TEACHER HOME
Business Plan Competition

Curriculum Information: Lesson Attachments:
Lesson 3: Concept Development
Time Required: Two class periods
  • Introduction
  • Topics
  • Objectives
  • Lesson Description
  • Materials
  • Procedure
  • Closure
  • Assessment
  • Extension Activity
    Back to Table of Contents Introduction

    Once individuals have undertaken a personal self-assessment and recognize their strengths and weaknesses as potential business owners, they must (1) choose the type of business they would like to start, (2) develop the business concept, and (3) evaluate whether or not the business concept is feasible. Choosing a business does not necessarily mean creating something totally new. Most new business ideas are actually not new at all; rather they are old ideas that have been repacked, many times with new technology. A good example is the cellular phone, an innovation with microchips and transmitting technology which allows the traditional telephone to become portable. This innovation, coupled with the increased pace of doing business world-wide, enables people to be in constant contact with their offices, suppliers, customers, etc., spawning a whole new industry.

    While many people see problems in meeting the needs of various consumer groups, successful entrepreneurs see solutions and, as a result, spot opportunities for creating new businesses. Ideas for business ventures can come from a variety of sources. Typically they arise from 1) past work experiences, 2) past education or training, 3) hobbies, talents or personal interests, or 4) recognition of an unmet need in the marketplace.

    While new business owners can create totally original enterprises, a greater number of individuals choose alternative routes, such as purchasing an existing business, buying a franchise, or taking over a family business. Regardless of the source, however, it is important to reiterate that the only reason for a business to exist is to satisfy a customers need.

    Back to Table of Contents Topics
    • Concept development
    • Evaluation of the business concept
    Back to Table of Contents Objectives
    • To explore a wide range of business opportunities
    • To develop a business concept
    • To evaluate the feasibility of the business concept
    Back to Table of Contents Lesson Description

    The purpose of this lesson is to help students select and evaluate a business for which they will later develop a business plan.

    Back to Table of Contents Materials
    • Activity 3-A: Business Concept Description
    • Activity 3-B: Evaluating the Business Concept
    • Visual 3-1: Main Sources of Business Start Up Ideas
    • Visual 3-2: Alternative Routes to Starting a Small Business
    • Visual 3-4: Ideas for Small Businesses
    Back to Table of Contents Procedure
    1. Tell the class that this lesson focuses on the selection and evaluation of the feasibility of a business for which they will write a business plan.

    2. Explain that choosing a business does not mean creating something totally new. Most business ideas are actually not new, but innovations on old ideas. Hold up the cellular phone as an example. Ask students to contribute other examples.

    3. Break students into small groups and give each group a mythical target market for an already existing product or service. Examples might include:

      • A computer business for senior citizens
      • A beauty shop for teens
      • A golf course for beginners
      • A miniature golf course for adults
      • A exercise center for senior citizens or young children

      Have each group determine how they might change the existing product to meet the target market. Then they should share their ideas with the class.

    4. Ask students what they think are the main sources of ideas for starting a business. List their responses on the board. After several minutes of discussion use Visual 3-1 to illustrate the most frequent sources of ideas.

    5. Using Visual 3-2, discuss the different routes an entrepreneur might take to start a business:

      • Starting a new business from scratch

          Several conditions might encourage the starting of a business from scratch: 1) a newly developed process, product or service has recently been inven ted or become available; 2) an ideal location has become available or 3) avoidance of undesirable procedures or consequences that might be present when purchasing an existing business.

      • Buying an existing business:

          An alternative to starting a business from scratch is to buy an existing business. In this case the new owner may continue to operate it as in the past, or he/she may introduce various changes in terms of product lines, policies, store layout, etc. Individuals pursuing this route may (1) reduce the uncertainties associated with starting a business from scratch, (2) acquire an operating business with established procedures and an existing market and (3) purchase the business at a bargain price, reducing the hidden costs generally as sociated with starting a business from scratch. Three types of existing businesses include:

      • Purchasing an existing business:

          Pizza shop, dental practice, beauty parlor, machine shop, real estate firm, etc.

      • Buying a franchise:

          Subway, Roto-Rooter, Cookie Bouquet, Kwik-Copy Printing, etc.

      • Entering a family business:

          Gaining current or future ownership, taking over a profit center, or starting a spin-off of the family business.

    6. Break the class into small groups of three or four. Using ideas from the community maps in Lesson 1 as well as the Yellow Pages, ask groups to locate several examples of retail, manufacturing and service businesses. When completed, ask each group to list the businesses on the board for each of the three categories. This can serve as pool from which student can think about a business they might choose for their business plan. Display Visual 3-3: Ideas for Small Business for additional ideas.

    7. Ask students to work in twos or threes to bounce ideas about possible business ventures off each other. During this time each student should make a decision regarding the business for which he/she will develop a business plan. Remind students that they do not need to start a business from scratch. Each student should then write a short description of his/her business concept.

    8. Hand out Activity 3-A: Developing Your Business Concept. Review the business concept and ask students whether their descriptions include all of the components. Have students further develop their concept by completing Sheet 3-A and then rewriting their concept into two or three paragraphs. This should be completed in class.

    9. Engage students in a discussion regarding how they might evaluate the feasibility of their selected business. List their suggestions on the board. Hand out Activity 3-2: How to Evaluate Your Business Idea. Students should complete the evaluation prior to the next class.

    Back to Table of Contents Closure

    Provide time for every students to share his or her business idea with the class. Ask them to explain why they think their ideas will work.

    Back to Table of Contents Assessment

    Students will submit a business concept development form along with a drawing of the exterior of their business establishment. Display the drawings with the concept development form around the classroom for students to examine. Assign students the evaluation of their business concept for the next class.

    Back to Table of Contents Extension Activity

    Have each student interview a local entrepreneur in a business that is the same or similar to the one he or she is proposing. They should ask the business owner why they selected that particular business, what they like and dislike about it, what problems they encountered over the course of owning the business, etc. Students could then report their findings to the rest of the class.
 
 
Tech Connect © 1999
2001 HTML version by Mike Gumpper
Pennsylvania Partnership for Economic Education and ECONOMICSPennsylvania
All Rights Reserved
Created: 5 June 1999, Modified:1/2001 and 1/2003