Lesson 5 – Tools For Building Your Business

                                            

Description:

In this lesson, students will present the business models they have developed to the group. At the end of the lesson is a list of suggested resources and tools students can use to continue to learn about entrepreneurship and build their businesses.

 

Time Required:

45 min

 

Required Materials:

Internet connection, writing instrument 

 

Prerequisites:         

Lesson 8.1 – Getting Started

Lesson 8.2 – Developing Your Business Model

 

 

8.5.A – Provide students with the opportunity to present the business model he or she developed and collect feedback from the class[40 min]:

Activity:  Presenting Your Business Model Canvas

Teacher Tip: Encourage students to challenge the assumptions of the presentation in order to generate stronger business models, but remind students to be respectful of each person.  Also, remind students that business models change and improve. If holes in the model are identified during the presentation, look at this as an opportunity for improvement not as a failure.

For this activity, each student will present their business model canvas to the group. Students should have up to 5 minutes to present and a few minutes to field questions from the group about the business model he or she created.

 

8.5.B Provide students with the opportunity to present the business model he or she developed and collect feedback from the class[40 min]:

Activity:  Business Tools and Resources

Below is a list of online resources you can reference as you begin to build your business. Each entrepreneur and each business is different. Use the resources below as a starting point as you being to discover tools and information that will help you be successful.

 

Foundation for Economic Education (FEE) – For young minds interested in an introduction to free market economics and its foundations in the broader philosophy of individual liberty, FEE is the best source for inspiring content, programs and community. FEE’s mission is to inspire, educate and connect future leaders with the economic, ethical and legal principles of a free society.

The Kauffman Foundation - The Kauffman Foundation is an organization that promotes and facilitates entrepreneurship and entrepreneurial education.

The Lean Startup - Startup success can be engineered by following the process, which means it can be learned, which means it can be taught. The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers' hands faster. The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.

The New Entrepreneur is Bloomberg BusinessWeek's blog geared toward the small business community.

 

 

EntreOasis is a website dedicated to being a central source of information, resources, and social networking for entrepreneurship.

Entrepreneurship.org - EntreWorld, from the Kauffman Foundation, is a collection of resources and tools for entrepreneurs.

Inc. Online - Inc. Online provides information for people starting and running their own businesses.

National Federation of Independent Business - The National Federation of Independent Business is an advocacy organization for small and independent businesses. Its site includes news topics and activities of interest to entrepreneurs and those interested in entrepreneurship.

Ice House Student Success Program

YourTeenBusiness.com

 

 

 

 

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Lesson Recap

 

• Congratulations! You have completed Economics of Entrepreneurship. You can now use the economic way of thinking to start and grow a successful business. Hopefully, this is just the beginning of your educational journey to learning about economics and entrepreneurship. 

 

• There is no better way to learn than to begin doing. Start your business using knowledge you have learned from these lessons. Reference your favorite lessons as needed for tips and tools to help you succeed.

 

• Creating and maintaining a culture that embraces entrepreneurship is critical to the long-term prosperity of our economy and our society. A prosperous future for us all depends on entrepreneurs like you!

 

 

Summary – Economics of Entrepreneurship

 

1. What is Entrepreneurship?

• Entrepreneurship is fundamentally about discovering an opportunity to meet a need. By solving a problem or filling a need in society, entrepreneurs not only enjoy profits, they also set the stage for economic growth and prosperity by creating more jobs and encouraging more entrepreneurship.
• A society that embraces entrepreneurship creates more jobs, produces more wealth, and allows individuals to exercise their creative talents. If we think entrepreneurship is a good thing, we should encourage more entrepreneurship by celebrating entrepreneurs and encouraging economic freedom.

 

2. What is the Entrepreneur’s Role in Creating Value?

• Wealth does not simply exist naturally in the world. The things we want and need must be created or produced before they can be enjoyed. Entrepreneurs play a key role in value creation. They create value for themselves by creating value for others.
• Value is subjective and is based on people’s preferences, tastes and opinions. This means that the value of a good is ultimate based on the tastes and preferences of an individual. Different people desire (or like) things differently, and the same person can desire the same thing differently at different times. Each of us is the best judge of what we value.
• Entrepreneurs create value by moving resources into more productive areas, innovating new products or processes to replace old ones, and discovering unnoticed opportunities to profit and acting on those opportunities.

 

3. How Can Entrepreneurs Use Economics to Make Better Decisions?

• We live in a world where our resources are limited compared to our wants. Because we are faced with the fundamental economic problem of scarcity, we have to make choices that involve tradeoffs. Economic thinking provides a set of tools that helps you make better decisions and enables you to better understand the choices of others. Entrepreneurs who use these critical thinking tools are in a position to make better choices about their business.
• Every decision to use a scarce resource has a cost. The cost is the value of the next highest alternative that has to be foregone as a result of your decision. In other words, the opportunity cost is the value of the best alternative forgone. Opportunity costs should always be considered so we can make more informed decisions about ways to best use our scarce resources, including our time.

 

 

 

 

4. How Does Trade Create Wealth?

• By engaging in specialization and trade, entrepreneurs are able to create far more value for themselves and society than if they were to work in isolation.  Trade creates wealth and directs resources from people who value them less to people who value them more.
• Markets are essentially extensive networks of cooperation. Learning to cooperate means you learn to trade well with others. In the market, people compete over ways to better serve people. Competition within a free market economy is actually a competition over who can best cooperate.
• Economic freedom is a key ingredient for economic and social progress. Trade not only creates material wealth, it also tends to promote cooperation, peace, and harmony among people.

 

5. What Do Profit and Loss Tell Us?

• Prices reflect the unique, situational, and ever changing knowledge of individual circumstances and preferences. Prices help coordinate the actions of people in the market by communicating the local knowledge of individual producers and consumers and providing the incentives for people to act on that knowledge. In a complex economy, a freely functioning price system enables voluntary exchange and social cooperation. 
• The profit and loss system provides incentives for entrepreneurs and communicates knowledge about the success (or failure) of their attempt to create value. In a market economy the function of profit and loss is to direct the allocation of resources to the most preferred uses of the people in society.

 

6. What Institutional Factors Encourage Entrepreneurship?

• People respond to incentives in predictable ways. The “rules of the game,” or what economists call institutions, influence the choices individuals make. Basic institutions like laws and cultural customs establish the foundational incentive structure of an economic system. Societies with an institutional environment that encourages entrepreneurship tend to greater numbers of individuals involved in wealth creating activities.
• Spontaneous order (emergent order) is a logical order that emerges from individual human action but not deliberate human planning or design. Money, language, traffic patterns, culture, and music are all powerful examples of emergent orders. It’s a common misconception that for order to exist in human society there needs to be a central planner or mastermind. In fact, history shows that attempts to centrally plan society results in chaos and disorder.
• Excessive regulations and licensing laws restrict the liberty of average citizens to live out their dreams in meaningful ways. The more barriers that government creates, the more difficult it is for people to find work, especially for aspiring entrepreneurs. Overly burdensome regulations and licensing laws restrict value-creating entrepreneurial activity.

7. What are the Links between Entrepreneurship, Personal Character, and Civil Society?

• Civil society refers to all the non-government institutions and associations that make up our communities. Civil society includes things like the family, religious groups, private enterprise, and charitable organizations.
• Strong personal character is essential for entrepreneurial success. Moral virtues such as ambition, integrity, courage, productiveness, and rationality translate into success in the business world. Furthermore, a free society is impossible without strong character. Entrepreneurship both demands and reinforces strong personal character.
• Humans are social creatures who need community to thrive. One reason we get so much benefit from living in society is the great diversity of skills, talents, and interests between individuals in society. If we care about preserving community, we also need to think about the unique individuals who make it up. Each person is an individual deserving of respect and dignity. The market encourages individuals to interact peaceably and build mutual trust.

 

8. How Do I Become an Entrepreneur?

• Entrepreneurs make money by creating value and serving the needs of others. Successful entrepreneurs are both wealth creators and problem solvers. One of the best ways to learn is through practical experience. Starting a business teaches students important life skills. Anyone can start a business. You don’t have to be creative. You don’t have to have the next big idea. You don’t have to have a lot of money. You don’t have to take on a lot of risk.