Entrepreneur
Give one function of an Entrepreneur
• Conceptualizing
• Planning
• Accessing funds
• Organizing
• Operating
• Evaluate the performance of a business
Give one reason someone may want to establish a business
(a) desire for financial independence;
(b) self-fulfilment;
(c) self-actualisation;
(d) increased income; and,
(e) increased control of working life.
There are two main types of data.
They are?
Primary and Secondary Data
Give one factor a business may consider when choosing a location to set up
(a) geographical; (b) availability of raw materials and supplies; (c) infrastructure; (d) power and water; (e) telecommunications; (f) transport; (g) health facilities; (h) labour supply; and, (i) governmental regulation
Give 2 characteristics of an Entrepreneur
(a) creative;
(b) innovative;
(c) flexible;
(d) goal-oriented;
(e) persistent;
(f) persevering;
(g) propensity to take calculated risks
An entrepreneur should do research before starting a business.
Why is research important?
The entrepreneur gets information about what the potential customers want, the prices of supplies from potential suppliers and the level of competition they will get from potential rivals
This will help realize the potential market’s interest and will help to:
• Understand customers’ needs
• Identify potential problems with the product or service
• Lower risk of making losses by helping business make better decisions
• Set goals that can guide the business
Give 2 examples of Primary Data sources
• Interviews
• Questionnaires
• Polls
• Surveys
• Emails to researcher
• Letters to researcher
What is a Short Term Plan?
Short term plans are created on a daily, weekly and monthly basis. Short-term goals are specific objectives that your company aims to reach over several weeks, or months, and no more than one year.
What does the function "Organizing" mean in relation to an Entrepreneur
Organizing
Entrepreneurs need to bring the factors of production together (Capital, Enterprise, Land and Labour), and allocate the resources to produce goods or render a particular service
An individual may want to start a business to be financially independent.
What does this mean?
Financial Independence If you are financially independent, you are responsible obtaining your own finances. A financially independent person does not rely on another for their income, but earns income for themselves.
The entrepreneur is not dependent on any wage or salary to cover life’s expenses.
For example, by starting a business, an entrepreneur does not have to wait for an employer to pay them, but they earn income from the operation of their own business. This therefore mean that they are in control of the level of income they earn
What is a feasibility study?
Feasibility studies help determine the viability of a business venture by identifying the factors that can lead to its success.
The study also shows the potential return (profits) on investment and any chances of making losses
Give 3 examples of sources of finance for an entrepreneur
Bank/Financial Institution
Family
Savings
An Entrepreneur must have the "Propensity to Take Calculated Risks"
What does this mean?
Propensity to take calculated risks
Calculated risk in business is defined as a carefully considered decision that exposes a person to a degree of personal and financial risk that is counterbalanced by a reasonable possibility of benefit or profit.
This therefore means that an entrepreneur must be able to weigh the potential to make a loss versus the potential to make a profit and then make a wise decision.
If the entrepreneur succeeds, they reap the reward. But if they lose, they bear the burden of the loss
What is a business plan?
A business plan is a document that explains how a business operates. The outline of the goals, objectives, and how the business intends to achieve them.
What is Secondary data?
Give 2 examples
Secondary data is the data that has been collected in the past by someone else but made available for others to use.
They are usually once primary data but become secondary when used by a third party. Secondary data are usually easily accessible to researchers and individuals because they are mostly shared publicly.
Examples of Secondary data include: • Census data • Records • Books • Journals • Magazines • Newspaper reports • Videos • Blogs/Vlogs • Social Media reports
What is Collateral?
Collateral is any asset a business uses to secure a loan. Most types of business loans require businesses to put up collateral in order to receive funding.
Put simply, collateral is an item of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms
How can an Entrepreneur contribute to Nation Building?
Contributing to nation building
A business plan has several elements.
One of them is the Executive Summary.
Describe the Executive Summary
Executive Summary
The executive summary is a brief overview of the key features within the business plan. It summarizes the detailed business plan into a page or two.
After reading the executive summary, an individual should have a fair understanding of the nature of business, how it will operate and how it will be profitable.
Why is a feasibility study important?
Reasons why a feasibility study is important:
(a) To ascertain the viability. Feasibility studies can also provide a business important information that could prevent them from entering into a bad or risky business venture.
For example, the study can show that persons within a certain age group are no longer interested in reading paperback books, but prefer eBooks or digital books. This will then help the author decide whether it is a bad idea to produce many physical copies.
(b) The possible costs attached to the project. A feasibility study will outline the likely costs associated with the beginning of a project.
Such a project may include for example, the launching of a new product, or the opening of a new branch location. As such, the feasibility study will let the business know whether such a venture is affordable or may be too costly for the business.
(c) Possible sources of finance. Feasibility studies help entrepreneurs to determine how much money they will need to start the business or to create a new product.
Additionally, they can allow potential investors and banks to see the chances of success that the business will have. This can then lead to the business getting the required funding if the feasibility study is positive
Some businesses choose to set up in a location that has favourable Government Regulation.
Explain what this means
Governmental Regulation
Government regulations in relation to business often relates to taxes and fines for breach of environmental policies.
Therefore, businesses often set up in countries where taxes are cheaper and where the penalty for breaching laws are not as severe or where no penalty exists.
For example, some businesses set up in poorer countries where there is no minimum wage, or where the tax rate is very low