LESSON 9 Business

Simulation
Introduction

Business simulations are a hands-on, interactive learning experience

that allow participants to truly engage in the material. Instead of focusing on
theoretical knowledge like in a typical classroom, participants build skills,
improve conceptual knowledge, and gain a big picture view of the
organization all at once. There are many benefits to using business
simulations in your company, including:
• Imitates Reality. Our simulations emulate the real-world factors and
challenges that your organization faces. Give your people a big-picture
view of operations by scaling everything down to a smaller scale.
• Risk-free environment. Your people will be able to learn from their
mistakes in a safe environment and see the consequences of their
actions across the whole organization – without actually affecting your
organization.
• Stimulates co-operation. Working in cross-functional teams
stimulates conversation and co-operation between colleagues. These
conversations create peer-to-peer learning, and open up your people
to better understand the different perspectives in your organization.
• Learning by doing. It is said that we remember 10% of what we read,
20% of what we hear, 70% of what we discuss with others, and 80% of
personally experience. A business simulation allows your people to
personally experience the consequences of all the different aspects of
business.
• Engages learners. Experiential, hands-on learning engages all the
senses. Participants visualize, discuss, plan, receive feedback, and
practice real techniques that they will use in the workplace.

• Accelerated learning. A simulation provides a big picture view of

operations, meaning that participants are able to grasp a wide range
of concepts and materials in a short period of time. By relating their
new learnings back to their own company, stickiness increases and
the knowledge follows back to the workplace.

Content

Starting a business is about more than getting an idea going. Rather,

there are many practical concerns in running a business that must be
considered. The more you understand the steps involved in starting a
business, the better the decisions and preparations you will be able to make.

STARTING A BUSINESS

Starting a business is a dream for many, but it is more than just doing what
you love. There also are many practical concerns, which include legal
responsibilities, business structure and tax liabilities imposed by that
structure.

EVALUATE YOUR IDEA

 Evaluate the potential of your business idea. The fact is, not all business
ideas are profitable, and not all business ideas can generate a sustainable
profit. For example, you may want to make designer soaps and sell them
locally, but if you live in a very low population area, the cost of goods sold
and the minimum income needed to remain in business might be too high in
comparison to expected sales. In addition, you may have a great idea, but do
you really want to be the one to execute the idea? Some people are
entrepreneurs (those who start businesses) and some are managers (those
who run businesses), but few are both. Make sure your idea plays to your
strengths.

PLAN YOUR BUSINESS

Spend time researching your business idea, its industry and customers. If
you are unsure how to plan a business, seek out assistance. The U.S.
government sponsors free counseling through the Small Business
Administration (SBA). In addition, the Service Corps of
Retired Executives (SCORE) provides free business counseling services.
Take the time to develop a plan, and put into writing exactly what you intend
to do, why you intend to do that way and what you expect the results to be.

FIND FINANCING

Securing financing for your business. Spend time estimating the startup
costs, operating costs until a sustainable profit is reached and how your
financing needs coincide with your business plan. All sources of financing
are not the same. Some are easier to get than others, and some cost more in
the long run than others. In addition, some forms of financing have
maintenance requirements. Further, some financing sources also may offer
business guidance (e.g. Angel investors). Do your homework and find
financing that works best for you and your business.

GET LEGAL

Make sure that you are in full compliance with federal, state and local laws.
Determine the legal structure of your business, register the legal name of
your business, file for a federal tax identification number, obtain the
necessary licenses and permits, and register for state and local taxes. Your
SBA or SCORE counselor can help. Alternatively, obtain information on the
legal aspects of doing business from an attorney, an accountant and a local
circuit court clerk.

Key Concept
A business simulation is a powerful tool for organizational learning
and development. Business simulations enable your people to align your people
on strategy, improve their business acumen and business finance skills, and
ultimately improve your bottom line.