BizWorld Week 2

BizWorld

Ben Franklin Intermediate SchoolBen Franklin Intermediate School

Week 2 – Tuesday, March 2nd

Spring 2010

Production and Presentation by Mr. Tong and Mr. Limon

1• Critical Thinking • Communication • Teamwork • Leadership • Innovation • Professionalism • Ethics

Ben Franklin Intermediate School

Review

ReviewWhat is a Business?

• A business is a sole proprietor, partnership, or corporation that creates and sells a product or service.

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Performance

sells a product or service.

• Examples of a business

Product Services

Lemonade Stand Haircut Parlor

Candy Store Auto Repair Shop

Apple Ebay

• A business can sell a product, defined as something produced by humans or machines or produced by a natural process Products are tangible

Genentech Morgan Stanley

or machines or produced by a natural process. Products are tangible.

• A business can also sell a service, defined as work done for others as an occupation or a business. Services are not tangible.



Review

ReviewThe Profit Equation

• PROFIT = Revenue - Expenses

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Performance

• Revenue is the money a company receives from selling a product or service.

− For example, Delrich’s Shoe Factory sells the “Nike Zoom Kobe V” for $100. Vincent pays Delrich $100 in credit for the shoe so he can wear it to school tomorrow, and Delrich recognizes the $100 as revenue.

• Expense is the cost associated with operating a business.

− For example, Kenesha’s Forever 16 sells dresses. She hires Juan, S $10Sabrina and Patricia to make the dresses and pays each one $10 per hour. She also has to pay Marvin for the fabric in order to make the dress and Mr. Limon for the space where she sells the dresses.

− Salary is the money paid to someone for the work they do.

− Rent is the money paid to use or occupy a space.



Review

ReviewThe Profit Equation (Cont’d)

• To profit, a business must sell a product or service for more than it costs to produce. If NOT, the result can be a loss. A loss occurs when expenses

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Performance

produce. If NOT, the result can be a loss. A loss occurs when expenses exceed revenue.

• Delrich Shoe Factory (February 2010)

− Revenue

− Price: $100 for each “Kobe Zoom V”

− Quantity: 10 “Kobe Zoom V” shoes

− Revenue = Price x Quantity = $100 x 10 = $1,000e e ue ce Qua t ty $ 00 0 $ ,000

− Expenses

− Salary: Joseph demands $10 per hour for 20 hours = $200

− Rent: Mr Limon’s classroom = $1 per day (28 days in Feb) = $28Rent: Mr. Limon s classroom = $1 per day (28 days in Feb) = $28

− Raw Materials: Rubber costs $2 per shoe, produced 20 shoes = $40

− Expenses = Salary + Rent + Raw Materials = $200 + $28 + 40 = $268

Profit = Revenue Expenses = $1 000 $268 = $732



• Profit = Revenue – Expenses = $1,000 - $268 = $732

Review

ReviewCompany of the Week

T l M t INew Topics

Performance

• Tesla Motors, Inc.

• Private Company (Founded in 2003)

• Headquarters – Palo Alto, CA

• CEO – Elon Musk (Age 38)

• Design, manufacture and sells high-performance fully electric vehicles andadvanced electric vehicle powertrainad a ced e ect c e c e po e t acomponents.

• First and only company to commerciallyproduce a federally-compliant highway-capable electric vehicle the Teslacapable electric vehicle, the TeslaRoadster.

• The Tesla Roadster can accelerate fromzero to 60 MPH in 3.9 seconds, but



produces zero tailpipe emissions.

Review

ReviewCompany of the Week (Cont’d)

C Fi i lNew Topics

Performance

• Company Financials

($ in 000s)

2008 2009 (9 mos)Revenue $14,742 $93,358

Cost of Sales 15,883 85,604

Gross Profit (1,141) 7,754Gross Margin N.M. 8.3%

R&D 53,714 11,139

SG&A 23,649 25,587

Total Operating Expenses 77 363 36 726Total Operating Expenses 77,363 36,726

Net Income (82,782) (31,498)

Net Income as % of Revenue N.M. N.M.



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ReviewThe Entrepreneurial Cycle

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Performance



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ReviewThe Entrepreneurial Cycle (Cont’d)

• There are four major components of running a company

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Performance

1) Design

2) Manufacturing

3) Marketing

4) Sales

• In each of the four parts, companies must record their revenue and expenses to make they are on track to make a profit



Performance

ReviewCharacteristics of a Good Company (10 minutes)

• Pair up with the person sitting next to you

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Performance

• Discuss how companies give back to their communities

• Companies do not just make money, they also do the following…

• Write a list of 10 items

1) Provide jobs



Performance

ReviewCharacteristics of a Good Company

• Good companies make quality products or provide quality services

G d i id h lth k i tNew Topics

Performance

• Good companies provide a healthy work environment

• Good companies treat their employees well

• Good companies benefit their community

• Good companies demonstrate good business ethics

• Ethics are the rules or standards governing the conduct of a person or the members of a profession

F l D l i h k J h t id f i• For example Delrich makes sure Joseph gets paid a fair wage or Kenesha makes sure she protects the privacy of her customers.



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ReviewJobs in the Corporation

• Chief Executive Officer (CEO) – is responsible for leading the team and managing the smooth operation of the company and it’s employees.

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Performance

managing the smooth operation of the company and it s employees.

Motto: “Be reasonable”

Chief Executive Officer

Chief Financial Officer

Chi f O ti OffiChief Operating Officer

SVP of Sales

SVP of Marketing

SVP of ManufacturingSVP of Manufacturing

Andrea Jung, CEO, Avon



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• Chief Financial Officer (CFO) – is focused on leading the team in making sure all money is accounted for and the company is making a profit

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Performance

sure all money is accounted for and the company is making a profit

Motto: “Low cost, high price”




SVP of Sales

SVP of Marketing


Thomas Tippl, CFO, Activision Blizzard



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• Chief Operating Officer (COO) – is responsible for managing the company's day-to-day operations; for your friendship bracelet company, the

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Performance

company s day to day operations; for your friendship bracelet company, the COO is focused on leading the team in creating a quality product and an attractive design that will appeal to customers



Chi f O ti Offi

Motto: “if you build it, they will come”

Chief Operating Officer

SVP of Sales

SVP of Marketing


Ralph Alvarez, COO, McDonald’s



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• Senior Vice President of Sales – is focused on leading the team in making customers happy and selling a lot of products.

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Performance

customers happy and selling a lot of products.

Motto: “Sell, sell, sell”




SVP of Sales

SVP of Marketing


Shari Friedman, SVP of Sales, MySpace



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• Senior Vice President of Marketing – is focused on leading the team in promoting the company, product or service

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Performance

promoting the company, product or service

Motto: “Make it look good”




SVP of Sales

SVP of Marketing


Philip Schiller, SVP of Marketing, Apple



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• Senior Vice President of Manufacturing – is focused on leading the team in making the product as easily and inexpensively as possible.

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Performance

in making the product as easily and inexpensively as possible.

Motto: “Just make’em and ship’em out”




SVP of Sales

SVP of Marketing


Rogelio Velasco, SVP of Manufacturing, Cisco Systems



Performance

ReviewJob Application (10 minutes)

• Turn to Page S7 of your packet - BizWorld Memo 3

C l t th A li ti f E l tNew Topics

Performance

• Complete the Application for Employment



Performance

ReviewAssigning Jobs

• Discuss the Application for Employment with your team

D id h ill t k h j b i thNew Topics

Performance

• Decide who will take on each job in the company

• Turn to Page C1-C2 of the Company Packet – Job Cards

• Neatly print your name on the top line and cut out the name tag



Performance

ReviewBusiness Contract

• Turn to page C3 of the Company Packet – Business Contract

Thi t t hi hli ht d f d t d iti f t d tNew Topics

Performance

• This contract highlights a code of conduct and recognition of student responsibilities as employees

• Please read, sign and date the contract



Performance

ReviewCompany Name (10-15 minutes)

• Brainstorm with your team about the name of your company

Wh t' i ? A l t h it t ll b iNew Topics

Performance

• What's in a company name? A lot, when it comes to small-business success. The right name can make your company the talk of the town; the wrong one can doom it to obscurity and failure.

• What does your Company name mean?

• Best Company Names of All Time – INC.com

1) Amazon 6) Yelp

2) Jet Blue 7) Twine) Jet ue ) e

3) Twitter 8) Oracle

4) Etsy 9) Etsy

5) Starbucks 10) Stub Hub5) Starbucks 10) Stub Hub



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ReviewNext Week

• Incorporate

W iti B i PlNew Topics

Performance

• Writing a Business Plan

• Raising Capital

• Guest Speaker – Mimi Kwan, Channel 7 – KGO TV

