Unit 1 Introduction to Business

1. Unit 1 –
Introduction
to Business
L2 First Award in Business

2. What has been done? What are we doing this
year?
• Year 10 – completed unit 6 (you should know your results)
• Studied towards unit 2 finance exam (taking this end of September)
THIS YEAR …..........
• Year 11 – to complete unit 1 and unit 3.
- REMINDER – 4 UNITS in total and one GCSE grade equivalent.

4. RECAP.........Business Ownership –
Public/Private and Third Sector
Private sector
• Private sector organisations are owned by individuals. These businesses are driven by profit.
• The profit from private sector organisations benefits the owners, shareholders and investors.
• They are financed by private money from shareholders and by bank loans.
Public sector
• Public sector organisations are owned by the government. They provide goods and services for the benefit of
the community.
• They are run by the government. They operate with money raised from taxes.
Third sector
• Charities operate in the third sector
• Third sector organisations are owned and run voluntarily by trustees.
• These organisations are not run by the need to make profit but by the need to help the community.
• They operate with money from donations and gifts. Any profits are reinvested in the organisation.
• Third sector organisations can be run as a social enterprise.

7. For Profit Business (FP)
• FPs operate to MAKE A PROFIT.
• ‘Cash is King’
• The profit made by a business is distributed to the owners of the enterprise
• Business ownership can come in the form of shareholders, partnerships or
sole trading.
• Employees of For-Profit businesses are paid for their work.
• Businesses range in size from single employee organisations to huge,
multinational corporations employing thousands of people
30 Second challenge-
in pairs write down as
many different for profit
businesses as you can!

8. P1 and P2 –
Understanding
not for profit
business is
(NFP)
Businesses with charitable status are funded mainly by
donations, get some tax relief, and are eligible for certain types
of grant.
One example of a type of not-for-profit organisation is a charity.
Charities are businesses whose aim is to raise money for good
causes, or to help people, animals and the environment.
A not-for-profit organisation is a business that aims to do
something other than to make profit for the owners, such as
providing a public service or helping people. It needs to make
enough money to cover its costs, but any surplus is reinvested
into the business or used in other ways.

9. Over to you....
• Brainstorm as many
different charities you can
think of?
• What do they hope to
achieve?

10. Did you get these?

11. Social Enterprise
• Another type of not-for-profit organisation is a social enterprise, whose
aim to help society.
• Social enterprises make money by selling products or services like
a traditional for-profit business, but they use their profits to benefit
society.
• In other words, a social enterprise is a proper business that makes its
money in a socially responsible way. These ventures are not
necessarily formed to reinvest all profits into the communities. Social
entrepreneurs can make a good profit themselves. However, their
business model is also designed to benefit others.
-Some other examples of social enterprises include businesses such as
The Eden Project, The National Trust, The Big Issue, and Divine Chocolate.

12. Social Enterprise – CASE STUDY –
The Eden Project
• Watch the video carefully and write down -
• What The Eden Projects aims and objectives are.
• https://www.youtube.com/watch?v=f8unx8-pZxg
• What do you think is the core message of the Eden Project?

13. Setting up a Social Enterprise
• https://www.bbc.co.uk/bitesize/
articles/zjmkpg8
• Watch the video carefully and
think about what sort of skills it
would take to run a social
enterprise.
• How are their aims and
objectives different to a FP
business?

14. Key Terms you need to know......
• Alison runs a social enterprise, that’s a business with a social or environmental mission.
Lilypads reinvests money they make by selling their products back into the business; this is
helping communities in Kenya and the UK.
• If you want to set up a business that has social, charitable or community-based objectives, you
can set up as a:
• limited company
• charity, or from 2013, a charitable incorporated organisation
• co-operative
• community interest company (CIC)
• sole trader or business partnership.
• A community interest company (CIC) is a special kind of limited company which exists to
benefit the community rather than private shareholders. To set up a CIC, you need to apply
to Companies House. The CIC regulator has guidance on CICs, including the forms you
need to set one up.

15. Test – FP or NFP?
• Look through the different businesses on the screen carefully and in
your groups sort them into -
• FP
• NFP
• Extension – if you complete the task discuss what is different
between the businesses and what is similar.