Junior Achievement 5.4

1. Junior Achievement 5.4 “The Cost of Doing Business”

2. Let’s review our vocabulary: • Job Responsibilities: • The specific tasks and duties associated with a particular job.

3. “ Success depends upon previous preparation, and without such preparation there is sure to be failure.” - Confucious

4. Do you agree with this statement? Why or why not?

5. How does being prepared for something help you to do your very best?

6. Today you will learn about how important it is to be prepared for all the costs of operating your business.

7. So what are the costs of doing business? (transparency 5-4a)

8. Now that you’ve had a chance to guess, let’s look at some of the costs of doing business :

9. Advertising: • The promotion of a product or service • Newspaper ads, television ads, radio ads, flyers, billboards

10. Health Care: • The prevention, treatment, and management of illness and the preservation of mental and physical well being. • Having your company pay for part of your doctor’s bills.

11. Philanthropy: • The effort to increase the well-being of humankind, as by charitable aid or donations. • Giving money to others who need it.

12. Professional Services; • Services offered by licensed professionals to support business operations. • Getting extra help from someone who is an expert.

13. Property Tax: • Tax assessed against a property by local governments. • Money you pay your city to take care things around your building, like roads and underground pipes and lines.

14. Recycling: • The act of processing used or abandoned materials for use in creating new products. • You pay people to reuse the things your business doesn’t want any more.

15. Rent: • Payment for the use of property. • You pay the owner of your building so you can use it for your business.

16. Salary: • A fixed payment regularly paid for worker services. • Money you pay to the people who work at your business. This is their paycheck.

17. Supplies: • Materials stored and used when needed. • The things you buy to do your job, like tools, and the things you buy to make and sell a product, like beads and string to make necklaces.

18. Utilities: • Businesses that provide a public service, such as electricity or phone services. • Money you have to pay to use the phones and power.

19. All these things are called your “Business Costs”. You need to list them and add them up to find out how much money you are going to need to run your business.

20. Let’s see how much it would cost City Hall to run their business. Turn to page 77 in your workbook.

21. Now it’s your turn to calculate the costs for your business. Please fill out the Business Costs Sheet in your Business Workbook.

22. As you are filling out your Business Costs, you will need each employee’s personal bank account number. Get this from your teacher and record it in the Business Costs Worksheet.

23. Now that you know how much money you need, how are you going to get it?

24. Have you ever borrowed money from a friend or family member?

25. Loan • In business, borrowing money is called getting a loan. • Your business gets this loan from a bank or credit union. • You have to promise to pay this money back.

26. Your business will apply for and receive a loan from one of our banks at the beginning of JA BizTown day.

27. Before the end of the day, you will need to repay your loan, plus interest, to the bank. • Remember what interest is? • Interest is the extra percentage that the bank charges to let you use their money.

28. Knowing how much you need to start your business is preparing to succeed. Congratulations! You’re on the road to success!

29. Please complete the Word Map on pages 78, 79, and 80 in your workbook.