Chapter 2: Entrepreneurship

These flashcards cover the origins, characteristics, motivations, venture types, processes and growth stages of entrepreneurship as presented in Chapter 2 of Grade 10 Business Studies.

What is the literal meaning of the French roots "entre" and "prendre" that form the word entrepreneur?

"To enter" and "to take"

According to Jean-Baptiste Say, what does an entrepreneur do with under-utilised resources?

Reorganises them to become productive and earn profits.

State the primary aim of any entrepreneur.

To generate profit as a reward for the risks taken.

List the four key words that describe the entrepreneurial ‘formula’.

Opportunity, Resources, Risk, Reward/Profit

Differentiate between push and pull factors in entrepreneurship.

Push factors force people into entrepreneurship (e.g., unemployment), while pull factors attract them (e.g., independence, recognition, wealth).

Why is unemployment considered a major push factor in South Africa?

Population growth exceeds economic growth, leaving many without jobs who must create their own employment.

Give two examples of pull factors that motivate entrepreneurs.

Independence and self-actualisation (top of Maslow’s hierarchy).

Name any four core characteristics of successful entrepreneurs.

Opportunity seeking, creativity/innovation, risk tolerance, determination/perseverance

Why are creativity and innovation crucial for entrepreneurs?

They enable development of new or improved products/services that satisfy customer needs better and create competitive advantage.

What is meant by ‘high risk tolerance’ in entrepreneurship?

Willingness to accept personal and financial uncertainty after conducting research to ensure risks are calculated.

Explain self-reliance as a trait of entrepreneurs.

Being a self-starter who makes decisions independently yet taps into networks when needed.

Which basic management tasks support entrepreneurial flexibility?

Planning, leading, organising, and control

How does Maslow’s theory relate to entrepreneurial motivation?

Entrepreneurs strive for self-actualisation by achieving challenging personal and business goals.

List the three distinguishing features of an entrepreneurial venture compared with a survival business.

Innovation, growth potential, and sound objectives

Define a techno-entrepreneur.

An entrepreneur who develops technology or uses it to grow a business.

What is a social entrepreneur?

Someone who starts ventures to solve social problems, often operating as an NGO.

Identify the main goal of enviro-entrepreneurs.

Creating ventures that solve environmental problems and promote sustainability.

How do tourism entrepreneurs contribute to the economy?

By offering goods/services that attract tourists, such as hotels, tours, or souvenirs.

Who are ‘emerging entrepreneurs’ in South Africa?

Previously disadvantaged individuals benefiting from Preferential Procurement to win government tenders.

Describe an informal entrepreneur.

Operates in the informal sector without fixed premises or formal tax obligations, e.g., street hawkers.

What support do youth entrepreneurs typically receive through PPP initiatives?

Training, resources, and ongoing mentorship to start and grow ventures.

List the four main paths to entrepreneurship.

Starting a new business, buying an existing business, purchasing a franchise, and running a family business.

Why is starting a new business often riskier than buying an established one?

It requires setting up from scratch, larger capital outlay for assets, and no proven track record.

State one advantage of buying a franchise.

Access to an established brand, proven systems, and an existing customer base.

Explain the benefit of a family business for new entrepreneurs.

Knowledge of processes and customers is inherited, increasing the likelihood of success.

List the four sequential steps in the traditional entrepreneurial process.

Identify & evaluate opportunity, assess resources required, develop business plan, manage the venture.

Differentiate between feasibility and viability studies.

Feasibility tests if the idea is workable; viability tests if it can generate sustainable profit and ROI.

What purpose does a SWOT analysis serve for entrepreneurs?

It helps match internal strengths and weaknesses with external opportunities and threats.

According to Jeffry Timmons, why is the entrepreneurial team critical?

A great team enhances the opportunity, manages resources efficiently, and copes with uncertainty.

Identify five factors that can create competitive advantage for a new venture.

Time, price, customer convenience, product differentiation, customer experience

Name the five stages of business growth in order.

Incubation, Start-up, Breakthrough, Maturity, Decline/Rejuvenation

What is the primary focus during the incubation stage?

Preparing to establish the business by finalising research on feasibility and viability.

Which common problem may a business face during the start-up stage?

Failing to reach break-even quickly enough, leading to cash-flow pressure.

During the breakthrough stage, which production issue often arises?

Maintaining adequate factors of production (labour, materials, machinery) to meet increasing demand.

Why is the maturity stage attractive for entrepreneurs?

The venture enjoys steady market share, loyal customers, and returns on initial investment.

What strategic choice must an entrepreneur make during decline?

Decide whether to rejuvenate the business through innovation or to exit/close it.

Give one tactic to rejuvenate a declining business.

Expanding the product range, entering new markets, or relocating to a better area.

What is meant by ‘customer loyalty’ in entrepreneurial growth?

A dedicated customer base that repeatedly purchases and supports the business.

How does an entrepreneur minimise risk before starting a venture?

Conduct thorough research, calculate risks, and develop contingency plans.

Explain ‘unlimited liability’ and when it poses a risk.

Personal assets of the owner are at risk for business debts, common in unregistered sole proprietorships.

Why is location research vital when launching a venture?

Proximity to target market, parking, security, and complementary businesses influence customer access and sales.

In research, why must the sample be representative of the target market?

So findings accurately reflect customer needs/preferences and guide reliable decisions.

What role do suppliers and distributors play when buying an existing business?

Established networks reduce start-up time and help maintain product availability and customer service.

How can opportunity seeking lead to expansion of existing businesses?

By adding new products/services or entering new geographical markets to satisfy unmet customer needs.