Lesson Notes By Weeks and Term v5 - Grade 9

Lesson Video

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Performance objectives

• Describe a target market for a business idea.
• Calculate basic revenue, cost, and profit.
• Develop a simple marketing plan.
• Explain the importance of good customer service and ethics.

Lesson summary

Entrepreneurship is about identifying opportunities and taking the initiative to start and run a business. In South Africa, where unemployment is a significant challenge, entrepreneurship is crucial for creating jobs, stimulating economic growth, and empowering individuals. This week, we focus on practical aspects of starting and running a small business, including understanding your target market, basic financial concepts, and marketing strategies. Learning these skills now will equip you to potentially create your own income-generating ventures in the future, contributing to your own well-being and the prosperity of your community.

Lesson notes

Entrepreneurship: The process of designing, launching, and running a new business, which typically begins as a small business or a startup company. Entrepreneurs take on the responsibility and risk of the enterprise.

Small Business: A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business. In South Africa, the definition varies depending on the sector, but generally involves fewer than 200 employees and a relatively small turnover.

Target Market: The specific group of people that a business aims to reach with its products or services. Understanding your target market is crucial because it allows you to tailor your products, marketing messages, and overall business strategy to best meet their needs and preferences. Factors to consider include age, gender, location, income, interests, and needs.

Market Research: The process of gathering information about your target market and the industry you are operating in. This can involve surveys, interviews, analyzing existing data, and observing customer behavior. Market research helps you understand the demand for your product or service, identify your competitors, and make informed business decisions.

Revenue: The total amount of money a business earns from selling its products or services. It is calculated by multiplying the quantity of goods sold by the price per unit.

Cost of Goods Sold (COGS): The direct costs associated with producing the goods or services that a business sells. This includes the cost of raw materials, direct labor, and other expenses directly related to production.

Expenses: All the other costs incurred by a business, such as rent, utilities, salaries, marketing costs, and administrative expenses.

Profit: The amount of money a business makes after deducting all its costs from its revenue. Profit = Revenue - Costs.

There are two main types of profit: Gross Profit: Revenue - Cost of Goods Sold (COGS)

Net Profit: Gross Profit - Expenses Marketing: The process of promoting and selling products or services. Effective marketing involves understanding your target market, developing a clear message, and using the right channels to reach your customers.

Marketing Strategies: Specific plans for how a business will reach its target market.

Examples include: Social Media Marketing: Using social media platforms like Facebook, Instagram, and TikTok to promote your business.

Word-of-Mouth Marketing: Encouraging customers to spread the word about your business to their friends and family.

Flyers and Posters: Distributing flyers and posters in your local community.

Local Advertising: Placing ads in local newspapers, radio stations, or community magazines.

Special Promotions: Offering discounts, coupons, or other incentives to attract customers.

Customer Service: The act of providing assistance and support to customers before, during, and after a purchase. Excellent customer service is essential for building customer loyalty and generating positive word-of-mouth.

Ethical Business Practices: Conducting business in a morally responsible and honest manner. This includes treating customers fairly, being transparent about your products and services, and respecting the environment and the community.

Worked example

Example 1: Identifying a Target Market

A Grade 9 learner wants to start a small business selling homemade atchar in their township.

Analysis: Atchar is a popular condiment in South Africa, particularly enjoyed in townships.

Target Market:

Demographics: People living in the township, aged 15-60 (broad range as many age groups enjoy atchar). Both male and female.

Psychographics: People who enjoy spicy food, are price-sensitive (as they likely have limited disposable income), and value convenience (buying atchar is easier than making it themselves).

Location: Specifically, the learner's township and surrounding areas.

Example 2: Calculating Profit

A learner makes and sells vetkoek at the local taxi rank. In a week, they sell 100 vetkoek at R5 each. The ingredients (flour, oil, yeast, etc.) cost R

2

0

0. Other expenses (transport, packaging) cost R

5

0. Revenue: 100 vetkoek x R5/vetkoek = R500

Cost of Goods Sold (COGS): R200 (ingredients)

Expenses: R50

Gross Profit: R500 - R200 = R300

Net Profit: R300 - R50 = R250