Adding Value & Entrepreneurs
Adding Value
* Firms will attempt to add value to the product * Added value is the difference between the cost of materials used in the production process and the price the finished goods are sold for. * 25c
25c
New shampoo is sold for $6, therefore there is an added cost of $5.20
New shampoo is sold for $6, therefore there is an added cost of $5.20
25c
25c
SHAMPOO
30c
SHAMPOO
30c
Shampoo is sold for $4, therefore there is an added cost of $3.30
Shampoo is sold for $4, therefore there is an added cost of $3.30
20c
20c
20c
20c
SHAMPOO
30c
SHAMPOO
30c
Inputs -> Processes (Transformation) -> Output (Finished Products) *
An entrepreneur is a risk taker. They operate a business, but in order to start the business they must take a risk.
The role of the entrepreneur
The role of the entrepreneur is to identify a new idea or a new way of offering a good or a service, or to adapt an existing product or service. This involves : * An element of risk
The characteristics of successful entrepreneurs
Joe buys a café and employs 7 people, what are his most important characteristics of an entrepreneur? * Leadership skills: These are important in order to lead his team of 7 employees.
Other characteristics: * Innovation – Find a niece market * Commitment and self-motivation * Multi-skilled * Self confidence * Risk Taking
Example
John is a successful small business owner. He runs a café and employs 6 people. Could he be described as an entrepreneur? What personal characteristics may have contributed to his success?
John can be described as an entrepreneur, as he has taken a risk in order to establish his café. Some personal characteristics that may have contributed to his success include any leadership skills, as he will need to be able to lead and motivate his employees to work. He may also be self-motivated, as it will be a lot of hard work getting his café started.
Sefton’s beginning
* Firms will attempt to add value to the product * Added value is the difference between the cost of materials used in the production process and the price the finished goods are sold for. * 25c
25c
New shampoo is sold for $6, therefore there is an added cost of $5.20
New shampoo is sold for $6, therefore there is an added cost of $5.20
25c
25c
SHAMPOO
30c
SHAMPOO
30c
Shampoo is sold for $4, therefore there is an added cost of $3.30
Shampoo is sold for $4, therefore there is an added cost of $3.30
20c
20c
20c
20c
SHAMPOO
30c
SHAMPOO
30c
Inputs -> Processes (Transformation) -> Output (Finished Products) *
An entrepreneur is a risk taker. They operate a business, but in order to start the business they must take a risk.
The role of the entrepreneur
The role of the entrepreneur is to identify a new idea or a new way of offering a good or a service, or to adapt an existing product or service. This involves : * An element of risk
The characteristics of successful entrepreneurs
Joe buys a café and employs 7 people, what are his most important characteristics of an entrepreneur? * Leadership skills: These are important in order to lead his team of 7 employees.
Other characteristics: * Innovation – Find a niece market * Commitment and self-motivation * Multi-skilled * Self confidence * Risk Taking
Example
John is a successful small business owner. He runs a café and employs 6 people. Could he be described as an entrepreneur? What personal characteristics may have contributed to his success?
John can be described as an entrepreneur, as he has taken a risk in order to establish his café. Some personal characteristics that may have contributed to his success include any leadership skills, as he will need to be able to lead and motivate his employees to work. He may also be self-motivated, as it will be a lot of hard work getting his café started.
Sefton’s beginning