TOPIC TITLE LESSON TITLE Topic 5 Operations Management

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TOPIC TITLE: LESSON TITLE: Topic 5: Operations Management Types of Business Costs COMPETENCY FOCUS:

TOPIC TITLE: LESSON TITLE: Topic 5: Operations Management Types of Business Costs COMPETENCY FOCUS: Key Skills (L 5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO 1) To define the term costs (Gui) LO 2) To distinguish between start-up costs and operating costs (Reg-Str) LO 3) To provide examples of start-up and operating costs in a given business scenario. Extension: LO 4) To analyse the importance of managing costs for a business (Str-Adv)

Define… What is a ‘cost’? Discuss in pairs…

Define… What is a ‘cost’? Discuss in pairs…

Types of Business Costs: Start-up costs Operating Costs Fixed Costs Variable Costs

Types of Business Costs: Start-up costs Operating Costs Fixed Costs Variable Costs

Start-up Costs All of the money that needs to be spent on setting up

Start-up Costs All of the money that needs to be spent on setting up a new business and getting it off the ground (one-off). For example: buying new equipment, buying or renting the property, buying new stock to sell. Imagine you have just set up a shop selling sportswear at Merry Hill. What start-up costs would you expect?

Start-up Costs Key decisions to be made when starting a new business: - How

Start-up Costs Key decisions to be made when starting a new business: - How much money does the business need? When does the business need the money? How much money does the business need? Does the owner have any security to offer to get a bank loan like their house?

Operating Costs • Sometimes called ‘expenses’ • All the costs incurred by a business

Operating Costs • Sometimes called ‘expenses’ • All the costs incurred by a business when it is fully up and running. These are broken down in to fixed costs and variable costs.

Operating Costs Examples of operating (running) costs: • E. g. Wages/Salaries • • •

Operating Costs Examples of operating (running) costs: • E. g. Wages/Salaries • • •

Task 1 For your own business that you set up in Unit 1, produce

Task 1 For your own business that you set up in Unit 1, produce a table with all of your startup costs and operating costs. Start-up Costs [15 mins] Operating (Running) Costs

Task 2 Start-up or Running Cost? http: //www. businessstudiesonline. co. uk/live/i ndex. php? option=com_content&view=article

Task 2 Start-up or Running Cost? http: //www. businessstudiesonline. co. uk/live/i ndex. php? option=com_content&view=article &id=35&Itemid=23

Task 3 Produce a revision poster on start-up and operating costs. [30 mins]

Task 3 Produce a revision poster on start-up and operating costs. [30 mins]

Start-up or Operating Cost? Move to the correct side of the classroom: Start-up Cost

Start-up or Operating Cost? Move to the correct side of the classroom: Start-up Cost Operating Cost