51 BUSINESS INVESTMENT OPPORTUNITIES Lesson DVD by monkey6

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51 BUSINESS INVESTMENT OPPORTUNITIES Lesson DVD

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									BUSINESS INVESTMENT OPPORTUNITIES
Learning Outcomes and Assessment Standards
Learning Outcome 2: Business Ventures The learner is able to identify and research viable business opportunities and to explore these and related issues through the creation of achievable business ventures. We know this when the learner is able to: • Investigate a range of available business investment opportunities, distinguish between assurance and insurance (both compulsory and non-compulsory), and discuss the viability and relevance of these to both individuals and businesses.

Lesson

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Overview
In this lesson you will:
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Explore important concepts Identify an investment opportunity Investigate wise investment opportunities.

Prior knowledge
In Grade 10 you identified possible business opportunities (based on researched needs and wants) and in Grade 11 you examined starting a business venture based on an action plan.

Lesson part 1
Introduction
Relevant business information will enable owners and management to make important decisions on different investment and growth opportunities.

DVD

Important terms
What is investment? When an investment in a business is made, it can be for the following reasons:
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Starting a new business – a new business venture The formation of capital – purchasing additional fixed assets (machinery etc.) Expanding the business – produce more products Increase in profits – increase in sales Maintaining profits – keep at least the same level than before.

What is interest? Interest is money charged or paid for the use of money. What are shares & dividends?
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Shares – buying ownership in a company Dividends – a portion of the business’s profit, after tax, divided between the shareholders.

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What is a portfolio? A portfolio is a “basket” or combination of different types of shares and different types of investments.

Identifying a business opportunity
The business owner needs to ask the following questions when identifying a potential business opportunity:
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How will I invest?

What is the process that the business owner needs to follow when he wants to invest in the business?
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When should I invest? Why should I invest? Where should I invest?

When is the best time to make the investment?
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What is the purpose of my investment?
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What company/investment provides the best return on my investment?

Wise business investment opportunities
Making wise investment decisions is essential for the success and the growth of the business. An investor needs to follow the following procedure to stay on track. 1. Do a needs analysis: The financial specialist/financial broker has to do a needs analysis to determine the potential investor’s requirements and the purpose of the investment. The following issues need to be considered:
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Must the money grow or would the investor prefer to draw a monthly income? For how long does the investor want to invest the money? How much risk is the investor willing to take?

If the risk of an investment is low, the return on the investment is also low. If the risk on an investment is high, the return on the investment is also high.

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2.

Put together a portfolio: When one sets up a portfolio, you need to keep the following in mind:
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Choose different types of investments with different levels of risk. Keep enough cash aside for unforseen events. Keep track of inflation Consider the effect of compound interest. One needs to read a lot and do thorough research before you make the investment. Make use of a financial specialist/broker for the necessary advice and guidance.

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Follow these recommendations:
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Activity 1
You have won one million rand in the lottery. Discuss in your pairs/groups how you will invest this money and what wise investment decisions you need to make. You may talk to a financial agent/broker for the necessary guidance and advice. Present you investment plan to the rest of the class by using a combination of verbal and non-verbal communication methods.

PAIRS GROUPS
self assessment

Conclusion
Businesses invest capital for various reasons, but mainly for making more money and expanding the business. It is very important that wise business decisions are made to make a successful investment. In the following lesson you will investigate assurance and insurance.

formative assessment

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