Chapter 2 – Entrepreneurship (Grade 10)

Question-and-answer flashcards covering key concepts from Grade 10 Business Studies, Chapter 2: Entrepreneurship.

What are the four main paths to entrepreneurship?

Starting a new business; buying an already established business; purchasing a franchise; joining or continuing a family business.

Why is starting a new business often more complicated than buying an existing one?

The entrepreneur must select a form of ownership, complete all formation procedures, and meet every legal requirement from scratch.

If an entrepreneur does not register a company, what major legal risk does he/she face?

Unlimited liability for the debts and obligations of the business.

Give two reasons why starting a new business can be more costly than buying an existing one.

(1) All assets and equipment have to be purchased. (2) Full set-up expenses such as premises, registration, and initial marketing must be covered.

List four advantages of buying an already established business.

Lower legal start-up costs, proven location, existing customer loyalty, and established supplier/distributor networks.

When buying an existing business, why must the entrepreneur study the industry or market it operates in?

To ensure the market is profitable and sustainable and that the venture aligns with the entrepreneur’s skills and goals.

Which South African legislation created opportunities for emerging entrepreneurs through preferential government tenders?

The Preferential Procurement Act.

What is an informal entrepreneur?

An entrepreneur operating in the informal sector, usually without fixed premises and outside formal tax and regulatory frameworks.

Mention two positive economic roles played by informal entrepreneurs.

They create jobs and contribute to skills development (also spur local economic growth).

What is the main aim of Private-Public-Partnership initiatives for youth entrepreneurs?

To encourage and support youth entrepreneurship through training, resources, and ongoing mentorship.

Define a franchise.

A business arrangement where an entrepreneur buys the right to use a franchisor’s name, logo, systems, and proven business model.

State three benefits an entrepreneur gains when buying a franchise.

Established brand recognition, proven operating recipe, and an existing customer base.

Why do many family businesses have a high success rate?

Founders usually grow up in the business, understand its processes, and know the customer base intimately.

Name and briefly describe the four stages in the traditional entrepreneurial process.

1) Identifying & evaluating the opportunity; 2) Assessing resources required; 3) Developing the business plan; 4) Managing the venture.

Differentiate between feasibility and viability studies.

Feasibility asks if the idea can be practically implemented; viability asks if it can generate sustainable profits and returns.

In a SWOT analysis, what are strengths and why are they important?

Internal positive factors that help exploit opportunities, counter threats, and create competitive advantage.

According to Timmons’ model, why is the composition of the entrepreneurial team critical?

The right mix of skills and people can turn a good opportunity into a great one and manage uncertainty effectively.

What is the main objective of the team as highlighted by the Timmons model?

To minimise inputs and maximise outputs, thereby lowering costs while delivering superior value to customers.

Give three types of resources an entrepreneur must assess when starting a venture.

Financial capital, raw materials & equipment, and skilled labour.

Why is a business plan essential when seeking funding from a financial institution?

It demonstrates planning and shows lenders the venture’s likelihood of success and ability to repay loans.

List any five common sections of a business plan.

Title page, executive summary, market analysis, marketing plan, financial plan, production plan, organisational plan, appendix (any five).

Which management functions (POLC) must the entrepreneur perform or delegate?

Planning, organising, leading, and controlling.

What is the primary long-term objective of an entrepreneur?

To earn and grow profits.

What is meant by a competitive advantage?

A set of differentiating factors that enables a business to outperform rivals in the marketplace.

Identify the three bases on which a business can build competitive advantage, as shown in the notes diagram.

Time, price, and product differentiation.