Introduction to Business (BBI101)

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RULE OF 72 72 / Interest rate = # of years to double money

COMPUND INTEREST Present $ x Interest Rate x Time = Interest

COMPNENTS OF A BUDGET

REVENUE

Income after taxes (Net)

EXPENSES

Fixed monthly (mortgage, cable, internet) Variable (gas, groceries, meals, entertainment) Occasional

Characteristics

Opportunity Obsession

Find and fix problem

Self Reliant

Control their results Believes in themselves

Creative

Inventive and innovative (looks for new ways of doing things)

Confidence

Important to have that feeling of certainty/trust in yourself in order to do well

Motivation to Excel

Doing things for themselves NOT for power/status

Commitment

Conquer, drive, passion

Leadership

Good management abilities Teamwork

Risk-Takers

Weighs risks before jumping in

(BOTH good and bad risks)

Introduction to Business (BBI101)

Innovation

Improve on an existing invention

Invention

Creating a product from scratch

Setting up business/businesses. - Taking calculated risks

Elevator Pitch

Brief, persuasive speech used to spark interest to what you're doing

20-30 seconds

Steps

Engage: Get customers involved, attract attention

Uniqueness: What makes project different from others? what's unique?

What do you do? Describe what project is about

Loscus of Control

Refers to extent to which people believe they have power over events in their lives.

External: Passive "things happen to me"

Internal: Active 'I can make this happen"

Roles + Contribution

Act

QUICK Don't wait for others to figure out the problem

Solve

Find ways to fix problem

Must be able to get customers to buy for their needs & wants

Recognize

Look for problem

Problem: Needs & wants expectations not being met

What motivates entrepreneurs?

Sense of accomplishments

Carry on family business

Being challenged

Personal Finance

Income/Payroll

Disposable + Discretionary Income

Disposable: Total amount of money earned after taxes Discretionary: Total amount earned after all basic necessities are paid

Payroll

Salary

Piecework

Commission

Hourly Rate

Gross vs. Net Income

Gross: $ a person earns BEFORE taxes Net: $ a person owns AFTER taxes

Deductions

Taxes eg. EI, CPP

Money is used to pay for: Police, Health Care, Jails, Education, Roads, Welfare/Social Assistance.

Mandatory: By law, your employer takes deductions off pay cheque and send to government Voluntary: Optional deductions taken off your pay

Income - Deductions = Net Income

Purchasing Power

The more $ you have, the more you're able to purchase items in markets in exchange

Spend Save Invest Donate Gamble

PURCHASE DECISIONS

Money available Costs Buyer Behaviour Quality Comparison + Product info Service Warranties/Guarantees

Money

Medium that can be exchanged for goods and services

Paper Notes

Coins

Cheques

When do we still use?

Income payment Large Payments Government Payments Gifts

Components

Name Address Name to whom it's sent to Description Cheque # $ amount (standard) $ amount (words) Signature

Budgeting

plan for wise spending and saving based on income and expenses

YOU CAN: Organize and control your financial resources Set and realize goals

1. Calculate what you own 2. Calculate what you earn (NI) 3. Calculate what you owe 4. Calculate what you spend

Daily, weekly, monthly

Functions of a Business

Marketing

Marketing Mix

4 P's, 2 C's

Competition

Direct

Indirect

Consumer

Target Market

Promotion

Informs consumers about a product and encourages them to buy it.

Publicity

Public Relations

Sales promotion

Telemarketing

Personal selling

Place

Price

Often determined by quantity demand

Product

Packaging aka. Silent Salesperson

Jingles

Slogan (7 words or less)

Logo

Trademark

Labelling

Advertising

AIDA (Selling Formula

- Attention - Interest - Desire - Action

Goals of Advertising (RIP)

- Remind - Inform -Persuade

Accounting

Income Statement (3 $ Signs)

R - E = NI

Net Income/Loss

aka. Profit/Loss

Expenses

Money you spent for business

Revenue

Money that you earned within business

Balance Sheet (4 $ Signs)

A = L+OE

Owner's Equity

Net Worth "Leftover" (Capital)

Liabilities

Anything you owe (with value)

Assets

Anything you own (with value)

Production

Production Process

Grading

Quality Control

Process

Purchase

Productivity: The effectiveness of productive effort, as measured in terms of the rate of output per unit of input. Increasing productivity leads to increased profits for an organization.

Inventory systems

Invest in Technology

Capital Investment

Training

The action of making/manufacturing from components

Entrepreneurship

Human Resources/Labour

Capital

Land

Leadership & H.R.

Roles of Management

Controlling

Ensuring company goals are met

Organizing

Structure of event Specific tasks Procedures

Planning

Starts with research

Maslow's Motivators

Growth Needs

Work to gain experience to get promotions

Challenge people Offer support

Existence Needs

Work for money, nothing else

Pay people enough Set goals

Relatedness Needs

Interacting with people, have personal challenge and sense of achievement

Show respect Communication

POSITIVE VS. NEGATIVE LEADERS

Negative

Are dominant, act superior with people

eg. Penalties No pay Assigning tasks that are unpleasant

Positive

Use rewards to motivate employees

Independent Raises/Bonuses Acknowledgement

Types of Leadership

Laissez-Faire

French meaning: “Allow to act”

Little to no directions

No one is really in charge

Advice is given when asked

Democratic

Leader has final say

Supports teamwork

All members involved

Autocratic

Not open to new ideas

Boss tells what to do