This engaging lesson gives students the opportunity to identify risks and rewards of entrepreneurship and distinguish between entrepreneurs who start a business to produce a good or provide a service.

KEY CONCEPTS

Benefit, Business, Capital Resources, Consumers, Entrepreneur, Goal, Goods, Human Resources, Natural Resources, Opportunity Cost, Productive Resources, Risk, Services

STUDENTS WILL

  • Define an entrepreneur as a person who organizes and operates a business or businesses, taking on financial risk (purchase and use of resources, combining resources to produce goods or provide services) to run the business or businesses.
  • Identify risks and rewards of being an entrepreneur.
  • Distinguish between businesses that produce goods and those that provide services.

INTRODUCTION

businessAsk students:

What do you want to be when you grow up? Some of you may want to be a doctor, a banker, a teacher, or a pilot? Others may want to be your own boss and start a business that you think will be a great success!

This lesson will teach you about being an entrepreneur and looking at both the risks and rewards of starting your own business. Also, you will identify businesses that produce goods and businesses that provide services.

Are you ready? This lesson is "Open for Business!"

RESOURCES


PROCESS

Ask students if they have ever wanted something...really, really wanted it. [Answers may vary, but many will share they have.] Next, ask students if the thing they wanted was not something they could have immediately but was something that required them to set some goals to achieve. [Answers may vary, but many will share they have.]

Tell students that today a familiar book character, Arthur, will set a goal and accomplish that goal by starting a business.Tell students they will learn about the risks and rewards that have to be considered when starting a business.

Play aloud Arthur's Pet Business online at www.speakaboos.com/story/arthurs-pet-business/.

  • Ask students what Arthur's goal was in the story. [Arthur's goal was to get a puppy.]
  • What did Arthur's parents say would have to occur before he could get a puppy? [He would need to prove he was responsible.]
  • What did DW say was the best way to show he was responsible? [He should get a job.]
  • What were the first two job options suggested to Arthur? [He could work as a bank teller or at Joe's Junkyard.]
  • What did Francine suggest? [Arthur should do something he liked to do.]
  • The story tells us that Arthur then had an idea. What was his idea? [He decided to start his own pet sitting service because he liked pets. It would give him an opportunity to show he was responsible and do something he liked to do.]

Introduce the concept of entrepreneur to students. Define an entrepreneur as a person who is willing to take risks to start new businesses. Entrepreneurs  recognize opportunities, like working for themselves, and accept challenges.

  • Ask students what they think might be some risks an entrepreneur might take in starting a business. [Answers may vary, but examples of possible answers include: Entrepreneurs don't know if consumers would demand their product, they may have to work many hours, and it is up to them as to whether the business they start is successful.]
  • Ask students what they think might be some rewards an entrepreneur might enjoy in starting a business. [Answers may vary, but examples of possible answers include: Entrepreneurs get to select the business they begin, they can show they are responsible, they can earn a lot of money, and they can achieve personal goals.]

Entrepreneurs produce goods and provide services to satisfy consumers' wants. Remember that consumers are shoppers, those whose wants are satisfied by using goods and services. What are goods and services?

clothesGoods are things that people enjoy and use that can be touched, held, or used. Goods might include food, toys, books, clothes, electronics, bikes, and cars. Encourage students to identify other goods.

Services are actions that satisfy people's wants. Services might include mowing someone's lawn, washing someone's clothes, cutting someone's hair, or babysitting. Encourage students to name other examples of services.

Arthur was going to start a pet business. Would he be producing a good or providing a service? [a service] How did you know? [He was going to take care of others' pets by walking them, feeding them, giving them baths, and taking care of them.]

Entrepreneurship

  • Was the pet business a good risk for Arthur to take as he became an entrepreneur? [Answers may vary. Ask students to explain their thoughts.]
     
  • What service did Arthur provide for Perky? [Arthur brushed her, fixed her favorite foods, and took her on a lot of walks.]
     
  • What new pet did Arthur provide a service for on Thursday? [Cuddles, the boa constrictor]
     
  • At the end of the story, did Arthur achieve his goal? [Yes, he received a puppy thanks to his hard work and demonstrating responsibility.] Was his business successful? [The story doesn't tell us, but we assume so.]

Inputs and Outputs

  • When an entrepreneur has decided on a business to start, like Arthur, what do you think might need to be done next? [Answers will vary but may include: They must gather the resources necessary to run the business, they must convince consumers they want their good or service, and they need to advertise their business.]
     
  • What did Arthur do so consumers would know about his pet business? [He and Francine made a sign to advertise. His family helped, also.]

Incentives
(to running a business is customers and a good reputation)

  • What happened that increased Arthur's business? [Word got around about his business, and people began to share. Because of this, Arthur's business increased.]
     
  • Who was the first consumer to contact Arthur? [Mrs. Woods wanted Arthur to take care of her dog, Perky, while she was on vacation.]
     
  • On Monday, why did the MacMillans contacted Arthur. [They wanted Arthur to take care of their canary, Sunny.]
     
  • On Tuesday, which consumer contacted Arthur? [Prunella contacted Arthur to take care of her ant farm.]
     
  • Who was the next consumer interested in Arthur's business? [Brain wanted Arthur to take care of his frogs while he was on vacation.]

Costs and Benefits

  • Arthur realized one of the costs of running his own business when his friend Buster invited him to go to the movie on Saturday. What happened? [Arthur couldn't go with his friend because he had to clean the cages and feed all the pets.] An entrepreneur often has to work many long hours and often misses some fun things.  Ask students if they think an entrepreneur thinks the benefits outweigh the costs. [Answers will vary. Encourage students to explain their thoughts.]

Have CEE's Financial Fitness for Life 9-12 Exercise 5.1 have students complete the "Take the Test" activity.  Encourage students to share what type of business they would like to start and have them classify the business as one that produces a good or provides a service.

ASSESSMENT ACTIVITY

There are two assessment options:

  1. "Picturing Economics" (Students are encouraged to illustrate their understanding of economic concepts presented through this lesson by drawing or finding a picture in the newspaper or magazine to define that concept.)
     
  2. "Power Point Open Response"

Family/School Assessment Project: "Welcome to Entrepreneursville, U.S.A.!" Print out and send home the family/school project. Allow adequate time for families to work on the assessment. When students bring their entrepreneurship project to class, have each student share about the business he/she has chosen to start and whether that business produces a good or provides a service.

Assemble a class town of the businesses students chose to start.

CONCLUSION

Ask students to share what economic concepts they learned today. (Answers may include: petentrepreneurship, risks, rewards, business, consumer, goal, goods, services)

Review the concepts above by asking the following questions:

  1. What was Arthur's goal in the story? [He wanted to get a puppy.]
     
  2. What was his best idea on how to achieve his goal? [He decided to start his own pet business to show he was responsible.]
     
  3. If someone asked you what an entrepreneur does, what would you say? [An entrepreneur is someone who takes a risk to start a business.]
     
  4. Name one risk of being an entrepreneur. [Answers may vary, but examples of possible answers include: Entrepreneurs don't know if consumers will demand their product, they may have to work many hours, and it is up to them as to whether they start a business that is successful.]
     
  5. Name one reward an entrepreneur might enjoy in starting a business. [Answers may vary, but examples of possible answers include: Entrepreneurs get to select the business they begin, they can show they are responsible, and they can achieve personal goals.]
     
  6. Ask students to think of Arthur's Pet Business. Did Arthur produce a good or provide a service in his business? [Service] How do you know? [He fed, walked, and cared for pets.]
     
  7. If Arthur went to Pet Food Factory to buy food for his pets, would that business produce a good or provide a service? [good] Why? [The food is a good.]

Tell students to now click on the PowerPoint Quiz to review businesses that produce goods and provide services. When they read the store name, they need to determine if the business produces a good or provides a service. Students will click on the correct answer.

Ask students what they think might be some rewards an entrepreneur might enjoy in starting a business. (Answers may vary, but examples of possible answers include: Entrepreneurs get to select the business they begin, they can show they are responsible, and they can achieve personal goals.) 

Ask students what they think might be some rewards an entrepreneur might enjoy in starting a business. (Answers may vary, but examples of possible answers include: Entrepreneurs get to select the business they begin, they can show they are responsible, and they can achieve personal goals.) 

EXTENSION ACTIVITY

A. Great EconEdLink Lessons to Complement this Lesson:

B. Invite an entrepreneur to the classroom. Challenge students to identify risks and rewards of being an entrepreneur and whether the entrepreneur produces a good or provides a service.

C. Research a real life entrepreneur by visiting your library and Internet locating some nonfiction books about entrepreneurs. Ask students to present an oral report or write a summary about the entrepreneur, identify the risks and rewards the entrepreneur encountered, whether the entrepreneur produced a good or provided a service and whether the entrepreneur reached his or her personal goals.

EDUCATOR REVIEWS

  • “I liked the lesson. The students were engaged and it's an important 4th grade concept to tie into incentives.”

    Jean A., Lakewood, CO   POSTED ON October 5, 2014

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