Section 3

Question 1

What is an entrepreneur?

Answer 1

An individual who combines all the other factors of production (land, labour and capital) with the aim of establishing a profitable venture for the production of goods and services.

Question 2

What is the role of the entrepreneur in conceptualizing?

Answer 2

Coming up with an idea which they enjoy and could be profitable. The aim is to provide something which is limited or lacking.

Question 3

What does planning involve for an entrepreneur?

Answer 3

The overall formulation of objectives and policies of the business.

Question 4

What is involved in accessing funds?

Answer 4

Acquiring information from banks, credit unions, venture capitalists, etc. on loan terms, years, and repayment terms. There may also be funds from family, friends, and one’s own savings.

Question 5

What does organizing entail for an entrepreneur?

Answer 5

Bringing together all the aspects of the production process and ensuring that everything is in place at the right time so that operations can run smoothly.

Question 6

What is the operating role of an entrepreneur?

Answer 6

Actually running the business on a daily basis.

Question 7

What does evaluating the performance of the business involve?

Answer 7

The monitoring of the operations and comparing it to the projections/budgets formulated. If the actual performance is below the budget, then corrective action may be taken after the problem has been investigated.

Question 8

What risks does an entrepreneur bear?

Answer 8

The entrepreneur bears all the risk of being involved in the new enterprise but is also entitled to the profits of the business.

Question 9

What are the personal traits of an entrepreneur?

Answer 9

1. Creative
2. Innovative
3. Flexible
4. Goal oriented
5. Persistent
6. Persevering
7. Able to calculate risks
8. Self-motivated

Question 10

What are the reasons to start a business?

Answer 10

1. Financial independence
2. Wanting to be your own boss
3. Self-fulfillment
4. Self-actualization

Question 11

What is the first step for establishing a business?

Answer 11

Conceptualization: This is the formulation of the idea of what to produce.

Question 12

What is the second step for establishing a business?

Answer 12

Research: This is a probe of the market to determine if the business is needed and if there are sufficient people/organizations to make operations viable. Information can be gathered through questionnaires, interviews etc. Data is then analyzed and a decision is made.

Question 13

What is the third step for establishing a business?

Answer 13

Identification of resources:
- Financial resources (including savings, money from family, friends, banks, credit unions etc.)
- Human resources (individuals to operate the business)
- Material (what will be used to produce goods or services)

Question 14

What is the fourth step for establishing a business?

Answer 14

Creation of Business plan: This plan shows how the business will be organized, giving information on projected sales, production costs, projected profits.

Question 15

What is the acquisition of funds?

Answer 15

Getting money from relevant sources to purchase equipment, materials, and pay staff.

Question 16

What occurs after the acquisition of necessary factors of production?

Answer 16

The business can commence operation.

Question 17

What is the purpose of research in establishing a business?

Answer 17

To remain competitive and be in touch with consumers’ needs.

Question 18

What is primary research?

Answer 18

Gathering information from direct sources such as customers themselves.

Methods include sampling, questionnaires, interviews, observation, and surveys.

Question 19

What is secondary research?

Answer 19

Information gathering from what has already been compiled and documented by others.

Sources include books, website information, newspapers, and consumer review magazines.

Question 20

Why is research needed in business?

Answer 20

To be aware of consumer tastes, improve existing products, create new products/services, and understand market competition.

Question 21

What is a feasibility study?

Answer 21

A feasibility study is an analysis of the viability of an idea, determining if it makes financial sense to start a business.

Question 22

When is a feasibility study conducted?

Answer 22

A feasibility study is conducted before the business plan.

Question 23

What questions does a feasibility study answer?

Answer 23

1. Will people buy my product? 2. What competition exists and how do I compete with them? 3. What costs can I expect to have to meet? 4. How much finance am I going to need and for how long?

Question 24

What are personal sources of finance?

Answer 24

Personal sources of finance include: Life Insurance Policies, Vehicles, Buildings, Equipment, and Funds from family members and friends.

Question 25

What are external sources of finance?

Answer 25

External sources of finance include: Bank Loan, Bank Overdraft, and Share Capital.

Question 26

What is a bank loan?

Answer 26

A bank loan is a principal amount that has to be repaid with interest.

Question 27

What is a bank overdraft?

Answer 27

A bank overdraft is when your current account at the bank is 'topped up' with money which you have to repay with interest.

Question 28

What is share capital?

Answer 28

Share capital refers to part ownership of the business given to others, such as partners or shareholders in the case of a limited company.

Question 29

Planning Ahead

Question 30

Planning And Operation of The Business:

Question 31

The planning of the business is the first stage. It includes carrying out research. Part of the planning also

Question 32

includes acquiring the necessary funds to put the plan into effect. The operational stage is the last stage.

Question 33

What remains between the first and last stage can be divided into short-term plans

Answer 33

medium-term plans

Question 34

and long-term plans.

Question 35

Short-term Plans - are those that are undertaken on a daily or weekly basis and include factors such as

Question 36

what to purchase

Answer 36

for example

Question 37

business

Answer 37

the plans may be carried out by the owner whilst in a larger business

Question 38

a lower management employee(supervisor).

Question 39

Medium-term Plans - are those effected for one or two years and include implementing procedures that

Question 40

increase the effectiveness of the business

Answer 40

for example

Question 41

production aspects (or departments). For example

Answer 41

implementing a training programme for staff or

Question 42

identifying machinery and equipment that needs improving.

Question 43

Long-term Plans - are those that establish the course of the business over a three-to-five-year period.

Question 44

These decisions can only be taken by the owners) or directors

Answer 44

but often in consultation with others. The

Question 45

plans set out ways that the business intends to develop from its existing position to where it aims to be in

Question 46

the long term. For example

Answer 46

the acquisition of other similar businesses.

Question 47

Government Regulatory Practices

Question 48

The regulatory practices governing the establishment of a business refer to the legislative rules by which

Question 49

people who wish to establish a business should be guided. There are also regulations that must be

Question 50

followed even in establishing a small start-up business. The entrepreneur must apply to the minister of

Question 51

small businesses who is charged with checking and approving their application.

Question 52

Certain businesses must be registered with the Registrar of Companies. A Certificate of Registration

Question 53

is issued

Answer 53

which must be appropriately displayed in the place of business

Question 54

valued added (VAT) or consumption tax registered.

Question 55

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