POB SECTION 3

Entrepreneur VS Entrepreneurship

ENTREPRENEUR is someone with vision and creativity who identifies successful business opportunities and takes risks to start a business for profit.

WHILE

ENTREPRENEURSHIP is the process of identifying successful business opportunities and taking risks to start a business, bringing resources together to make a profit.

3 Functions of an entrepreneur

• Conceptualizing- forming a new business idea

• Accessing funds- Acquire funds to start and run the business this can be done through loans

• organizing- keeping records, proper documentation, hiring of staff, and acquiring resource

• operation- ensure daily activities are being carried out

• EBP- determine how well the business is doing

• Planning- setting goals to be achieved, create a business plan

3 Characteristics of an entrepreneur

• Goal oriented

• risk taker

• innovative

• Creative

• flexible

• persistent

roles of the entrepreneur in the decision-making process

• conceptualizing

• planning

• accessing financing

• organising factors of production

• operating the business

• evaluating and risk bearing

3 roles of the entrepreneur in economic development

• Collaborating

• Creating jobs

• Providing goods and services to satisfy citizens

• Contributing to nation building

• Earning foreign exchange

4 Reasons why someone would start a business

• Self-fulfilment

• Financial independence

• Self-actualisation: the achievement of one’s full potential through creativity and independence.

• Increased income

• Increased control

STEPS TO START A BUSINESS

1. Conceptualization

2. research

3. identification of resources

4. create a business plan

5. accessing funds

6. operation

Business Plan & Its importance

A formal written document setting out the objectives of a business, as well as key details about the intended future running, written for owners and other stakeholders.

IMPORTANCE - it serves as a guide THROUGH EACH STAGE OF STARTING AND MANAGING YOUR BUSINESS

Financial forecast

a projection of the expected financial position of a business in the future, and the results of operations and cash flows based on expected conditions.

ELEMENTS OF A BUSINESS PLAN

Executive Summary - a short part of a longer document that summarises the key content of the main document.

Operational Plan- this sets out the day-to-day tasks that are required to run a business.

Business Opportunity- a description of the product or service

Market analysis- description of the market research that has been carried out and what it has revealed.

Financial Forecast- sources of finance, cash flow, profit and loss forecasts

Expansion - an indication of future plans.

3 Reasons for preparing a business plan

• To research the business idea

• To attract potential investors

• To source financing

• To guide decision-making

Feasibility Study

Research to determine if a business project will succeed, identifying strengths, weaknesses, costs, and viability of a business proposal.

Feasibility

Capability of being done

Viability & A viability study

VIABILITY

currently succeeding (making a profit) and likely to continue to be a success.

A VIABILITY STUDY

needs to identify how great each of the costs will be, and when these costs will be due for payment.

significance of conducting a feasibility study

• To ascertain viability - The feasibility study should enable entrepreneurs to ascertain whether they should go ahead with launching a business, or in producing a product or service.

• To identify the possible costs

• To identify possible sources of finance

3 FACTORS THAT DETERMINE THE LOCATION OF A BUSINESS

• Geographical factors (natural features, population, existing industries)

• Infrastructure

• Power and Water

• Telecommunications

• Labour Supply

• Government regulation

• Transport Links

• availability of raw materials and supplies

• Health facilities-

Collateral

an asset that a borrower provides as security to get a loan from a lender.

3 TYPES OF COLLATERAL

• Property

• Stocks

• Bonds

• Money

• Life insurance

• Appliances

• Motor Vehicles

Primary Research

Collection of original data directly from the source, like surveys, interviews, photographs, and artifacts.

Secondary Research

Use of existing data collected by others for a different purpose, such as books, articles, documentaries, and biographies.

Government Regulations

Rules set by different levels of government to govern business operations, including local, regional, and global regulations.

List 3 regulatory practices instituted by governments

Monetary Policies

• The deliberate alteration by the government of the quantity of money in the economy, and the price (interest rate) of borrowing or lending money.

Fiscal Policy

• The fiscal policy is a collective term used for the taxing and spending actions done by the government to influence aggregate demand in the economy

Consumer Protection Agencies

• These agencies stop unfair and fraudulent business practices by collecting complaints and doing investigations

Environmental Policies

• National governments establish environment agencies that are responsible for creating rules relating to the environment, and then monitoring how effectively these rules are being applied.

Intergovernmental Agreements

• Any agreement that is made between two or more governments in cooperation to solve problems of mutual concern.