Plan a Small Business

Overview

Students use a simple business budget to calculate start-up costs, income, expenses and profit. They apply financial information to decide whether a small business should proceed, building on prior learning about consumers, businesses and financial decision-making.

Learning intentions

Students will:

• calculate total start-up costs and income
• calculate profit or loss using simple formulas
• distinguish between start-up costs, expenses, revenue and profit
• use financial information to make an informed business decision

Success criteria

• I can calculate total start-up costs.
• I can calculate income or revenue.
• I can calculate profit using a simple formula.
• I can explain whether my business will make a profit or loss and justify my decision.

Curriculum links

• Develop and evaluate a response to an economic and business issue using cost-benefit analysis or criteria to decide on a course of action.
• Interpret information and data to explain economic and business issues and predict financial impacts.
• Create explanations and arguments using economic and business knowledge, concepts, terms and research findings.
• Explain how consumers, businesses, the financial sector and government are interdependent in economic decision-making.

Lesson structure (27 minutes)

1. 0–3 min · Hook and prior knowledge. Display the question, “Would you spend $100 to start a business if you were not sure you would get it back?” using the opening business decision slide. Students make a quick yes/no choice, then explain one financial factor that influenced them.

2. 3–8 min · Explicit teaching. Use the financial terms and formulas slides and the whiteboard to define:

• start-up costs: one-off costs needed to begin
• income or revenue: money received from sales
• expenses: ongoing costs of operating
• profit: income minus total costs
• budget: a plan for expected income and expenses Model the formulas: Total start-up costs = add all one-off costs Income = selling price × number sold Total costs = start-up costs + expenses Profit or loss = income − total costs Students record the terms and formulas on their worksheet.

3. 8–12 min · Teacher modelling and worked example. Present the example business, “Fresh Fruit Cups”, through the worked example slides and complete the example budget on the whiteboard. Start-up costs are $40 for a table sign, $25 for containers and $15 for a cooler, giving $80. If 30 cups sell for $5 each, income is $150. With $30 in fruit and $10 in ice as expenses, total costs are $120, so profit is $30. Students calculate each figure with the teacher and explain why the business makes a profit.

4. 12–18 min · Guided practice. Distribute the business budget calculation worksheet. Students work in pairs on a new business scenario, using calculators if needed. The teacher prompts students to identify one-off costs, ongoing expenses, selling price, number sold, total income, total costs and profit or loss. Pause halfway for students to compare their first calculations with another pair.

5. 18–24 min · Independent practice and decision. Students complete the final scenario independently on the business budget calculation worksheet. They calculate the total start-up costs, income, expenses, total costs and profit or loss, then answer: “Should this business proceed?” Students must justify their response using at least two financial figures and one consideration such as risk, ability to pay, demand or opportunity cost. Early finishers calculate how many products must be sold to cover total costs.

6. 24–27 min · Plenary and assessment. Use the review and exit-question slide to revisit the formulas. Students complete a verbal check: “If income is $200 and total costs are $145, the business makes a ___ of $___.” They then submit the worksheet, including a one-sentence explanation of whether their business should proceed.

Resources

• the financial planning slide deck
• the business budget calculation worksheet
• Calculators
• Whiteboard and markers
• Example business budget
• Student exercise books and pens

Assessment

• During modelling, check that students correctly classify start-up costs, income and expenses, and use questioning to identify misconceptions.
• During guided practice, circulate and check calculations for total costs, income and profit; provide immediate correction where students add income and costs incorrectly.
• Collect the completed worksheet and review the final decision, calculations and justification against the success criteria.

Differentiation

• Provide a formula strip, highlighted figures and a partially completed budget for students requiring support. Pair students strategically and allow calculator use.
• Use a worked example on the board throughout the guided task and read each scenario aloud for students with literacy or processing needs.
• Support EAL students with the displayed terms, icons or examples beside each definition and sentence starters such as, “The business should proceed because…” and “The main financial risk is…”.
• Extend confident students by asking them to calculate the break-even number of products or explain the opportunity cost of spending the start-up money on a different business idea.