Start your own business

Economic and management sciences

Grade 6

Your own business venture

Module 11

Your own business venture

1. Start your own business

Would you like to be the boss of your own business one day?

What do we call a person who recognises a particular need or desire , gets a bright idea for providing a service or a product and then starts a business to meet that need or desire?

An E r.

An entrepreneur therefore converts a need that he or she has identified into a business.

This business can involve goods or services .

A definition of “goods”

Goods are products that are manufactured and that are for sale.

What is meant by services?

These are particular tasks that are carried out to benefit you and for which you pay.

Activity 1:

To identify typical businesses in my town/city

[lo 4.2]

a) Complete the table by writing down the names of five businesses that provide services and five businesses that provide goods in your town / city.

There may also be businesses that trade by selling products manufactured in factories.

b) Complete the table by providing names of three businesses that trade in clothing and three that sell foodstuffs.

Shops that sell goods are engaged in FORMAL trading, while street vendors, flea markets and car boot sales are examples of INFORMAL trading.

Activity 2 :

To analyse my potential as entrepreneur

[lo 4.1]

• To be able to start your own business requires particular personality traits. Let’s try to find out whether you may be an entrepreneur. Answer each of the following questions by indicating Yes , No or Maybe by means of crosses in the appropriate blocks of the questionnaire:

Add up your Yes , Maybe and No answers and enter it below.

Interpretation of answers:

Yes : 9 – 13! You have a head for business. Realise your dreams!

Yes : 5 – 8 You have potential, but will have to work hard to develop it.

Yes : 1 – 4 You should work on problem areas revealed by the questionnaire. Miracles still happen - or you may find someone who can complement you to work with you if you want to start a business.

You do need a particular kind of personality to become a successful entrepreneur and you also have to know what your strong points and weak points are.

The first step after deciding to start a business is to do proper planning. You have to plan the kind of product you want to provide, where you want to sell it, how much it will cost you, to whom you want to sell it and how you get the money that you need for starting your business.

Before you can begin to make plans for your business, you should identify an opportunity in your immediate environment to ensure your business of some success.

2. When will a business be successful?

• This happens when a business actually brings in more money (income) than it spends (expenditure). This means that the business is showing a profit.
• A business usually shows greater variety in expenditure than in income, because the service or goods will provide the only income.
• Expenditure that you have to bear in mind when you provide goods have to do with hiring premises, telephone hire, electricity, property tax, salaries and equipment (machinery), and the cost of materials from which your product is made. These are the running costs.
• Materials, labour and capital are required for any business to be productive. These are the inputs that are provided to the business. The inputs have to be converted to output , namely the products that are sold.
• The standard of living of the inhabitants of a country is largely determined by the productivity of those inhabitants. People need to be able to produce things that can be consumed to improve living standards. This again creates a demand for products and ensures work opportunities for people. If all the inhabitants of the country can find work or can create their own work, the standard of living will improve.

Assessment