CHAPTER 2

Question 1

The importance of entrepreneurs in South Africa

Answer 1

Entrepreneurs are primary creators and drivers of new business.
Entrepreneurship is a critical solution in South Africa for
– low economic growth
– high unemployment
– an unsatisfactory level of poverty

Question 2

Define the entrepreneurs within the entrepreneurial process

Answer 2

• potential
• intentional entrepreneurs
• start-up (early stage)
• establised entrepreneurs

Question 3

State the levels of entrepreneurail sophistication

Answer 3

• Basic survivalists have no economic independence and little involvement
  with other entrepreneurs within their social network (individualism).

• Pre-entrepreneurs follow the group’s initiative (collectivism).

• Subsistence entrepreneurs are self-employed and generate income
independently through a temporary market stall or stand.

• Micro-entrepreneurs have zero to nine employees, an operating licence
from a local authority, and a fixed workshop, office or other place of business.

• Small-scale entrepreneurs have 10 to 49 employ

Question 4

Name 12 characteristics and sucess factors of entrepreneurs

Answer 4

• Passion
• Locus of control
• Need for independence
• Need for achievement
• Risk taking and uncertainty
• Creativity and innovation
• Leadership
• Good human relationships
• Positive attitude
• Determination and persistence
• Persistent problem solving
• Commitment

Question 5

Name the managerial success factors

Answer 5

1. Planning. Business planning can take a variety of forms, from informal to
   preparing a formal document and/or a business plan.
2. Knowledge of competitors. Entrepreneurs know who their competitors are,
   what they are doing, and what the position of their business is compared to
   that of competitors.
3. Mainly market orientated. The products and services of a market-oriented
   entrepreneur are developed to meet the needs of the clients.
4. Client service. To ensure good client service, entrepreneurs usually have
   good relations with their employees and their clients
5. High-quality work enjoys priority. The client expects the quality of the
   product to be in line with the price charged.
6. Financial insight and management. To achieve the objectives of the
   business and the entrepreneur, sound financial principles must be applied.
7. Knowledge, skills and competencies with regard to the business.

Sufficient relevant experience and having the core competencies that have
been gained before starting one’s own business is one of the most important
determinants of success.

8. The use of experts. Successful entrepreneurs make use of experts inside
   and outside their business

Question 6

State the push and pull of entrepreneurship

Answer 6

The table

Question 7

Name the challenges faced by entrepreneirship in sme in South Africa

Answer 7

1 lack of start up and expansion finance
2 access to the market and gaining market credibility
3 access to appropriate technology
4 access to Human Resources

Question 8

What is the difference between entrepreneurs and inventors

Answer 8

• Inventors are not involved with day-to-day activities.
  – Inventor’s success depends on the number of inventions.
  – Entrepreneurs take the product/service to the market.
  – The entrepreneur focuses on the business instead of a singular
  product/service