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POB note For Exam Flashcards

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1
Q

What is the definition of an entrepreneur?

A

An entrepreneur is a person who accepts the responsibility of providing products to consumers with the aim of making profit. The entrepreneur makes the initial investment in the business to realize a business idea. He or she bears the risk associated with failure and the successes of the venture.

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2
Q

What are the functions of an entrepreneur?

A

The functions of an entrepreneur include:
1. Conceptualizing or devising the business idea.
2. Planning the goals of the business in the long term (strategic), medium term (tactical), and short term (operational).
3. Accessing funding from various sources such as self, family, bank loan, government agencies, and credit unions.
4. Organizing the resources of the business to achieve the organizational goals, such as allocating resources, defining job responsibilities, and reporting relationships.

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3
Q

What is decision-making?

A

Decision making can be described as a process where the decision maker selects a particular option from possible alternatives to achieve a particular goal.

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4
Q

What are the steps in the decision-making process?

A
  1. Define the problem or issue
  2. Collect data and information
  3. Arrive at possible options and weigh options
  4. Choose the best course of action
  5. Plan and implement option
  6. Follow up on action taken
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5
Q

What decisions must an entrepreneur make in the decision-making process?

A

An entrepreneur must determine:
- What to produce
- How much to produce
- Methods of production
- Where to locate production

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6
Q

How does decision-making affect an entrepreneur’s business?

A

The entrepreneur will have to make different decisions every day in the operation of the business, some of which will affect the entire organization.

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7
Q

What is the role of the entrepreneur in economic development?

A

The entrepreneur plays a crucial role in economic development by making decisions that allocate factors of production and other input factors to produce goods and services.

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8
Q

What is the role of entrepreneurs in economic development?

A

Entrepreneurs use their acceptance of risk to invest in resources and set up ventures, leading to wealth and capital creation.

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9
Q

How do entrepreneurs contribute to employment?

A

They create employment opportunities in businesses, aiding in reducing the unemployment rate.

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10
Q

What type of linkages can entrepreneurs encourage?

A

Entrepreneurs can encourage backward and forward linkages among businesses.

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11
Q

Can you provide an example of business linkages?

A

An example is providing specialized machinery for firms in the construction sector or landscaping services to government agencies.

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12
Q

How do entrepreneurs promote exports?

A

They promote the export of locally made products using local raw materials, such as processing fruits and vegetables into condiments.

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13
Q

What impact do entrepreneurs have on GDP and per capita income?

A

Entrepreneurs improve the standard of living and economic well-being, which can increase GDP and per capita income.

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14
Q

How do entrepreneurs affect economic power distribution?

A

They spread the economic concentration of power from a few to more persons in society.

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15
Q

In what ways do entrepreneurs contribute to community development?

A

They contribute by providing job creation, assisting charitable events, and supporting infrastructural development.

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16
Q

What is an example of regional development by entrepreneurs?

A

An example is trading with CARICOM nations or setting up businesses in other regional countries.

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17
Q

How do entrepreneurs foster innovation?

A

They foster a culture of innovation and creativity that reduces dependence on social services.

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18
Q

What is the tax contribution of entrepreneurs?

A

Entrepreneurs contribute to taxation in the economy.

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19
Q

What is one reason for starting a business?

A

Achieving growth as an individual or self-actualisation.

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20
Q

What does self-employment provide?

A

The opportunity to achieve one’s dream through one’s effort.

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21
Q

What is a benefit of starting a business related to creativity?

A

Creative satisfaction.

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22
Q

What freedom does starting a business offer?

A

Freedom to develop the business according to one’s desires and enjoy flexibility.

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23
Q

What financial benefit can come from starting a business?

A

Financial independence.

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24
Q

What is the first step in establishing a business?

A

Conceptualize or develop the business idea.

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25
What is the second step in establishing a business?
Engage in market feasibility of the concept.
26
What is the third step in establishing a business?
Identify input resources.
27
What is the fourth step in establishing a business?
Create a blueprint.
28
What is the fifth step in establishing a business?
Acquire funding for the venture.
29
What is the sixth step in establishing a business?
Develop the framework.
30
What is the objective of preparing a business plan?
To outline the reasons for preparing a business plan.
31
What is a key reason for developing a business plan?
It allows the entrepreneur to conduct research into the feasibility of the venture and assess opportunities.
32
How does a business plan communicate to the target audience?
It communicates the purpose of the venture and what it wants to achieve in the future.
33
What does a business plan provide for the entrepreneur beyond the startup phase?
It provides guided steps and ways to deal with uncertainties in the external environment.
34
How does a business plan serve potential investors?
It provides a guide regarding the attractiveness of the business, including projected financial statements.
35
What role does a business plan play for financial lending agencies?
It is used as a tool for assessing the level of risk in the business.
36
What is a business plan?
A detailed, written description of the proposed business outlining its vision, mission, goals, and key functional areas.
37
How does Coulter (2003) describe a business plan?
As a blueprint and road map for operating the ongoing business.
38
What elements does a business plan contain?
It contains vision, mission, goals, business structure, management levels, resource allocation, and legal aspects.
39
What does the production plan in a business plan include?
Capacity planning.
40
What does the marketing plan in a business plan cover?
Market research, nature of the product, industry trends, and marketing mix.
41
What is Market Research?
An investigation into the market with the objective of finding out the size of the market, market share of a company's brand or products, and that of competitors.
42
What is Marketing Research?
The collection and analysis of data from the market to deal with issues or policies in marketing, e.g., finding out what customers want. Marketing research is a part of market research.
43
What are the aims of Market Research?
To find out what customers want, assess changes in taste patterns, gauge customer behaviour, evaluate demand, and identify market opportunities.
44
What is the first step in the Basic Market Research Process?
Identify the problem or research objectives.
45
What follows after identifying the problem in the Basic Market Research Process?
Develop the research plan based on the problem and objectives.
46
What is done after developing the research plan?
Collect information using interviews.
47
What is the next step after collecting information?
Analysis of information using statistical techniques, e.g., averages.
48
What is the final step in the Basic Market Research Process?
Present relevant findings and use findings for decision making.
49
What is market research?
Market research is the process of gathering, analysing and interpreting information about a market, a product or service to be offered for sale, and about the past, present and potential customers.
50
What are the two main categories of data sources in market research?
The two main categories of data sources are Primary Research Sources and Secondary Research Sources.
51
What are Primary Research Sources?
Primary Research Sources are new research and first-hand sources collected through site visits, questionnaires, focus groups, surveys, and face-to-face interviews.
52
What online methods can be used for Primary Research?
Online methods for Primary Research can include online questionnaires and video conferencing focus groups.
53
What are Secondary Research Sources?
Secondary Research Sources use information that has already been published by other sources.
54
What are examples of Internal Secondary Sources?
Internal Secondary Sources include reports, sales records, and financial records.
55
What are examples of External Secondary Sources?
External Secondary Sources include industry surveys, published companies' financial records, journals, trade magazines, books, trade associations' publications, banks, and mass media.
56
What is the significance of conducting a feasibility study?
Conducting a feasibility study is significant for establishing a business.
57
What is a feasibility study?
A feasibility study is an investigation or research to determine if a business idea has a probability of success.
58
What does a feasibility study assess?
It assesses the viability of the idea against costs and projected revenue.
59
What is opportunity cost in the context of a feasibility study?
The feasibility study incorporates an evaluation of the opportunity cost of entering a particular business.
60
What can a feasibility study reveal?
It can reveal any problem issues or strengths and weaknesses to be addressed before writing the business plan.
61
What potential does a feasibility study seek to address?
It seeks to address the potential of the venture to generate profits.
62
What does a feasibility study identify regarding the market?
It identifies whether there is a target market for the good or service.
63
What is a Technical Feasibility Study?
It assesses the company's technology requirements and the procedures needed to undertake a venture.
64
What is a Marketing Feasibility Study?
It assesses the likelihood of demand for the product, determines the target market, and evaluates the product's potential to create a market presence.
65
What is Economic Feasibility?
It is an assessment of the company's ability to complete the venture given the present financial resource base, essentially a cost/benefit analysis.
66
What is the relationship between planning and the operation of a business?
The planning process helps the entrepreneur map out plans to achieve business goals.
67
What are the different time frames in planning for a business?
The time frames include short-term planning, medium-term planning, and long-term planning.
68
What is short-term planning?
Short-term planning usually covers a year and focuses on current processes and improvements, such as enhancing skills through training and servicing machinery.
69
What is medium-term planning?
Medium-term planning typically spans 2-3 years and addresses short-term issues that were not effectively resolved, aiming to revise and strengthen policies.
70
What is long-term planning?
Long-term planning looks 4 to 5 years into the future, considering the organization's vision and effectiveness in achieving it, while assessing strengths, weaknesses, opportunities, and threats.
71
What does long-term planning involve?
It involves developing strategies to achieve long-term goals and assessing the political, economic, social, and technological environments.
72
73
What are some rules and regulations governing business conduct?
Registration of business, adherence to employment legislation, making necessary statutory deductions, paying taxes, and receiving necessary planning permits.
74
What employment legislation must businesses adhere to?
Occupational safety and health (OSH) requirements; Equal Opportunities legislation; Equality and diversity legislation; Pay legislation; Maternity and paternity.
75
What are necessary statutory deductions businesses must make?
National insurance.
76
What planning permits might a business need?
Environmental clearance to build.
77
What are CSME and CARICOM?
CSME (Caribbean Single Market Economy) and CARICOM (Caribbean Community).
78
What international issues should organizations observe?
Trading blocs such as the European Union, International Law.
79
What opportunities are facing organizations due to globalization?
New markets, new technologies, demographic changes, improvements in infrastructure, greater access to international markets, and government policies to facilitate trade.
80
What challenges are facing organizations?
Political stability, economic issues, social factors, meeting environmental regulations, inability to keep up with technological change, and legal regulations.
81
What economic issues can challenge organizations?
Inflation and unemployment.
82
What social factors can challenge organizations?
Crime and changing demographics.
83
What is one objective related to business location?
Outline the factors that determine the location of a business.
84
What should the value of the item used as collateral be compared to?
The value of the item used as collateral should be comparable to the value of the loan.
85
What is equity in the context of collateral?
Equity is the value of the item or asset after deducting outstanding debts/liabilities.
86
What are some types of collateral?
Types of collateral include land, buildings, equipment, securities or shares, vehicles, and money.
87
What is a secured loan?
A loan that is backed by collateral is referred to as a 'secured loan'.
88
How does the interest rate of a secured loan compare to an unsecured loan?
A secured loan usually attracts a lower interest rate than an unsecured loan.
89
What options might an entrepreneur seek if they do not have collateral?
Other options may include equity financing, where the venture is financed by investors who put capital into the venture for equity share or becoming part owner.
90
What is one role of the entrepreneur?
Operating or transforming the inputs of the business to output.
91
What does the entrepreneur evaluate in business performance?
Setting benchmarks and analysing gaps in actual performance from projected performance.
92
How does an entrepreneur engage with change management?
As the business meets challenges in the internal and external environment.
93
What is a characteristic of a typical entrepreneur?
Creativity in developing new, innovative ideas to sustain the business in declining markets.
94
What trait allows an entrepreneur to adapt their leadership style?
Flexibility in terms of decision making and leadership style.
95
What is the goal-oriented behavior of an entrepreneur?
Setting targets and monitoring achievement towards goals.
96
What quality demonstrates persistence in entrepreneurs?
Persistent in working towards achieving set targets.
97
What risk-taking behavior do entrepreneurs exhibit?
Possess a propensity to take risk such as entering a new market or making investment decisions.
98
What is the role of the entrepreneur in the decision-making process?
To make informed decisions that affect the direction and success of the business.

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