NEW. youth. Entrepreneur. the KAUFFMAN. NYE Intermediate Instructor s Guide: Modules Foundation

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1 youth NEW Entrepreneur the NYE Intermediate Instructor s Guide: Modules 1-13 g KAUFFMAN Foundation

2 Features of Instructor's Guide Information for instructors about each of the thirteen modules is divided into sections that include the following features: I Overview II Objectives III Key Terms IV Answers to Questions in Student Workbook Suggested answers to student questions V Supplemental Learning Activities To enhance workbook information VI Supplemental Handouts (Not included in Module 13.) For use with supplemental learning activities to reinforce basic skills and knowledge VII Suggested Test Questions Ten questions that focus on expected learning outcomes (Answers to Suggested Test Questions can be found at the end of Module 13.) iv

3 Table of Contents Module 1: Getting Ready for Entrepreneurship: Entrepreneur? Who, Me? YESS! You... 1 Overview... 1 Objectives... 1 Key terms... 2 Answers to Questions in Student Workbook... 2 Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 2: Getting Ready for Entrepreneurship: Opportunities: They Are All Around You Overview...15 Objectives...15 Key Terms...15 Answers to Questions in Student Workbook...16 Supplemental Learning Activities...26 Supplemental Handouts...30 Suggested Test Questions...31 Module 3: Getting Ready for Entrepreneurship: Business Ideas for All Communities Overview...32 Objectives...32 Key Terms...32 Answers to Questions in Student Workbook...33 Supplemental Learning Activities...34 Supplemental Handouts...35 Suggested Test Questions...36 Module 4: Big Picture: Economics, Pricing & Global Marketplace...37 Overview...37 Objectives...37 Key Terms...38 Answers to Questions in Student Workbook...39 Supplemental Learning Activities...45 Supplemental Handouts...47 Suggested Test Questions...48 Module 5: Money to Get Started...51 Overview...51 Objectives...51 v

4 Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 6: Where to Do Business Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 7: How to Sell Your Idea Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 8: Types of Business Ownership Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 9: Where To Get Help Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 10: Records and Books: Did You Make Any Money? Overview Objectives Key Terms Answers to Questions in Student Workbook vi

5 Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 11: The Rules of the Game Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 12: How to Mind Your Own Business Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Supplemental Handouts Suggested Test Questions Module 13: You Can Make It Happen-YESS! You The Business Plan Overview Objectives Key Terms Answers to Questions in Student Workbook Supplemental Learning Activities Suggested Test Questions Suggested Test Questions Answer Key for Modules Student Handouts... Appendix vii

6 Entrepreneur? Who, Me? YESS! You

7 Module 1 Getting Ready for Entrepreneurship: Entrepreneur? Who, Me? YESS! You What is an entrepreneur? Can you be an entrepreneur? Roles and contributions of entrepreneurs to society Overview Module 1 explores the definition of an entrepreneur and introduces activities that help students decide if they want to consider becoming entrepreneurs. Included are common characteristics and skills of successful entrepreneurs, along with checklists to help students learn about their own personal characteristics and skills. Also included are analytical exercises that explore issues entrepreneurs must think about when starting a business if they are to be successful. Objectives After completing this module, the student should be able to: 1. Define an entrepreneur and an entrepreneurial person. 2. Understand why problems are opportunities for entrepreneurs and why opportunities are so important for entrepreneurs. 3. Understand how "wants" and "demands" create opportunities for entrepreneurs. 4. Understand the key role of entrepreneurs in the development of our economy. 5. Understand the difference, advantages, and disadvantages of managers and entrepreneurs. 6. Identify the key steps involved in setting up an entrepreneurial venture. 7. Identify the characteristics and skills that are important for entrepreneurs. 8. Determine their personal interest in entrepreneurship

8 9. Create your personal vision statement, goals, and strategy. Key Terms Demand: A want backed by the willingness and ability to pay for it. Entrepreneur: A person who identifies an opportunity, comes up with an idea and brings resources together to set up and run a venture to provide a product or service; risk-taker with a business idea; one who sees what others have overlooked and takes action where others have hesitated. Entrepreneurial characteristics: Personal traits, such as creativity, persistence, adaptability and commitment that are typically possessed by successful entrepreneurs. Entrepreneurial skills: Necessary abilities, including leadership, communication, team-building and decision-making, that successful entrepreneurs must cultivate. Entrepreneurial venture: A business started by an entrepreneur who sees an opportunity and decides to pursue it. Goals: Specific steps in a strategy. Manager: A person who organizes, coordinates, manages the daily aspects of someone else s business; not an entrepreneur. Opportunity: A problem, want or complaint to which an entrepreneur may decide to respond; a problem or need not yet met by the marketplace. Personal vision statement: A written statement describing what you want to be or do in life. Strategy: A plan to help achieve your personal vision statement. Want: A desire; something that people would like to have. Answers to Questions in Student Workbook The following pages contain suggested answers to questions in Module 1. In many cases, the answers are representative and may vary, depending on the individual student, classroom or community circumstances. Note: Activities to supplement those in the student workbook may be found on page 10 of this guide

9 Note: See Supplemental Learning Activities, page 10 of this guide: #1 (introductory activity) and #2 (topic for student journal) may be assigned prior to beginning study of Module 1. Page 3 DEFINITION: If I had to describe an entrepreneur, I would say... Answers: Descriptions of an entrepreneur may include the following: owns business takes risks is self-employed recognizes market opportunities mobilizes resources Describe the kinds of things you believe entrepreneurs do in our society. Once you have completed your list, turn to page 34 for a list of entrepreneurial roles and contributions. Answers: The following represent some of the roles and contributions of entrepreneurs: create new business ventures make goods and services available to people create jobs contribute to economic growth provide new initiatives and innovations Page 7 Complaints: Answer: While answers will vary, an example may be that families don't like to board their animals when they go on summer vacations. What might be done? Answer: Young entrepreneurs can offer a service to care for animals during owners' vacations. Page 9 Group Activity: How would you try to solve any of these problems that the group of young people faced? Answer: While answers will vary, an example may be to coordinate a carwash or raffle. Page 11 Group Activity: Select a service or product that successfully filled a need and created a demand

10 Answer: While answers will vary, a possible answer is: Personal Digital Assistants (PDAs). Who developed/invented the service or product? Answer: While answers will vary, a possible answer is: PDAs were invented by Jeff Hawkins, Donna Dubinsky, and Ed Colligan of Palm Computing. What opportunity or want did the entrepreneur identify? Answer: While answers will vary, a possible answer is: Palm Computing identified the want for combination portable computers and computerized planners. Was it a new product or service or an improvement to a new product or service? Answer: While answers will vary, a possible answer is: PDAs were a new product. What did the entrepreneur do to help create a demand? Answer: While answers will vary, a possible answer is: Palm Computing effectively marketed to professionals who were technologically savvy and interested in convenience. Page 13 Identify five "Wants" that many people have and then identify a type of business in your community that produces a product or provides a service to help satisfy those wants. Possible Answers appear in the chart below: "Want" Business Product or Service Way for pets to stay in home when owners not home Pet sitting in client's home Care, supervision and emergency services for pets in owners' home when they're away Help with lawn care Basic lawn care Lawn mowing and trimming Extra nice company desserts Gourmet dessert delivery Home delivery of select types of fancy, made-to-order desserts - 4 -

11 Kitchen cupboards organized Cupboard organization service Clean, reorganize kitchen cupboards Help visitors find house Curbside house numbers Paint house numbers on curb using stencils and spray paint Page 14 ACTIVITY: In class discussion, identify movies that include an entrepreneurial character. Discuss why the character is entrepreneurial, based on the opportunity (want, demand) that was recognized. Answers will vary, depending on recent movie titles or older titles students remember. Ask students to fill out the chart with three movies they select. Possible Answers appear in the chart below: Movie Character Why They Were Entrepreneurial Barbershop Calvin Inherited barbershop from father The Aviator Howard Hughes Famous entrepreneur Spike Lee's "Do the Right Thing" the father, assisted by his sons Started and ran pizza parlor Tucker" Mr. Tucker Designed and manufactured automobiles "Forrest Gump" Forrest Started shrimp business Page 16 ACTIVITY: Think about, or look for, any businesses in your community that have closed. Why do you think they closed? Were there any obvious problems that the business was experiencing? Were they in the right location? Were they producing an appropriate good or service? Were they producing it well and offering a quality product or service? Was there competition? If so, how did they stack up? Try to identify three businesses that have closed and offer your opinion as to why they didn't succeed. Answers: While answers will vary depending on the businesses and circumstances, typical answers might include: (1) A gas station closed after it was bypassed by the new highway

12 (2) A small downtown hardware store closed six months after a large discount store opened on the edge of town. (3) A restaurant that had recently expanded closed when the owner could not afford the higher rent payments and could not make payments on the bank loan that financed the expansion. Note: See Supplemental Learning Activity, page 10 of this guide: #3, to use after completing page 15 in student workbook. Page 18 Examples of more businesses than I would have thought our community could support: Answer: While answers will vary by community, a possible answer is: A small town located near an exit of a major interstate highway may have more gas stations than an average community of its size would normally be able to support. Examples of businesses that I thought I would have seen more of: Answer: While answers will vary by community, a possible answer is: There may be only one department store in an urban downtown location because of new shopping malls in the suburbs. Possible opportunities in my community: Answer: Although answers will vary by community, a possible answer is: The new high school, scheduled to open next year, will create new opportunities for fast food restaurants close to the school. Page 20 ACTIVITY: Look at the Entrepreneur's Dozen again, and then consider the idea for a weekend dance club. QUESTIONS: Suppose the group of friends came to you and asked you to invest in their dance club business. What questions would you want them to answer before you made a decision? List below five key questions you would ask: Answers: Sample questions that one might ask: 1. How much money do you need to start your business? How will you break down the costs? 2. What is your evidence that this service will be in demand in the short run? In the long run? How do you plan to market your product or service? - 6 -

13 3. How will you divide responsibilities among the various people who will operate the business? What experience has each had in the area in which he/she will be working? 4. What do you estimate your profit will be this year, over the next five years, over the next ten years? 5. For the first few years, will you reinvest any profits back into the business or distribute them to the owners? Page 21-22: Check Point! Check Your Understanding 1. What is an entrepreneur and what does an entrepreneur do? Answer: An entrepreneur identifies opportunities, takes "risks," and brings together resources to set up and run a venture to provide goods or services consistent with the opportunities. 2. What is the difference between an entrepreneur and a manager? Answer: An entrepreneur owns their own business. A manager manages aspects of someone else s business, but does own the business. Business managers are employees of a business. 3. What is an entrepreneurial opportunity? Answer: A problem, want or complaint to which an entrepreneur may respond with an idea that can be turned into a business venture producing products and/or services. 4. What is the difference between "wants" and "demands"? Answer: A want is something which people would like to have. A demand is a want backed by people's willingness and ability to pay to acquire the product or service that satisfies that want. 5. What are some key steps involved in becoming an entrepreneur? Answers: Key steps include a. Identifying opportunities and generating product or service ideas that will satisfy consumer wants. b. Determining if enough demand exists for the product or service to be produced at a profit. c. Determining if the founders have enough commitment and expertise to do the work necessary to make the entrepreneurial venture a success. d. Determining how to put together the resources needed to produce the product or service

14 e. Projecting start-up costs, cash-flow and expected financial results. 6. Why do entrepreneurs face risk when setting up businesses? Answer: For example, they may not be successful in selling enough products or services to cover their costs. If they cannot meet their costs, eventually they will have to close their businesses. They will lose the money they invested, as well as their time and effort. 7. What might cause a business to fail? Answer: Many reasons may contribute to business failures, including under capitalization, cash-flow problems, lower-than-expected demand for a product or service, competition with a better product or a similar product at a lower price, poor location, ineffective marketing, inadequate cost control and poor business planning. 8. How do entrepreneurs view failures and mistakes? Answer: Entrepreneurs see failures and mistakes as learning experiences that help them in their next entrepreneurial venture. Pages 23-24: Entrepreneur's Quiz Explanations and Answers to the Entrepreneurs Quiz are in Student Workbook, pages Page 29 Entrepreneurial Characteristics: A Personal Reflection Note: See Supplemental Learning Activities, page 10 of this guide: #4 and #5, for activities with which to debrief this survey. Page 31 In addition to characteristics and skills, you may have already begun to develop hobbies, interests and skills that might relate to a business if not today, then eventually. Think about that. What hobbies do you have? Could any of these lead to a business some day? What skills have you developed or begun to develop (e.g., sports, music, mechanics, art, etc.)? Answers: While answers will vary depending on individual students' hobbies, possible answers are listed below: Hobbies I have: collecting baseball cards Possible business activities: selling baseball cards at sports trade shows - 8 -

15 Interests I have: music Business activities that may relate to my interests: selling used CDs Skills I have developed (am developing): computer programming Business activities to which my skills might relate: developing software programs. Page 32: Have students define their own personal vision statement, strategy, and goals. What are some reasons why you may need to revise your statement, strategy, and goals over time? Answer: Revising a personal vision statement, strategy, and goals is necessary because over time individual interests, desires, and dreams change. Page 33: Check Point! Check Your Understanding 1. What are some of the most important things that motivate an entrepreneur? Answer: Entrepreneurs truly enjoy problem solving. They are motivated by personal achievement. They like to build ventures. Entrepreneurs enjoy competing against themselves. They enjoy taking "educated" risks. Above all, entrepreneurs enjoy making a positive difference in life. 2. Why is money important to an entrepreneur? Answer: Many people believe that entrepreneurs are motivated entirely by money making money and spending it on themselves. But for most, money is not the primary reason they start a business. Most entrepreneurs are interested in money because it is necessary to start and maintain their business ventures. 3. Identify some of the most important characteristics for entrepreneurs. Answer: Entrepreneurs should have: spirit strong need to achieve desire for accomplishment self-confidence, self-reliance goals persistence energy, desire to work hard positive attitude willingness to take initiative strong sense of commitment - 9 -