Homework for the Week Beginning 29Th November 2010

Homework for the Week Beginning 29Th November 2010

HOMEWORK: To be handed in the week before Xmas

  1. Read the case study about Nicky Mullinder. Answer all the questions.
  1. Read the information provided about important enterprise skills.
  1. Read the case study about James Speke. Answer the two questions.

Nicky Mullinder

Nicky Mullinder works for a small engineering company. In her spare time she has come up with an idea for a new type of can opener. She is investigating whether or not to leave her job and set up a business that would make and sell the new can opener. Nicky has gone on a course provided by the local Business Link on setting up a business. Business Link is an organisationthat provides help and advice to small businesses. Before she went on the course, she was very optimistic about this new venture. She dreamed of selling millions of can openers a year. There would be a large factory making the can openers with a number of people working for her. Money from sales would flow into the business and she would earn a large profit. Then she would have enough money to buy a luxury car and a large house.

However, the course has made her much more pessimistic. Making a few can openers by hand in her home would be very different from making thousands every day in a factory. She had done no market research on whether customers liked her invention. She had no idea where the money would come from to start up her business. Giving up her job with a steady salary would be a hug risk since there was no guarantee that she4 would earn a single pennyin her new business. In fact, there was a good chance that the business would make a loss and her new can opener would never become a popular product.

  1. Explain TWO possible upsides to Nicky’s possible new business.
  2. Explain TWO possible downsides to Nicky’s possible new business.
  3. Why should Nicky apply the principle of calculated risk to her business proposition?
  4. What are the most important things Nicky now needs to do if she is serious about setting up a business making can openers? Justify your answer.

James Speke

More and more businesses are closing down and unemployment is rising. Sales of new cars are half what they were last year. You would have thought that now is not the time to start a new business. However, Jamie Speke has bucked the trend andlaunched out on his onw.

Jamie has worked for three small engineering firms in his career. In his last job, he was the manager of a msall company that made most of its money from maintenance contracts. The company would sign a deal with a customer to give 24 hour 7 day a week service. If a customer’s machine broke down, he would go out and repair the machine.

However, Jamie had become frustrated with the company that employed him. The owners did not want to take any risks and were not interested in expanding the business. So hemade plans to set up his own business. An opportunity came when a rival business was forced to close. It had been very badly run and Jamie was able to buy its building and machines for a knock down price.

His first priority was to keep the firm’s existing customers. Equally important, he went out and found new customers. Some of the more skilled workers were re-employed and new ways of working were introduced to cut costs. By raising sales and cutting costs, Jamie has been able to turn the business around in its first 12 months of operation. It has been hard work for Jamie, but having drive and determination has helped him establish a successful business.

  1. Jamie Speke has a number of enterprise skills. Explain THREE of these enterprise skills.
  1. Explain TWO reasons why buying a “rival business” was a good way for Jamie to establish his own successful business.

Information about Important Enterprise Skills

There are three key enterprise skills:

  • Being willing to take a risk – people must be willing to take the risk of setting up on their own and risking their savings to make the business successful
  • Showing initiative – an entrepreneur will be “proactive” and go out and make things happen, rather than sitting back and letting other people tell them what to do
  • A willingness to undertake new ventures– entrepreneurs and keen and enthusiastic about undertaking new challenges and starting new things.

To be successful in business, you need the following enterprise skills:

  • Being able to see new opportunities – an entrepreneur will spot a gap in the market or an opportunity that they think will make them money
  • Being a good planner – entrepreneurs are able to plan and organise themselves to make an idea actually work successfully
  • Being able to think ahead – an entrepreneur can predict fairly accurately what they think might happen in the future. They will consider the upsides and downsides of a particular course of action
  • Having the drive and determination to succeed – entrepreneurs never give up when things get difficult. They persevere and keep going, even when things get difficult.