Lesson Notes By Weeks and Term v5 - Grade 7

Lesson Video

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Performance objectives

• Define entrepreneurship and identify its key characteristics.
• Explain the stages of the production process with South African examples.
• Prepare a simple income statement to calculate profit or loss.
• Differentiate between needs and wants.
• Explain the difference between goods and services.

Lesson summary

This week, we will be revising and consolidating key concepts from the first term of Grade 7 EMS. This is crucial because understanding these foundational principles is essential for successfully tackling more complex topics later in the year and in subsequent grades. Strong EMS knowledge empowers you to make informed financial decisions, understand how businesses operate, and contribute to the economic well-being of your community and South Africa as a whole. For example, understanding needs vs. wants helps you budget your pocket money wisely, while understanding the production process helps you appreciate the value of goods and services.

Lesson notes

A. Entrepreneurship: Entrepreneurship is the process of designing, launching and running a new business, which is usually a small business. An entrepreneur takes the initiative to identify a need or opportunity and then organizes resources to create a product or service to meet that need. Successful entrepreneurs are vital to the South African economy because they create jobs, introduce innovative solutions, and contribute to economic growth. Characteristics of successful entrepreneurs: Risk-takers: Entrepreneurs are willing to take calculated risks to pursue their ideas. This doesn't mean being reckless, but rather assessing the potential rewards against the potential losses.

Innovative: Entrepreneurs often come up with new and creative solutions to problems or find new ways to improve existing products or services.

Persistent: Entrepreneurship is challenging, and successful entrepreneurs don't give up easily. They learn from their mistakes and keep pushing forward.

Hardworking: Building a successful business requires a lot of hard work and dedication. Entrepreneurs are prepared to put in the long hours and effort needed to succeed.

Passionate: Successful entrepreneurs are passionate about their businesses and believe in what they are doing. This passion drives them to overcome obstacles and achieve their goals.

Resourceful: Entrepreneurs are able to find creative ways to solve problems and make the most of limited resources. Think of someone starting a small spaza shop using their savings and leveraging community support. South African

Example: Consider Mama Thandi who starts a small catering business from her home in Soweto. She saw a need for affordable, home-cooked meals in her community. She borrowed money from a stokvel, used her cooking skills, and worked tirelessly to build her business. She faced challenges like competition and limited resources, but her persistence and hard work paid off, and her business is now thriving. This illustrates the core principles of entrepreneurship in action.

B. The Production Process: The production process is the sequence of steps involved in creating a good or service. It involves transforming inputs (resources) into outputs (finished products or services).

Stages of the Production Process: Input: This stage involves gathering all the necessary resources, such as raw materials, labor, capital (money and equipment), and land.

Processing: This stage involves transforming the inputs into a finished product or service. This could involve manufacturing, assembly, cooking, or any other process that adds value to the inputs.

Output: This is the final product or service that is ready to be sold to consumers. South African

Example: Let's consider the production of maize meal (pap), a staple food in South Africa: Input: Maize kernels (raw material), labor (farmworkers, factory workers), capital (farming equipment, milling machines), land (farmland), water, electricity.

Processing: Harvesting the maize, transporting it to a mill, cleaning and drying the kernels, milling the kernels into maize meal, packaging the maize meal.

Output: Bags of maize meal ready for sale in supermarkets and spaza shops.

Another example: Providing a haircut at a barber shop: Input: Barber, scissors, clippers, combs, shampoo, towels, electricity, water, shop space.

Processing: The barber uses their skills and tools to cut, wash and style the client's hair.

Output: A haircut.

C. Basic Accounting Principles: Accounting is the process of recording, classifying, summarizing, and interpreting financial transactions. It's essential for businesses to track their income and expenses, so they know whether they are making a profit or a loss.

Key Concepts: Income: Money earned from selling goods or services.

Expenses: Money spent on running the business (e.g., rent, salaries, supplies).

Profit: When income is greater than expenses (Income > Expenses).

Loss: When expenses are greater than income (Expenses > Income).

Income Statement: A financial statement that shows a business's income, expenses, and profit or loss over a specific period of time (e.g., a month or a year).

Calculating Profit or Loss: Profit/Loss = Total Income – Total Expenses

Example: Sarah runs a small tuck shop at school. In one month, her income from selling sweets and snacks was R

5

0

0. Her expenses were R200 for buying the sweets and snacks, and R50 for the rental of her table.

Total Income: R500 Total Expenses: R200 + R50 = R250 Profit: R500 - R250 = R250 Sarah made a profit of R250 in that month.

D. Needs vs.

Wants: Needs: Things that are essential for survival, such as food, water, shelter, and clothing.

Wants: Things that are not essential for survival, but that people desire, such as a new phone, designer clothes, or entertainment. Understanding the difference between needs and wants is crucial for making responsible financial decisions. We should prioritize our needs before spending money on our wants. E. Goods vs.