Understanding Profit

Lesson Overview

Year Group: Year 5
Subject: Business Studies
Unit: Understanding Needs & Profits (Lesson 4 of 8)
Lesson Title: The Concept of Profit
Duration: 60 minutes
Class Size: 25 students
Curriculum Area: Social Sciences – Level 3
Big Idea: Businesses must make a profit to survive and grow.
Key Competencies: Thinking, Using language, symbols and texts, Managing self

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Learning Objectives

By the end of this lesson, students will be able to:

1. Define profit and explain why it is important for a business.
2. Calculate profit using a simple formula.
3. Analyse a hypothetical business scenario to determine profit or loss.
4. Discuss how businesses use profit to grow or improve their services.

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Lesson Structure

1. Introduction – Engaging the Learners (10 minutes)

• Class Discussion: Ask students, “Do all businesses make money? What happens if a business spends more than it earns?”

• Explain the Key Concept: Introduce the formula for profit:

  Profit = Revenue (money earned) – Expenses (money spent)

• Real-World Example: Use a local New Zealand business they may be familiar with (e.g., Pak’nSave, The Warehouse, a dairy) and discuss how they make money.

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2. Guided Learning – Understanding the Concept (15 minutes)

• Scenario Discussion: Present a simple example:

  “Mary runs a lemonade stand. She spends $10 on ingredients and sells cups of lemonade for a total of $25. How much profit does she make?”

• Step-by-Step Calculation: Work through the example as a class on the whiteboard.

• Introduce the Concept of Loss:

  “What if Mary spent $10, but only made $5? What does that mean for her business?”

• Quick Think-Pair-Share: Students discuss in pairs what businesses can do if they're not making a profit.

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3. Hands-On Activity – Profit Game (20 minutes)

Activity: Business Budget Challenge

• Small Group Work (5 per group): Each group runs a pretend “mini business” selling handmade bookmarks.
• Each team starts with $15 as their initial budget.
• They must decide how much to spend on materials (paper, stickers, markers).
• They "sell" each bookmark for a set price ($2 each).
• At the end, they calculate their total revenue, subtract expenses, and find their profit or loss.
• Group Reflection: Each team shares their profit and explains why they had a profit or loss.

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4. Reflection & Wrap-Up – Applying the Learning (15 minutes)

• Think-Pair-Share:

  • Why is profit important for businesses?
  • What would they do with their profit if they owned the mini business?
  • How can businesses ensure they don’t make a loss?

• Exit Ticket Activity:

  • Each student writes one thing they learned about profit on a sticky note and places it on a “Profit Wall” before they leave.

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Assessment & Success Criteria

✅ Can students accurately calculate profit and loss?
✅ Do students understand why businesses need profit?
✅ Can students reflect on how choices affect business success?
✅ Were students engaged in the simulation and able to apply their learning?

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Resources Needed

• Whiteboard & markers
• Pretend money
• Bookmark making supplies (paper, markers, stickers)
• Sticky notes for Exit Ticket

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Teacher Reflection

• Did students grasp the concept of profit?
• Were students actively involved in the hands-on activity?
• How can this lesson be improved for next time?

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Next Lesson Preview: Lesson 5 – How Businesses Use Profits

Next, we explore how businesses reinvest profits for growth, new products, and community contributions.

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Wow your students with this hands-on and interactive approach to business – they’ll never look at pocket money the same way again! 🚀