about the problem
• There are six coloured hats
• The technique is designed to help you solve a problem

The Six Thinking Hats:
Edward de Bono
Take your business idea and complete the De Bono Six Thinking Hats exercise.

1
2
3
4
5
6

Case Study: Megan & Tyler
Page 40
• Megan and Tyler wanted to start up their own business. They were looking around for a business idea.
• They decided to produce a range of bin liners for all the different types of dustbins and recycling bins that households now have.

Think about the facts – how many people might use your idea? What information do we have? What information do we need? How can we get the information?
Megan and Tyler thought:
• 25 million households in the UK
• On average, two bins are collected at least once every two weeks
• If every household used bin liners, there would be a minimum of 1.25 billion bin liners used every year

Thinking about emotions and gut feelings. Does your intuition say it will work?
Megan and Tyler thought:
• Tyler was excited and thought the idea was a good one
• Megan was worried about the money they would need to get started

Think about the problems and difficulties of the idea – it is about being pessimistic. It prevents mistakes. Consider what can’t be done. Look at the disadvantages.
Megan and Tyler thought:
• Megan and Tyler thought they could use thousands of pounds if their idea failed
• Megan thought supermarkets might not buy from a small business

Thinking about the positive aspects of the idea.
What can go right and what are the potential benefits?
Megan and Tyler thought:
• Megan thought it would be good to be able to work independently
• Tyler looked forward to the profit they would make

Thinking creatively – assessing what might go wrong and how the problem can be overcome. Consider the problem and put forward a new idea to solve the problem.
Megan and Tyler thought:
• Megan and Tyler considered the problem about supermarkets not buying their product. If they didn’t buy the bin liners, then Megan and Tyler could sell to small local shops or over the internet.
• To persuade customers to buy, they could stress the problems of hygiene and germs.

This is thinking about all the aspects you have thought about and then making your decision. Consider the problem and offer a conclusion.
Megan and Tyler thought:
• Megan and Tyler looked at the ideas they had come up with
• They were worried about supermarkets not buying and that customers may not like their idea
• Overall they thought the idea was too risky and rejected the business idea

Consider your business idea and make a judgement about whether or not it is going to be feasible. Justify your answer.

Use a whole page to write down questions that you would ask yourself before you set up a new business.
Questions Entrepreneurs Ask
Why? What? How?
Where? When?
Why not?

What questions would you ask about the premises you intend to buy?
Wenlock and
Mandeville
What questions would you ask yourself about the products you are selling?
What questions would you ask about your customers?

Some questions we need to answer before starting a business
• Why do I want to set up a business?
• Why do I NOT want to set up a business?
• What will I sell?
• What price shall I charge?
• What resources do I need?
• Where will I sell it?
• Where do I get the money from?
• Where will I buy my supplies and raw materials?
• When will I start?
• How do I provide my product/service?
• How much should I produce?
• How do I know people will buy it?
• How do I stop others copying my idea? …………………

What if? Questions
Entrepreneurs Ask
Use a whole page to write down “what if?” questions that you would ask yourself before you set up a new business.
What if …?

Money and profit
Customers
Legal problems
Me?

• What if my customers do not like my idea?
• What if I don’t make a profit?
• What if I don’t make enough money to pay myself wages?
• What if I run into legal problems?
• What if I fall ill?
• What if the economy slows down?
• What if my prices are too high?
• What if I produce too little or too much? …

Rachel Owen has worked as a sales manager for the past
10 years for a car hire company. Her salary is reasonable, but Rachel finds the work boring. For the past 12 months, she has been thinking of quitting her job to set up her own business making and selling traditional sweets, biscuits and cakes.
1. Write down at least 5 questions she should ask herself as she explores and researches this change in her working life.
2. Explain three reasons why her idea is risky.
3. Explain another way she could approach the idea.

How risky is Rachel’s idea?
• Does she know definitely that she will get customers?
• Has she worked in this type of work before – does she know the industry?
• Has she had any experience of running her own business before?
• Does she know how much competition there is?
• Does she know about the legal constraints
(Food hygiene, etc)?

Rachel decided that her new business venture was high risk. She decided to stay in her current job but start her business in her spare time. In the evenings and at weekends she would make her sweets and cakes, and then sell them at local fairs and street markets. This way, she could minimise the risk of failure and build up her expertise. After
12 months, she would be in a better position to know whether or not she could do this full time and make a successful business venture.

Callum Fisher has decided to set up a shop selling teenage fashion clothes. He is worried about whether the business will be financially successful. Which ONE of the following questions is the most important to ask himself if he wants to research this more fully?
A What if I spend my money on going on holiday to Turkey rather than to Spain?
B What if the bank charges a very high rate of interest on the money I will borrow?
C What if I have to get up ½ an hour earlier to get to work on time?
D What if I get 10 applications for the job of sales assistant in the shop?
ANSWER: B

Charlotte Reely is thinking of setting up a restaurant. She wants her restaurant to offer customers something different from other restaurants in her local area.
Which ONE of the following questions is she likely to ask herself when researching this difference?
A Why not get a bank loan?
B Why not do the laundry on the premises rather than sending it to a professional cleaner?
C Why not buy an estate car rather than a van for the business?
D Why not offer 100% organic food on the menu?
ANSWER: D

Test Your Knowledge …
Ethan Blake is developing a new product for the market. It is a software program that will allow a user to instantly compare different results from different search engines on the internet. Which ONE of the following questions should he ask himself if he wants to find out whether there will be customers for his product?
A How many programs will I sell if I charge £20 per copy?
B What will be the costs of production?
C How much should I spend on advertising?
D Where might customers want their orders delivered?
ANSWER: A

A USP
Unique Selling Point
Cadbury’s
Spots versus Stripes

He invented this: and this: and these:

James Dyson: Dyson’s Cleaners
• Engineering background – always keen on new inventions and he had an idea he believed would make him money – a “bagless” vacuum cleaner
• Didn’t want his new invention copied by others so he patented all the different components of his new vacuum cleaner. He also had over 5,000 prototypes.
• Battled for 5 years to find a UK company that would produce his cleaner. Finally, he decided to do it on his own in Japan and within 22 months, it was the UK’s best-selling cleaner
• Has continued to invent new products that solve problems
• Now has a personal fortune of over £700 million

1. Produce a word processed document that explains how James
Dyson overcame the problems of setting up a new business.
2. Having completed your research, explain the characteristics James
Dyson has shown as an entrepreneur.

Invention : The discovery of potential new products and new ways of making products.
Innovation : The process of transforming an invention into a product that customers will buy.
Sort the pictures into two columns:
1) Pictures that are inventions
2) Pictures that are innovations

The discovery of potential new products and new ways of making products. New ideas come about by:
• People who use products (eg James
Dyson)
• Employees in research departments (eg
Wii invented by specialists at Nintendo)

Engineers and scientists are paid to create and design new products
Dyson’s Research Laboratory in Wiltshire

The process of transforming an invention into a product that customers will buy. It is the commercial exploitation of an invention.
• An idea could be sold to a manufacturer (eg James
Dyson tried to sell his idea to cleaner manufacturers)
• An entrepreneur could set up their own business and sell their idea (eg Dyson)
Which is the easier option?
Which is the most profitable?

Innovations

Patents
The right of ownership of an invention or process when it is registered with the government. Anyone copying a patented idea can be taken to court and sued for damages. In the UK, patents last for 20 years.

The “Butter Stick” was not patented when it was first invented:

Copyright
The legal ownership of material such as books, music and films which prevents these being copied by others. If others copy the materials they can be taken to court and sued. Authors are protected for their lifetime and 50 years or more after they are dead. Authors can also claim royalties when their material is used/sold.

Robbie Williams gave permission for 30 seconds of his “Millennium” music to be played in a James
Bond film, “You Only Live
Twice”.
The royalties he received allowed him to buy an island.

Trademarks
The symbol, sign or other features of a product or business that is protected by law. For example, Coca-Cola is registered as a trademark – anyone who tries to sell any product under the Coca-Cola name can be sued.

A business selling drinks set themselves up as:
Coke Cola Ltd
Coca Cola successfully won a court case which forced the company to change its name as it was taking advantage of the goodwill in the brand owner's brand or trademark.

Jeff Briggs, an entrepreneur, spends £10,000 designing a cake recipe and selling it to customers through a manufacturer. This is an example of: a) Innovation b) A patent c) Invention d) Branding
Answer: A

A small business has developed a new type of product. It can legally protects its discovery by: a) More new inventions b) Innovation c) Developing a brand d) Taking out a patent
Answer: D

Three musicians have got together to form a group. They compose some original songs.
Their songs can be legally protected through: a) Patents b) Copyright c) Innovation d) Invention
Answer: B

Callum Fisher has decided to set up a shop selling teenage fashion clothes. He is worried about whether the business will be financially successful. Which ONE of the following questions is the most important to ask himself if he wants to research this more fully?
A What if I spend my money on going on holiday to Turkey rather than to Spain?
B What if the bank charges a very high rate of interest on the money I will borrow?
C What if I have to get up ½ an hour earlier to get to work on time?
D What if I get 10 applications for the job of sales assistant in the shop?
ANSWER: B

Charlotte Reely is thinking of setting up a restaurant. She wants her restaurant to offer customers something different from other restaurants in her local area.
Which ONE of the following questions is she likely to ask herself when researching this difference?
A Why not get a bank loan?
B Why not do the laundry on the premises rather than sending it to a professional cleaner?
C Why not buy an estate car rather than a van for the business?
D Why not offer 100% organic food on the menu?
ANSWER: D

Test Your Knowledge …
Ethan Blake is developing a new product for the market. It is a software program that will allow a user to instantly compare different results from different search engines on the internet. Which ONE of the following questions should he ask himself if he wants to find out whether there will be customers for his product?
A How many programs will I sell if I charge £20 per copy?
B What will be the costs of production?
C How much should I spend on advertising?
D Where might customers want their orders delivered?
ANSWER: A

Jacob attends a course on setting up a business. On the course, he participates in a blue skies thinking session. Which ONE of the following is most likely to be correct?
Blue skies thinking:
A will put him at a competitive disadvantage when he starts his own business
B is an example of creative thinking
C is the opposite of lateral thinking
D discourages people from thinking of new ideas
ANSWER: B

Alison Tarrach is setting up a sandwich making business.
Which ONE of the following is most likely to give her business a competitive advantage?
A High quality locally sourced ingredients
B High borrowing costs
C Shorter opening hours than competitors
D Expensive rent on her premises
ANSWER: A

Courtney Farnham is investigating setting up a business as a dance teacher and is thinking particularly of how she could attract pupils to take up her dance classes. Which ONE of the following is most likely for her to be an example of lateral thinking about attracting customers?
A She will have to give up her present job with a salary of £20,000 per year
B It would be a good idea for her to take out insurance in case of accidents to her pupils
C She should get advice from experts on how to set up a business
D She could give singing lessons for pupils that wanted to perform musicals
ANSWER: D

Which TWO of the following are the best examples of deliberate creativity?
A Day dreaming
B Lateral thinking
C Red skies thinking
D Imagining yourself as an entrepreneur
E Blue Skies thinking
ANSWER: B, E

Businesses can protect their business name and/or logo by law. The business would register their:
A Company name
B Trademark
C Patent
D Trade name
Answer: B

The business term that best describes a situation where an entrepreneur designs a product and successfully sells it, is called:
A Invention
B Product development
C Innovation
D Integrity
Answer: C

Examination Question:
Example
A manufacturer of sports equipment has invented a machine that can help people exercise whilst sitting at their desks at work.
1. Using the example above, explain the difference between invention and innovation.
3 Marks

Response 1
Invention is discovering a new idea for a product whereas innovation is organising the selling of the product to a customer.
2 Marks
Response 2
Invention is coming up with a new idea for a product.
Response 3 1 Mark
The sports manufacturer discovered a new product idea for an exercise machine - this is invention. If they successfully produce and sell the exercise machine to customers, this is innovation.
3 Marks

Claire has invented a device that monitors how many calories you eat in one day. She is wanting to organise the production of the device so that she can make money from her idea.
• Using the example above, explain the difference between invention and innovation.
3 Marks

• To understand the term “calculated risk”
• To understand the risks and rewards of setting up a business

Calculated risk is about putting a value or probability on a risk.
For example, what is the risk of getting injured when sky diving?
Is this a high , medium or low risk activity?
Is there a 50:50 chance of being injured or is it 70:30?
Entrepreneurs assess the risk of their idea and then make a decision, or decide how they might reduce the risk.
Complete the “Calculated Risk” activity, assessing the risk of each activity.

When assessing how risky a venture is, entrepreneurs must consider:
• The RISKS or DOWNSIDES (the disadvantages or what might go wrong)
• The REWARDS or UPSIDES (the advantages or what could go right) eg: What are the risks and rewards of going to
Huddersfield this Saturday evening?
Read the “Risks and Rewards” statements and put them in the correct column

Having assessed the upsides and downsides (the risks and rewards), would you like to set up your own business?
Give your decision and explain the reasons for and against the idea.

Page 55
Read the case study and answer the questions.

• Making profit
• Can buy a car and a house
• No market research
• No funds to start up the business
• Huge risk – no guarantee she would make money
• Business may make a loss
• The new can opener may never become popular
Action:
• Market research to establish whether there is a demand for the can opener
• Work out how much start-up capital she needs
• Research into sources of finance
• Find premises
• Find some possible suppliers of the raw materials
• Decide how many staff she will need
• Decide how to advertise and promote her new idea

Firms can measure how successful they are by using the following information:
• Profit figures
• Sales figures
• Number of customers
• Number of employees
• Number of stores
• Share price
• Market share

Read the statements provided and decide which skills are most important. Place them in a shape of a
“Diamond 9”. Copy the statements and the shape into your books.
Key Enterprise Skills
• Being able to see opportunities
• Good planning
• Drive and determination
• Being able to think ahead

have got what it takes to run a business?
www.business.link.gov.uk

Have I got what it takes to run my own business?
While completing the quiz, on lined paper, write down the skills they ask about in the questions.
On a Word document:
1. Skills required to run my own business:
2. Quiz Result:
Copy & paste/screenshot the result into your document and print.

A mind map is a diagram that records words and ideas. Entrepreneurs use them to help assess the strengths and weaknesses of an idea.
My Strengths and Weaknesses as an
Entrepreneur
Using the starter activity and your notes on lined paper, produce a mind map that shows your strengths and weaknesses as an entrepreneur.

• Read “Exam Zone Topic 1.2” worksheet – page 60 and 61 in the text book.
• Learn all the work completed so far for Mrs
Wright
TEST NEXT WEEK